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| 4 Arrested in Schemes Said to Be Tied to JPMorgan Chase Breach | 4 Arrested in Schemes Said to Be Tied to JPMorgan Chase Breach |
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| Authorities have arrested four men in Florida and Israel in connection with a series of investment schemes related to an online attack last summer against JPMorgan Chase, according to people briefed on the matter and court filings. | Authorities have arrested four men in Florida and Israel in connection with a series of investment schemes related to an online attack last summer against JPMorgan Chase, according to people briefed on the matter and court filings. |
| The breach compromised contact information for tens of millions of bank customers. | The breach compromised contact information for tens of millions of bank customers. |
| A series of court filings unsealed on Tuesday did not mention the attack on JPMorgan’s network. Instead, they detailed charges involving a Bitcoin operation and a pump-and-dump stock scheme, a plan involving ransomware on computers and a small New Jersey credit union. | A series of court filings unsealed on Tuesday did not mention the attack on JPMorgan’s network. Instead, they detailed charges involving a Bitcoin operation and a pump-and-dump stock scheme, a plan involving ransomware on computers and a small New Jersey credit union. |
| But the people briefed on the matter said that the four men arrested and another who remains at large in Israel had some involvement in the security breach at JPMorgan Chase, one of the largest ever to hit a major United States bank. | But the people briefed on the matter said that the four men arrested and another who remains at large in Israel had some involvement in the security breach at JPMorgan Chase, one of the largest ever to hit a major United States bank. |
| Federal investigators were onto some of the names of the hackers at JPMorgan early on because the attack was not very sophisticated. It succeeded largely because the bank failed to properly put updates on a remote server that was part of its vast digital network. But investigators were unable to get sufficient evidence to charge any suspected hackers, said one of the people briefed on the matter. | Federal investigators were onto some of the names of the hackers at JPMorgan early on because the attack was not very sophisticated. It succeeded largely because the bank failed to properly put updates on a remote server that was part of its vast digital network. But investigators were unable to get sufficient evidence to charge any suspected hackers, said one of the people briefed on the matter. |
| The investigators then decided to see what other illegal activities the hackers were up to and that eventually led to the discovery of the pump-and-dump stock scheme. The investigation feared that the tens of millions of email addresses that were stolen from the bank would eventually be used to send out spam emails to potential buyers of penny stocks, helping the defendants further their pump-and-dump scheme. | |
| The person briefed on the matter said the hackers involved in a variety of different schemes, including one that involved putting so-called ransomware on computers and demanding payment in Bitcoin to unfreeze the files on a computer. | The person briefed on the matter said the hackers involved in a variety of different schemes, including one that involved putting so-called ransomware on computers and demanding payment in Bitcoin to unfreeze the files on a computer. |
| The three men charged in the stock scheme are Gery Shalon and Ziv Orenstein, both of Israel, and Joshua Samuel Aaron, an American citizen who lived in both Israel and the United States. Mr. Shalon and Mr. Orenstein were arrested in Israel by police there. Mr. Aaron remains at large. | The three men charged in the stock scheme are Gery Shalon and Ziv Orenstein, both of Israel, and Joshua Samuel Aaron, an American citizen who lived in both Israel and the United States. Mr. Shalon and Mr. Orenstein were arrested in Israel by police there. Mr. Aaron remains at large. |
| Preet Bharara, the United States attorney in Manhattan, said in a statement: “As alleged, the defendants manipulated trading in U.S. securities from overseas, using fake identities to funnel millions of dollars in unlawful proceeds through a web of international shell companies. Using false and misleading spam emails sent to millions of people, these defendants allegedly directed their pump-and-dump scheme from their computers halfway around the world.” | Preet Bharara, the United States attorney in Manhattan, said in a statement: “As alleged, the defendants manipulated trading in U.S. securities from overseas, using fake identities to funnel millions of dollars in unlawful proceeds through a web of international shell companies. Using false and misleading spam emails sent to millions of people, these defendants allegedly directed their pump-and-dump scheme from their computers halfway around the world.” |
| Two other men, Anthony Murgio and Yuri Lebedev, were arrested in Florida and charged in two separate complaints with unlicensed money transmitting. | Two other men, Anthony Murgio and Yuri Lebedev, were arrested in Florida and charged in two separate complaints with unlicensed money transmitting. |
| The attack on JPMorgan was initially believed to have been tied to Russian gangs, with possible ties to the Russian government. Federal authorities, however, quickly ruled out the Russian government as a suspect, as well as the possibility of direct ties to Russian gangs. The court filings on Tuesday, however, suggest some loose connection. | The attack on JPMorgan was initially believed to have been tied to Russian gangs, with possible ties to the Russian government. Federal authorities, however, quickly ruled out the Russian government as a suspect, as well as the possibility of direct ties to Russian gangs. The court filings on Tuesday, however, suggest some loose connection. |
| A JPMorgan spokeswoman declined to comment on the arrests. The bank has said the breach did not compromise customer financial information or sensitive personal financial information | A JPMorgan spokeswoman declined to comment on the arrests. The bank has said the breach did not compromise customer financial information or sensitive personal financial information |
| Federal authorities in New York had made the JPMorgan attack a priority investigation, and in the spring, some investigators were expressing confidence in private that they expected to announce some arrest by the summer if not earlier. | Federal authorities in New York had made the JPMorgan attack a priority investigation, and in the spring, some investigators were expressing confidence in private that they expected to announce some arrest by the summer if not earlier. |
| Much of the JPMorgan investigation for Mr. Bharara’s office was overseen by Nicole Friedlander, a chief of the online crimes division, who was working while out on maternity leave for several months, said people briefed on the matter. | Much of the JPMorgan investigation for Mr. Bharara’s office was overseen by Nicole Friedlander, a chief of the online crimes division, who was working while out on maternity leave for several months, said people briefed on the matter. |