U.S. agents 'got lucky' pursuing accused Russia master hackers

SAN FRANCISCO Thu Jul 25, 2013 10:08pm EDT

U.S. Secret Service Special Agent James Mottola (L ) and New Jersey Attorney Paul J. Fishman speak to the media during a news conference in Newark, July 25, 2013. REUTERS/Eduardo Munoz

U.S. Secret Service Special Agent James Mottola (L ) and New Jersey Attorney Paul J. Fishman speak to the media during a news conference in Newark, July 25, 2013.

Credit: Reuters/Eduardo Munoz

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SAN FRANCISCO (Reuters) - The two Russians arrested in what prosecutors call the largest online fraud case brought in the United States were caught through a combination of high-tech tools, dogged detective work and sheer luck.

The propensity of the wealthy young Russians to travel provided authorities with their big opportunity to collar them in the Netherlands last year.

The alleged moneyman, Dmitriy Smilianets, 29, has been extradited to the United States to face the indictment, unsealed on Thursday in federal court in Newark, New Jersey, while one of the most-sought alleged hackers on the planet, Vladimir Drinkman, 32, is still fighting his move from the Netherlands.

Three other suspects remain at large, and prosecutors took the unusual step of naming them in what law enforcement sources said was a slap at uncooperative Russian authorities.

People working on the case said they believe Drinkman is one of the key conspirators in a credit card fraud case involving Miami's Albert Gonzalez. Gonzalez was arrested in 2008 and is now serving a 20-year sentence for crimes including stealing 130 million credit cards from Heartland Payments Systems.

Drinkman and one of the men still free in Russia, Alexandr Kalinin, 26, of St. Petersburg, were identified only as Hacker 1 and Hacker 2 in the main indictment of Gonzalez, when the U.S. Secret Service did not know their names.

Both were publicly identified for the first time on Thursday, and the indictment just unsealed said they were prodigious hackers, breaking into everything from banks and conglomerates to retailers.

Though it took years to get those two names, people familiar with the case said, Smilianets was easier to trace. That was in part because his alleged role was to sell the massive hoards of credit cards, which brought him into contact with more people, and in part because he kept a high profile in Russia and on networking sites.

ELECTRONIC GAMING TEAM

Smilianets was most widely known as the founder of a championship electronic gaming team called Moscow 5, which traveled the world for competitions. Online, his handles included Dima Brave and Dima Bold.

"He was well known in certain circles," Smilianets' attorney, Bruce Provda, told Reuters. Provda said he intended to fight the indictment "vigorously" and was looking into the circumstances of his extradition.

Agents got information that Smilianets was traveling to Europe last year and that he would travel with a friend on the trip. When the name of his companion emerged as Drinkman, who had been one of several suspected Gonzalez collaborators, the agents reinvestigated the name and concluded that he was one of the two hackers they had been chasing.

"Here's the world's biggest hacker," a person familiar with the case said. "We got lucky."

Drinkman posted pictures of his trip, dropped other clues and left his phone on, transmitting location information and allowing agents to make an educated guess about what hotel the men were staying in.

They called the hotel and were told those guests were sleeping. The next morning, as they prepared to board a tour bus, Dutch detectives confronted and arrested them.

Drinkman's attorney did not return emails seeking comment late Thursday. The Secret Service referred questions to prosecutors.

Announcing the name of Kalinin and other suspects in Russia is unusual and a sign that U.S. officials were dissatisfied with cooperation from law enforcement in that country.

Relations between the two countries on hacking cases have been poor for most of the past decade and a half, two law enforcement sources said. Neither was authorized to discuss the matter in public.

"If the Russians aren't going to cooperate with us, fine, we're going to let everyone know," one of them said.

In addition to signaling displeasure with officials in Moscow, the arrest of those traveling and the warning to those still at large send a message that major Russian criminals should not relax, and that could serve as a deterrent to others, he said.

(Reporting by Joseph Menn; Editing by Mohammad Zargham)

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Comments (5)
SKYDRIFTER wrote:
There may be an embedded blessing in disguise, in this picture.

With so much ‘commercial’ money having been stolen – with peripheral after-shocks – there may be a massive (and successful) cyber-security effort spawned; proportionate to the Manhattan Project.

(Hmmm; what became of the stolen money, anyway?)

Today, cyber-warfare is potentially more terrifying than military warfare. In the case of (massive) cyber-warfare, no civilian is safe. Shutting down electrical grids, communication systems and financial institutions (among other elements of the “national infrastructure”) could create sufficient public chaos, as to turn major population segments into ruthless dog-eat-dog warriors. Having a family residence emergency electrical generator or food supply would make a family residence a target for panicked mobs.

