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10/8/2009
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'Operation Phish Phry' Nets 100 Suspects In Major Bank-Fraud Ring

Bust represents largest number of defendants ever charged in a U.S. cybercrime case, FBI says

The FBI yesterday announced indictments of 100 suspects spanning the U.S. and Turkey who allegedly operated a phishing scheme that stole personal information and money from U.S. bank accounts of thousands of victims.

U.S. authorities in California, Nevada, and North Carolina so far have arrested 33 of 53 defendants named in an indictment by a federal grand jury in Los Angeles. Egyptian authorities have charged 47 people in the scheme in the first-ever joint cybercrime investigation between Egyptian and U.S. authorities. FBI officials say the charges in the U.S. represent the largest cybercrime investigation to date.

"The sophistication with which Phish Phry defendants operated represents an evolving and troubling paradigm in the way identity theft is now committed," said Keith Bolcar, acting assistant director in charge of the FBI in Los Angeles. "Criminally savvy groups recruit here and abroad to pool tactics and skills necessary to commit organized theft facilitated by the computer, including hacking, fraud, and identity theft, with a common greed and shared willingness to victimize Americans."

The indictment says the Egyptian-based attackers phished bank account numbers and related personal information from an unknown number of bank customers and then hacked into accounts at two banks -- the names of which were not disclosed publicly.

The Egyptian defendants allegedly then worked with their co-conspirators in the U.S., who transferred the funds from victims' accounts to fraudulent accounts set up for the ring. U.S. defendants Kenneth Joseph Lucas, Nichole Michelle Merzi, and Jonathan Preston Clark, all of California, ordered associates to recruit "runners" to set up the accounts. Some of the stolen money was transferred via wire services to their Egyptian counterparts.

The indictment accuses all of the alleged phishing ring members with conspiracy to commit wire fraud and bank fraud, which could carry a sentence of 20 years in federal prison. Some were also charged with bank fraud; aggravated identity theft; conspiracy to commit computer fraud, specifically unauthorized access to protected computers in connection with fraudulent bank transfers; and domestic and international money laundering.

Have a comment on this story? Please click "Discuss" below. If you'd like to contact Dark Reading's editors directly, send us a message. Kelly Jackson Higgins is Senior Editor at DarkReading.com. She is an award-winning veteran technology and business journalist with more than two decades of experience in reporting and editing for various publications, including Network Computing, Secure Enterprise Magazine, ... View Full Bio

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