In a press conference Wednesday, July 23, Manhattan District Attorney Cyrus Vance announced that seven members of an international cybercrime ring have been arrested for their involvement in ticket selling fraud on StubHub (NASDAQ:EBAY). These men laundered more than 1.6 milion dollars after hacking into 1,600 customer accounts.
Two Americans, pleading not guilty, were arraigned in New York City Wednesday, with bail set at 2 million and 500,000 dollars. Six arrests were made on Tuesday across three countries, the UK, Canada, and United States, and a seventh had been made earlier this month in Spain, highlighting the international scope of these crimes. Others allegedly involved include an American who is expected to turn himself in this week, and two beyond reach in Russia.
This fraud case began in March 2013 when StubHub was alerted to “a small number of accounts that had been illegally taken over by fraudsters” (philly link)and reported it to the Manhattan district attorney’s office and the U.S. Secret Service, reports the Associated Press. The resulting investigation revealed that the criminal hacking operation dated back to 2012, and that they had been gaining access to customer accounts and purchasing tickets, what is known as “account take-over fraud.” Stubhub has notified and refunded all customers affected by these crimes.
This is a basic flow of how the operation worked: Russian hackers fraudulently purchased tickets, then emailed them to American sellers who resold the tickets on websites such as StubHub, eBay, TicketsNow, Craigslist, and occasionally in person at concerts, and then laundered the money into accounts in the UK, Canada, and Germany.
“Fighting cybercrime requires international cooperation,” said Vance. So far, this case has been accomplishing that. The two U.S. arraignments made so far are the start of a long international process of bringing down this cyber-theft ring.