The bad news – to date – is that there is no “adequate” back-up plan or sufficient resources for a major cyber-attack. The “DHS Collective,” alone, wouldn’t be enough – and would more probably alienate the general public; contributing to any problems.

The most desperately needed commodities would be communication and “cool heads.” However potentially terrifying, a ‘normal’ mass glitch shouldn’t be allowed to generate a panicked frenzy. Last known, the “Emergency Broadcast System” isn’t particularly reliable in a true emergency. (Something about all those radio/TV station emergency generators not being checked or maintained.)

By any reasonable standard, the ‘government’ should reinvent the (volunteer) “Civil Defense” force, steeped in the history of the “Cold War.” Instead of “fallout shelters;” “resource centers” would be needed.

The bulk of the Cold War “CD” force was involved with community education; and preparation to ‘direct’ community elements (people)to whatever ‘safety’ was available (with an emphasis on schools).

Unfortunately, anyone familiar with pertinent history and current reality will advise that it would be necessary to NOT allow a certain ‘civilian’ outfit characterized by a red & white symbol to take charge. Let them stick to their current mission of collecting huge donations.

Among other benefits, such a “Civil Defense” move could reinvigorate a long-forgotten feature of the USA – “nationalism;” add “sense of community.”

In all probability, ‘civilians’ would supply a high percentage of the needed resources; such as CB & “Ham radio” equipment, just from existing ‘clubs.’ (Cell Phone service would be a prime target.) With adequate training, a “new” CD could act in the fashion of a “Neighborhood Watch;” just for a form of practical experience.

However, it would be critical to preclude any form of bureaucratic ‘tribalism’ from developing in such an organization. The collective effort would have to be exclusively “mission-oriented;” with no tolerance for opportunistic agendas – of any sort. Human nature being what it is, that might take a unique ‘iron fist’ to prevent any “power agendas” (and/or corruption) from springing up.

If any major “Cyber-Strike” took place – or was presumed – the last thing anyone would want would be a rash of “survivalists” leaping into action.

In the meantime, a far greater effort in the world of cyber-security is obviously very desperately needed – keeping in mind that the government-touted “terrorists” are highly sophisticated; spying on ordinary Americans is “Gestapo;” not “National Security.”

Possibly, a deal can be cut with these hackers. Who better to design a lock; than a burglar? Seriously; anybody remember “Operation Paperclip?” (Look it up on the ‘Net!) Some of the worst of the German Nazis saved the American bacon. (While Dr. Oppenheimer – “Father of the [American] Atomic Bomb” – was sacked as a God-hated “Communist!”) Funny, how life works.

Right now, it can be said that: “Results are always desperately needed; principles are always optional.”

However, should insanity prevail; Obama will trade the Russian hackers for Snowden. Ladies & gentlemen; place your bets!

Jul 26, 2013 1:46am EDT  --  Report as abuse
SKYDRIFTER wrote:
Speaking of “insanity;” if Obama, et al, are so bloody mad at Snowden, why did the ‘good-guys’ reveal how they caught this bunch? In all probability, they revealed factual information.

Not that the pertinent “data sources” aren’t publicly known and/or assumed; but the specific agencies, sleuthing and capture methodology should have been kept as some kind of ‘secret.’

Rather like publicly revealing Gen. Petraeus’ trick for exchanging messages with his ‘secret’ lady. A lot of ‘bad-people’ learned what NOT to do.

Alternately, the “Hackers of the World” just learned how to create effective diversions – and manufacture “reasonable doubt.”

And, how does that certain saying express the obvious? Something to the effect of: “Revenge is a delightful epicurean dish; which connoisseurs of vendetta serve cold.”

An interesting quirk of human nature was recently illustrated in a TV documentary, covering a huge – but little-known – drug cartel. The particular cartel was successful by avoiding identification through unusual non-spending habits. When the leader was finally captured, the DEA asked him why he didn’t spend some significant portion of the billions he made; what served as his ‘payoff? His answer was that his payoff was the incredible sense of “power.”

What now; these hackers? It must be assumed that such hackers are not just power-freaks; but that “power” is an extremely powerful addiction. All they need is minimal privacy, time, a keyboard and a fantasy.

How talented are those who escaped capture? Will they attempt to ‘spring’ their comrades – via cyber-extortion? What fantasies of Russian-American revenge do they entertain? Who, or what, will serve as their next targets?

The Obama bunch may as well have published the names & addresses of the entire SEAL team membership. Insane!

Jul 26, 2013 2:49am EDT  --  Report as abuse
xaxacatla wrote:
One man’s hacker is another man’s National Security Agency

Jul 27, 2013 8:55am EDT  --  Report as abuse
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