A Ukrainian man who said he was part of plan to hack into business newswires to get advance news on company earnings reports, generating an estimated $30 million in illegal earnings, pleaded guilty Monday in federal court.
Vadym Iermolovych, 28, of Kiev, pleaded guilty to conspiracy to commit wire fraud, conspiracy to commit fraud using computers and aggravated identity theft before U.S. District Judge Madeline Cox Arleo.
Iermolovych admitted he was part of a ring of hackers and thieves who from 2010 through July 2015 cracked into PR Newswire, Business Wire and Marketwired to get advance notice of company earnings statements. Iermolovych personally sold that insider trading information for “tens of thousands” of dollars, prosecutors said.
He is the fourth person to admit guilt to being part of the scheme, which federal prosecutors said is the largest of its kind to be prosecuted.
Iermolovych hacked into the business wires’ computer systems and sent the information to traders who executed deals to buy or sell stocks based on the news it planned to release, according to a court document.
The hackers stole information from 150,000 news releases on hundreds of companies, including Caterpillar Inc., Hewlett Packard, Home Depot, Panera Bread and Verisign, Inc., it said.
Iermolovych broke into PR Newswire twice and installed malware on its computer servers, only to have the malicious code identified and removed, it said.
Hackers from all over the world have been targeting U.S. corporations, stealing millions of dollars through massive credit card fraud schemes that have come to light in a growing number of federal cases in New Jersey.
Iermolovych bought the stolen credentials of PRN employees and used their sign-in information as if he were an employee accessing the system from a remote site, it said.
Once the transactions were complete, the traders shared the illegal earnings with the hackers through foreign shell companies, it said.
Iermolovych, who authorities arrested in the United States in November 2014, faces up to 20 years in prison for the conspiracy to commit wire fraud charge, five years for the fraud using computers charge and two additional years in prison for the aggravated identity theft charge. He also may end up fined and ordered to make restitution when he undergoes sentencing Aug. 22.
Altogether, 10 people were charged in the hacking ring following an investigation by the U.S. Secret Service, court records said.
Besides Iermolovych, those charged are: Ivan Turchynov, 28, Oleksandr Ieremenko, 24, and Pavel Dubovoy, 33, all of Ukraine, Arkadiy Dubovoy, 51, and Igor Dubovoy, 29, of Alpharetta, GA, according to the office of U.S. Attorney Paul J. Fishman.
Arkadiy Dubovoy and Igor Dubovoy pleaded guilty to wire fraud conspiracy earlier this year.