news story - Jailed ID thieves thwart cops with crypto

[dan at geer.org]

http://news.com.com/Jailed+ID+thieves+thwart+cops+with+crypto/2100-7348_3-6144521.html


Jailed ID thieves thwart cops with crypto
By Tom Espiner
Story last modified Tue Dec 19 06:46:45 PST 2006 

  Three men have been jailed in the U.K. for their part in a massive
  data theft operation.

  One of the accused ringleaders of the gang, Anton Dolgov--also
  known as Gelonkin--was sentenced to six years at London's Harrow
  Crown Court on Wednesday for his part in the theft of millions
  of dollars from victims in countries including the U.K. and the
  U.S.

  The ID thieves used stolen credit card numbers and created false
  identities to buy high-end electronics and other goods, which
  they then resold on eBay, prosecutors said.

  The gang pleaded guilty to conspiracy to defraud, obtain services
  by deception, acquire, use and possess criminal property, and
  conceal, disguise, convert, transfer or remove criminal property.

  One of the gang members, Aleksei Kostap, was also found guilty
  of perverting the course of justice, and was sentenced to four
  years' imprisonment.

  When the gang's premises were raided by the members of the Serious
  and Organised Crime Agency (SOCA), Kostap was handcuffed with his
  hands in front of his body. He managed to leap up and flick an
  electrical switch that wiped databases that could have contained
  records of the gang's activities stretching back more than 10
  years, SOCA said.

  Kostap's action also triggered intricate layers of encryption on
  the gang's computer systems, which SOCA's experts were unable to
  crack, the court heard.

  SOCA was not prepared to discuss what encryption was used or why
  it was unable to decrypt it, as such information would enable
  other criminals to use the same methods.

  According to the Crown Prosecution Service (CPS), which confirmed
  that Kostap had activated the encryption after being arrested,
  it would take 400 computers 12 years to crack the code.

  Because much data was inaccessible to the police, it is not known
  how much the criminals profited from their operation, but it is
  believed that they made millions of dollars. Police were able to
  find evidence of 750,000 pounds ($1.46 million) worth of transactions
  between 2003 and 2006, but the gang had been operating since the
  mid-'90s.

  "The true scale of the gang's crimes will probably never be known,"
  said a representative for the CPS.

  Identify theft is a growing problem worldwide. Figures released
  by Sainsbury's Bank last week found that more than 4 million
  British citizens have suffered financial losses through ID fraud.
  And last year, in the U.S, identity theft for the third straight
  year topped the list of fraud complaints reported to the Federal
  Trade Commission. Consumers filed more than 255,000 identity theft
  reports to the FTC in 2005, accounting for more than a third of
  all complaints the agency received.

  Police became aware of the gang after a reported break-in at the
  gang's base of operations. When they raided the premises they
  found the gang hard at work at their computers and arrested them.

  "They were very busy when they were arrested," the CPS said.

  The gang used fake identities, and falsified and forged passports
  to open bank and PayPal accounts, and sent the goods they purchased
  to residential addresses for later sale. They had already requested
  the mail be redirected from the addresses. Goods including
  Manchester United strips and cameras, which have a high resale
  value, were then auctioned on eBay.

  The CPS told ZDNet UK, CNET News.com's sister site, that the gang
  also had data containing registries of births and deaths, local
  tax documents and electoral registration applications, and that
  they had 120 different checkbooks in their possession.

  "Fraud was their bread and butter," the CPS representative said.

  There is an outstanding arrest warrant for another member of the
  gang, believed to be a ringleader. Known as Mr. Kaljusaar, police
  have evidence of his involvement but as yet have no idea who or
  where he actually is, the CPS said.

  After the break-in at the gang's premises, the police became aware
  of an outstanding international arrest warrant for Gelonkin/Dolgov
  in the name of Anthony Peyton, which had been issued after the
  arrest of gang member Andreas Furhmann by Spanish authorities.

  Another gang member, Romanos Vasiliauskas, was jailed for 18
  months on Thursday.

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