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Russian national in unprecedented hacking, data-breach brought before federal judge in Newark

Photo Credit: Cliffview Pilot File Photo

BEYOND BERGEN: A Russian national who authorities said conspired in the the largest hacking and data-breach plot ever prosecuted in the U.S. was brought before a federal judge in Newark this afternoon after being extradited from the Netherlands.

Vladimir Drinkman, 34, pleaded not guilty to all of the charges.

Drinkman, of Syktyykar and Moscow, was one of five principals whom U.S. Attorney Paul J. Fishman said targeted NASDAQ, JetBlue and Dow Jones, among others, in the scheme.

“Financial institutions, credit card companies, and consumers suffered hundreds of millions in losses” following the theft of more than 160 million credit and debit card numbers, he said.

All five found weak spots on the different victims’ web sites and uploaded malware that allowed the hackers to help themselves to sensitive financial information that they sold worldwide, according to an indictment returned in U.S. District Court in Newark.

Other victims included 7-Eleven, Carrefour, JCP, Hannaford, Heartland, Wet Seal, Commidea, Dexia, Euronet, Visa Jordan, Global Payment, Diners Singapore and Ingenicard.

Drinkman was arrested in the Netherlands on June 28, 2012 and was detained by Dutch authorities for extradition.

He entered not guilty pleas to all 11 counts in the indictment.

U.S. District Judge Jerome B. Simandle scheduled a trial April 27.

The five defendants each served particular roles in the scheme, Fishman said:

“Drinkman and Alexandr Kalinin, 28, of St. Petersburg, Russia, each specialized in penetrating network security and gaining access to the corporate victims’ systems.

“Roman Kotov, 33, of Moscow, also a hacker, specialized in mining the networks Drinkman and Kalinin compromised to steal valuable data. The hackers hid their activities using anonymous web-hosting services provided by Mikhail Rytikov, 27, of Odessa, Ukraine.

“Dmitriy Smilianets, 31, of Moscow, sold the information stolen by the other conspirators and distributed the proceeds of the scheme to the participants.”

Drinkman and Kalinin were previously charged in New Jersey as “Hacker 1” and “Hacker 2” in a 2009 fedreal indictment of Albert Gonzalez, 33, of Miami, in connection with five corporate data breaches – including the breach of Heartland Payment Systems Inc., which at the time was the largest ever reported.

Gonzalez is serving 20 years in federal prison.

Kalinin is also charged in two federal indictments in the Southern District of New York: One charges him in connection with hacking certain computer servers used by NASDAQ and the second with conspiring with another Russian hacker, Nikolay Nasenkov, in an international scheme to steal bank account information from U.S.-based financial institutions.

Rytikov was previously charged in the Eastern District of Virginia with an unrelated scheme.

Drinkman and Smilianets were arrested at the request of the United States while traveling in the Netherlands on June 28, 2012. Smilianets was extradited Sept. 7, 2012, and remains in federal custody.

Kalinin, Kotov and Rytikov remained at large.

All of the defendants are Russian nationals except for Rytikov, who is a citizen of Ukraine, Fishman said.

“The incredibly sophisticated work with our partners at the U.S. Secret Service to uncover this enormous, far-reaching scheme demanded an equal effort by our colleagues at the Department of Justice Criminal Division in Washington and our law enforcement partners overseas to bring the defendant back to face these charges,” he said.

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