24 Busted in International Card Fraud Sting

Arrests Result from Two-Year Undercover Operation
24 Busted in International Card Fraud Sting

In what is being called "the largest coordinated international law enforcement action in history directed at carding crimes," 24 suspects have been arrested in a fraud scheme likely involving more than 400,000 accounts.

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The news was announced June 26 by the U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation. Federal investigators say the arrests were the result of "Operation Card Shop," a two-year undercover program designed to locate, investigate and expose cybercriminals, as well as disrupt their card-fraud activities.

According to a statement issued by the U.S. Attorney's Office, the scheme revolved around the online sale of stolen credit card details, bank accounts and other personal information on hundreds of thousands of victims.

As a result of this investigation and subsequent arrests, the FBI has notified issuers of more than 411,000 compromised payment cards, and 47 different organizations have been notified of network breaches. The FBI estimates the operation has prevented economic losses of more than $205 million.

"As the cyberthreat grows more international, the response must be increasingly global and forceful," says Manhattan U.S. Attorney Preet Bharara. "The allegations unsealed today chronicle a breathtaking spectrum of cyberschemes and scams. As described in the charging documents, individuals sold credit cards by the thousands and took the private information of untold numbers of people. As alleged, the defendants casually offered every stripe of malware and virus to fellow fraudsters, even including software-enabling cyber voyeurs to hijack an unsuspecting consumer's personal computer camera. To expose and prosecute individuals like the alleged cybercriminals charged today will continue to require exactly the kind of coordinated response and international cooperation that made today's arrests possible."

In their announcement, officials called Operation Card Shop "the largest coordinated international law enforcement action in history directed at 'carding' crimes."

Operation Card Shop

To identify and arrest these suspects, the FBI created its own undercover carding forum called "Carder Profit." Over the course of two years, starting in 2010, this forum allowed users to discuss offers to buy, sell and exchange goods and services related to carding crimes.

The 24 defendants are charged with various online carding offenses in which, according to criminal complaints, "they sought to profit through, among other means, the sale of hacked victim account information, personal identification information, hacking tools, drop services, and other services that could facilitate carding activity."

In addition to the arrests, international law enforcement agencies also conducted more than 30 interviews and executed more than 30 search warrants.

In the U.S., 11 suspects were arrested and charged with crimes ranging from aggravated identity theft to conspiracy to commit wire fraud. Suspects include: Christian Cangeopol, Lawrenceville, Ga.; Mark Caparelli, San Diego, Calif.; Sean Harper, Albuquerque, N.M.; Alex Hatala, Jacksonville, Fla.; Joshua Hicks, Bronx, N.Y.; Michael Hogue, Tucson, Ariz.; Mir Islam, Manhattan, N.Y.; Peter Ketchum, Pittsfield, Mass.; and Steven Hansen of Wisconsin. Two minors also were arrested by local authorities in Long Beach and Sacramento, Calif.

Hicks and Islam on June 26 were expected to appear before a magistrate judge in the Southern District of New York. The other defendants will be presented before magistrate judges in corresponding federal districts of arrest, according to the U.S. Attorney's statement.

Overseas, 11 suspects, whose names were not provided, were arrested as a result of investigations in foreign jurisdictions. Those arrests were made, in part, based on information provided by the FBI. Arrests occurred in the U.K., Bosnia, Bulgaria, Norway and Germany. Authorities in Australia, Canada, Denmark and Macedonia also conducted interviews and executed search warrants to assist with the takedown.

Two additional foreign arrests also were made based on provisional arrest warrants. Ali Hassan was arrested in Italy, and Lee Jason Juesheng was arrested in Japan.

"Spanning four continents, the two-year undercover FBI investigation is the latest example of our commitment to rooting out rampant criminal behavior on the Internet," said FBI Assistant Director in Charge Janice K. Fedarcyk, announcing the arrests. "Today's arrests cause significant disruption to the underground economy and are a stark reminder that masked IP addresses and private forums are no sanctuary for criminals and are not beyond the reach of the FBI."


About the Author

Tracy Kitten

Tracy Kitten

Executive Editor, BankInfoSecurity & CUInfoSecurity

A veteran journalist with more than 18 years' experience, Kitten has covered the financial sector for the last 11 years. Before joining Information Security Media Group in 2010, where she now serves as the Executive Editor of BankInfoSecurity and CUInfoSecurity, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by CNN.com, ABC News, Bankrate.com and MSN Money.




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