New Delhi: Three Indian computer hacker suspects, including two from Chennai, have been charged by the United States in connection with a stocks scam that artificially boosted equity prices by using hacked websites. One of the accused currently lives in Malaysia.
According to the US Department of Justice, the three face nearly two dozen charges of conspiracy, computer fraud, wire fraud, securities fraud and aggravated identity theft in what the US authorities described as a "hack, pump and dump" scheme designed to hijack online brokerage accounts for profit.
The suspects have been identified as Jaisankar Marimuthu (32) and Chockalingam Ramanathan (33) of Chennai and Thirugnanam Ramanathan (34), who was last reported in Malaysia.
Jaisankar and Thirugnanam have been detained in Hong Kong, but Chockalingam is still at large, US officials said.
It's the first time that some arrests have been made overseas for any online brokerage scam in the United States. The US is likely to seek the extradition of the arrested duo to face charges in Nebraska.
On Monday, the US Department of Justice announced a 23-count indictment against the two. Thirugnanam is a native of India, but a Malaysian resident at present.
Jaisankar was arrested on December 20, 2006, by the Hong Kong Police on charges of computer fraud, money laundering and possession of equipment to make a false instrument.
Thirugnanam was arrested by authorities in Hong Kong on January 26, 2007, in pursuant to a US provisional arrest warrant.
The conspiracy and computer fraud charges in this case each carry a maximum sentence of five years in prison.
Wire fraud and securities fraud carry maximum sentences of 20 and 15 years respectively. Each count of aggravated identity theft adds two years in prison.
PAGE_BREAK
As part of an investigation, at least 60 customers and nine brokerage firms in the United States and elsewhere have been identified as victims, with one of the brokerage firms reporting more than $2 million in losses, officials said.
On Monday, the US Securities and Exchange Commission (SEC) filed a civil complaint against all the three defendants in federal court in Nebraska.
"These new forms of high-tech identity and securities fraud pose serious risks to investors and brokerage firms across the globe," said Assistant Attorney General Fisher.
"The case demonstrates our commitment to aggressively investigate and prosecute these schemes wherever they originate," he said.
According to the indictment, between July and November 2006, the defendants, operating primarily from Thailand and India, used their personal online brokerage accounts to purchase shares of several thinly-traded stocks.
They then hacked into online brokerage accounts of others, using stolen usernames and passwords or established new brokerage accounts using stolen identities.
Using these accounts, the defendants made scores of unauthorised purchases of the same stocks to drive up the market price.
Once the share prices were artificially inflated, the defendants sold their own shares for a substantial profit.
"Although the basic concept behind the fraud alleged in the indictment is simple, the methods employed were sophisticated. The investigation, therefore, required a savvy understanding of high-tech transactions and an ability to communicate and cooperate internationally," said US attorney Stecher.
"Hackers who prey on American investors — no matter what continent they're operating from — are meeting their match with powerful adversaries in the Department of Justice and the Securities and Exchange Commission. We will go anywhere on earth to stop these thieves and hold them accountable," said SEC Chairman Christopher Cox.
(With agency inputs)
Comments
0 comment