Russian hacked brokerage accounts, causing $1 million losses

Petr Murmylyuk, 31, who lived in New York, is charged with conspiracy to commit wire fraud, unauthorised access to computers and securities fraud, according to the US District Attorney's Office in New Jersey. If convicted, Murmylyuk could face up to five years in prison and a $250,000 fine.

Share

A Russian national has been charged in the US with allegedly hacking into brokerage accounts and executing fraudulent trades, which several brokerage houses claim caused $1 million in losses.

Petr Murmylyuk, 31, who lived in New York, is charged with conspiracy to commit wire fraud, unauthorised access to computers and securities fraud, according to the US District Attorney's Office in New Jersey. If convicted, Murmylyuk could face up to five years in prison and a $250,000 (£156,000) fine.

Authorities allege Murmylyuk participated in a criminal ring that gained unauthorised access to brokerage accounts and then changed phone numbers and addresses on file to prevent victims from noticing trades. The US Securities and Exchange Commission is also filing a parallel civil action against Murmylyuk, according to a news release.

The victims' accounts were then used to make illogical trades that allegedly profited the gang. Authorities said in one version of the fraud, the hacked accounts were used to sell options contracts to "profit" accounts controlled by the accused, then purchase those options contracts back minutes later for up to nine times the price.

In another version, the profit accounts were used to offer a short sale of securities at prices over market price, then have the victim accounts buy the securities.

Murmylyuk is accused with a conspirator of recruiting foreign nationals to open bank accounts to receive the illegal proceeds, prosecutors said. As a result of the fraud, Fidelity, Scottrade, E*Trade, and Schwab said they lost $1 million (£622,000).

At the time he was charged, Murmylyuk was already in custody facing charges stemming from an investigation by the Manhattan District Attorney's Office.

 

"Recommended For You"

World's biggest identity theft case heads to court Indian on hacking charges extradited to US