Former Snitch Busted in Largest Identity Theft Case in U.S. History

Just another reason of why snitch testimony should require corroboration and is inherently unreliable in my view. The AP reports on a huge identity theft indictment returned today in New Jersey:

Federal prosecutors on Monday charged a Miami man with the largest case of credit and debit card data theft ever in the United States, accusing the one-time government informant of swiping 130 million accounts on top of 40 million he stole previously.

[Albert] Gonzalez is a former informant for the U.S. Secret Service who helped the agency hunt hackers, authorities say. The agency later found out that he had also been working with criminals and feeding them information on ongoing investigations, even warning off at least one individual, according to authorities.


Gonzalez, who is already in jail awaiting trial in a hacking case, was indicted Monday in New Jersey and charged with conspiring with two other unnamed suspects to steal the private information. Prosecutors say the goal was to sell the stolen data to others.

Gonzales goes by the online name "soupnazi."

The Justice Department said the new case represents the largest alleged credit and debit card data breach ever charged in the United States, based on a scheme that began in October 2006.

Gonzalez allegedly devised a sophisticated attack to penetrate the computer networks, steal the card data, and send that data to computer servers in California, Illinois, Latvia, the Netherlands and Ukraine.

Today's indictment is here. I'll bet it has some relationshop to the case of individuals from the Former Soviet Union busted in Denver last week I wrote about here, where the FBI raided a medical marijuana dispensary located in the same building as businesses for which it had search warrants in the bank fraud/credit card scamming case. The New Jersey indictment says:

It was further part of the conspiracy that those who purchased batches of the Stolen Data would further distribute the Stolen Data throughout the United States and elsewhere, where it would be used to make unauthorized purchases at retail locations, to make unauthorized withdrawals from banks and financial institutions, and to further identity theft schemes.

The Colorado case involves alleged credit card fraud of $80 million through use of 700 straw buyers.

This is all related to a scam under investigation since October, 2007 by people from the Former Soviet Union who came here on visas. The complaint alleges a criminal enterprise is behind their actions. It alleges they formed phony businesses, got credit cards and loans and didn't pay them back. It was a "bust out scheme."

Back to Gonzalez, how did he allegedly pull it off?

According to the indictment, Gonazalez and his two Russian coconspirators would hack into corporate computer networks and secretly place "malware," or malicious software, that would allow them backdoor access to the networks later to steal data.

As to his other cases: The DOJ press release today says:

Gonzalez is currently in federal custody. In May 2008, the U.S. Attorney’s Office for the Eastern District of New York charged Gonzalez for his alleged role in the hacking of a computer network run by a national restaurant chain. Trial on those charges is scheduled to begin in Long Island, N.Y., in September 2009.

In August of 2008, the Justice Department announced an additional series of indictments against Gonzalez and others for a number of retail hacks affecting eight major retailers and involving the theft of data related to 40 million credit cards. Those charges were filed in the District of Massachusetts. Gonzalez is scheduled for trial on those charges in 2010.

The charges announced today relate to a different pattern of hacking activity that targeted different corporate victims and involved different co-conspirators.

Here's his 2008 indictment in Mass.

I wonder how many people went to jail because of his testimony as an informant.

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  • Display: Sort:
    well, color me stunned, (none / 0) (#1)
    by cpinva on Mon Aug 17, 2009 at 08:03:18 PM EST
    that a criminal informant would be found to also be engaging in (big gasp here!)...........criminal activity!

    whoda thunk it?

    Imagine the scope of fraud and theft.... (none / 0) (#2)
    by kdog on Tue Aug 18, 2009 at 09:07:05 AM EST
    if we ever went cashless as a society...talk about cold sweats.

    Thats another reason I love cash and carry living...you wanna rob me you gotta take something tangible out of my possesion...and not just pluck some numbers out of cyberspace.

    The scope of fraud and theft now is mind-boggling...especially in Russia and Eastern Europe. My bro-in-law works in this racket processing transactions, and his company pulled out of the Eastern European market alltogether because of it.

    In Russia... (none / 0) (#3)
    by MileHi Hawkeye on Tue Aug 18, 2009 at 09:30:47 AM EST
    ...numbers pluck you!  

    The Russian mob is not to be underestimated by any means.  Yet we seem to worry more about identity theft from people from South of the border.


    They don't (none / 0) (#4)
    by kdog on Tue Aug 18, 2009 at 09:49:20 AM EST
    play around, to be sure...and they're out to get obscenely rich off the fraud, the south of the border cat often just wants a job...let him/her get a job using their own identity and they won't seek a false one.

    Our best and brightest turn to crime (none / 0) (#5)
    by DebtGazette on Tue Aug 18, 2009 at 12:12:00 PM EST
    Hopefully Mr. Gonzalez's actions can have a beneficial effect. Companies can learn to better protect our sensitive information, and consumers can learn just how vigilant they need to be in regards to their finances. It might be a lot to ask, but I think some good can come from this.

    Of course its hard when it oftentimes seem like our best and brightest minds would rather go into the criminal side of the computing world, than the legitimate one.

    Check out my blog on Mr. Gonzalez and his actions at.... http://www.thedebtgazette.com/2009/08/miami-hacker-creditcards/

    Third (and most likely) Option (none / 0) (#6)
    by pluege on Mon Oct 05, 2009 at 04:22:45 PM EST
    to take up some version of the idea

    the public option in name only option - that's the one obamadmin's been pushing: no actual public option, just a pretend public option sold as a real public option.

    wrong thread? (none / 0) (#7)
    by Jeralyn on Mon Oct 05, 2009 at 05:13:11 PM EST