Massive cybercrime case unfolding in Las Vegas

The Carder.su organization was about as big as any criminal syndicate could get until an undercover Las Vegas federal agent put a crimp in its worldwide operations.

Federal prosecutors say millions of Americans and numerous financial institutions were victimized by the Russian-led cybercrime syndicate and its more than 7,800 members.

Tens of millions of dollars in financial fraud losses each year were attributed to the group of sophisticated criminals, who found Las Vegas an ideal place to operate.

Carder.su hosted exclusive websites from Russia, where its international members could come together in an online marketplace to buy and sell stolen identity information and phony credit cards and driver’s licenses and learn how to carry out an array of high-tech fraud schemes, prosecutors have alleged.

In early 2012, the Nevada U.S. attorney’s office obtained four separate indictments charging 55 members and associates, including the group’s Russian leaders, in a sweeping racketeering and identity theft conspiracy.

Some of the defendants were charged with using fake credit cards to unlawfully obtain tens of thousands of dollars from casinos in Las Vegas and Connecticut.

Two of the defendants — Alexander Kostyukov, 29, of Miami, and David Camez, 22, of Phoenix — are to stand trial before U.S. District Judge Andrew Gordon on Monday in what is considered the first time federal prosecutors have used racketeering statutes to go after a cybercrime syndicate. The Justice Department’s Organized Crime and Gang Section in Washington was brought in to help prosecute the case.

The indictments were the result of a 4½-year investigation, code-named “Operation Open Market,” which took off after Michael Adams, a U.S. Secret Service agent based in Las Vegas, went undercover and infiltrated the secretive organization.

Adams, now an agent with U.S. Homeland Security Investigations, assumed the online nickname, “Celtic,” of a man arrested here in a credit card fraud scheme in 2007, and with the man’s cooperation ended up becoming a trusted member of Carder.su. The agent in his undercover capacity was a “vendor” within the group who sold phony driver’s licenses.

“The investigation identified large scale trafficking of compromised credit card account data and counterfeit instruments (counterfeit identifications and counterfeit cards), as well as money laundering, narcotics trafficking and various types of computer crime,” prosecutors said in a trial memorandum last week.

Among those charged in the case were the group’s alleged leaders, Roman Zolotarev and Konstantin Lopatin, who were identified in the indictment by their online nicknames, “Admin”and “Graf,” respectively. A third leader, identified by his nickname Maxxtro, also was among those indicted.

Many of the defendants, including the three leaders, are still at large. Several defendants were charged as John Does because authorities were unable to identify them through the maze of online transactions monitored during the undercover investigation. Everyone within the cybercrime syndicate used nicknames to hide their real identities from law enforcement authorities. Face-to-face business dealings were rare.

Eight defendants have pleaded guilty, and others are awaiting trial in February.

According to prosecutors, Carder.su members routinely engaged in criminal activity through the group’s “well-defined ” hierarchy.

The name of the group was taken from the term “carder,” which is used within the criminal world to describe someone who deals in unlawfully obtained financial information over the Internet to commit acts of fraud.

At the top of Carder.su’s organizational chart was Zolotarev, who prosecutors allege was the group’s founder and “administrator.” Zolotarev served as the head of the governing council, managing the organization’s daily operations, directing which schemes to carry out and determining who could join the group.

Under him were the “moderators,” Lopatin and Maxxtro, who helped oversee Carder.su’s websites and mediate disputes between members that arose on the various forums, prosecutors alleged

Next in the chain of command were “reviewers,” who evaluated and kept track of the “contraband,” the stolen bank account and credit card information, that vendors were selling on the websites. A favorable evaluation from a reviewer was necessary before a vendor could offer any illicit products.

Someone seeking Carder.su membership had to go through an elaborate security process designed to protect the organization from law enforcement or rival crime syndicate infiltration. That included having at least two members in good standing vouch for the prospective member.

Members didn’t just buy and sell illicit information and products. They taught each other how to engage in new criminal activities and avoid attracting the attention of authorities, prosecutors alleged.

The extent of the criminal activity was far-reaching.

In court papers filed earlier this year, Assistant U.S. Attorney Kimberly Frayn said one defendant advertised on Carder.su’s websites that he had 1 million stolen credit card numbers for sale.

Federal agents determined that the defendant made more than $1 million from the sale of nearly 55,000 stolen credit numbers during a 10-day period in April 2012, Frayn wrote.

An analysis of another defendant’s underground credit card dealings in April 2011 found that three financial institutions — Chase, Discover and American Express — lost more than $2 million from the syndicate’s use of 12,745 stolen credit card numbers, Frayn said.

Overall, Frayn explained, conservative estimates show financial institutions may have lost more than $20 million.

Both Kostyukov and Camez are in federal custody.

Prosecutors describe Kostyukov, who went by the online nickname “Temp,” as a vendor who set up phony bank accounts to help Carder.su members launder money they earned from using stolen credit information. Adams sold him phony driver’s licenses from Nevada and other states a half-dozen times in 2009, prosecutors alleged.

When agents raided Kostyukov’s Miami residence in March 2012, he is alleged to have thrown his laptop computer off the balcony of the high-rise apartment.

Camez, known online as “Bad Man” or “Doctorsex,” bought a fake Nevada driver’s license from Adams in 2009, according to prosecutors.

The trial of the two men is expected to last about a month.

Defense lawyers Todd Leventhal and Chris Rasmussen said they believe they have good defenses.

“The guys the government should be trying are the leaders in Russia, and not guys like my client who have zero ties to these websites other than going on them,” said Leventhal, who represents Kostyukov.

Added Rasmussen, who is defending Camez: “The problem for prosecutors is the people who got 99 percent of the money from this organization live outside the United States.”

Contact reporter Jeff German at jgerman@reviewjournal.com or 702-380-8135. Follow him on Twitter @JGermanRJ.

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