FBI arrests 24 in internet credit card fraud ring

Filed Under: Apple, Data loss, Law & order, Malware

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FBI NY Cybercrime unit logoThe US Federal Bureau of Investigation announced today the arrest of 24 individuals and charges against 4 more who remain at large resulting from a two year long investigation into credit card and ID theft conducted through internet forums.

Criminals who steal credit cards and trade them online are known as "carders" to those of us in the information security space. The FBI setup a carder message forum in 2010 in an attempt to get the inside track on who was involved, and from whom they had stolen the information.

Over the last 24 months they were able to obtain enough evidence to press charges against these 28 individuals including 13 from the USA, 6 from the UK, 2 from Bosnia, 1 from Bulgaria, 1 from Norway, 1 from Germany and 2 others from undisclosed locations.

The FBI estimates it has prevented more than $205 million in fraudulent transactions and alerted card issuers of over 411,000 compromised credit and debit cards. Through the intelligence gained during its investigation it also notified 47 companies, government organizations and educational institutions that they had been compromised.

Charges against a few of the defendants shed some light on the specialization practiced in this underground ecosystem.

Michael Hogue (21), a/k/a "xVisceral", allegedly specialized in creating remote access Trojans (RATs) that enable attackers to take full control of victim PCs, including accessing web cams and keystrokes. He sold his RATs for $50 a piece on average. Hogue from Tuscon, Arizona faces up to 20 years in prison for his crimes if convicted.

Ali Hassan (22), a/k/a "Badoo", sold what are referred to as "fulls", which references that he not only had credit card numbers, but also names, addresses, Social Security Numbers, birth dates, mother's maiden names, expiration dates and CVV codes. He bragged that he had obtained some of these details from a compromised online hotel booking site. Hassan faces 27 years in prison if convicted.

Apple Care Express Replacement ServiceMark Caparelli (20), a/k/a "Cubby", was a specialist in defrauding Apple product warranties. He obtained stolen credit cards and serial numbers from Apple products to defraud Apple by having them ship advance replacements for supposedly broken Apple products he didn't own. He would use the stolen cards to "secure" the advanced shipments which he sold and traded. Caparelli faces 30 years if convicted.

Joshua Hicks (19), a/k/a/ "OxideDix", sold credit card dumps to an FBI agent for $250 and a DSLR camera. Agents met Hicks in person in New York City to provide him the camera according to Hicks' indictment. Hicks faces up to 10 years in prison if convicted.

Mir Islam (18), a/k/a "JoshTheGod", is the most interesting of the arrests. In addition to being in possession of more than 50,000 stolen card details he was also a member of hacking group UGNazi and founder of a competitive card trading forum carders.org.

After arresting Islam, the FBI also shutdown the websites of both UGNazi and carders.org. UGNazi has been in the news recently claiming attacks against high-profile web businesses including Twitter. Islam faces 25 years in prison if convicted on all charges.

This isn't the first time the Feds have intervened and disrupted carder activities. They also shutdown another carder ring in September 2008 called Dark Market after a long-term undercover sting.

It is a good day when I can honestly say that crime doesn't pay. The FBI did a fantastic job, working with federal police from around the world to shut down these fraudsters. It's nice to see the FBI taking the initiative by creating a honey pot to snag these guys.

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10 Responses to FBI arrests 24 in internet credit card fraud ring

  1. NoName · 1198 days ago

    USA create stuxnet and probably flame trojan, and they are charging Michael Hogue for Distribution of Malware ?

    So if i understand, USA feds can go accross laws but not normal people; this is totally unfare.

    Also blackshades is a RAT, not a malware (depending how you use it)

    So FBI should bust authors of :

    Backtrack, Cain & Abel, Brutus, Wireshark, Metasploit (purely a widely malware database ready for use) and all related well know security products.

    and Conspiracy to commit computer hacking (10 years in prison) , are they sure ?

    • JohnJ · 1197 days ago

      Yes The FBI needs to have the ability to do so. Sounds like you are someone with the "ability" to do so as well. So am I and let me say its better to not bitch about it. You knew the law when you signed up for this type of life.. If you get caught you pay the price.. Simple as that. He Knew what he was doing..

    • GoMay · 1182 days ago

      there technically isn't a right or wrong in your statement the difference is one is authorized to do such activities while others are not. That's the difference between the hackers activities and the FBI, and citing the tools used makes no sense they're tools how you use them is a totally different thing. It's like saying sue a saw company because a serial k*ller used it to part up someone.

      • AlteredR · 987 days ago

        What is sad about America is you could sue the saw company and win.

  2. JUAN · 1198 days ago


    • freestyle · 1196 days ago

      Lol @ Juan, why would you expect Nigerians to be among the list?

    • GoMay · 1182 days ago

      Hey I just inherited some serious dough from some Nigerians about to sign over my bank statement credentials for the wire now. REspect me i'm a prince

  3. lewis · 1175 days ago

    My previous employer had purchased the remote administration tool called blackshades for legit purposes, he had it installed on all the computers within our company so he could monitor what all the employees was doing.

    Thats a legit reason, i have recently contacted him about this and he has now removed all the software fearing the interpol is going to close his company down and he will go jail.

    This isnt right as someone mentioned before the owner of a company that sells saw's has been put in prison because someone has killed someone with a saw he sold them.

    The blackshades website has strict T&C before purchasing and using.

    I hope Michael Hogue is not charge with this unless there is evidence of him speaking about or showing people how to use the tool un-lawfully. I understand that he has also been involved in credit card fraud aswell as this which i totally agree sned him to jail and through away the key.

    But i do not think it is fair that he should be charged for creating the remote administration tool.

    Just my thought and i do not want to offend anyone. I would like to see what other people think about this. cheers lewis

  4. Bola Olanrewaju · 1065 days ago

    This is to alert my friends, associates and the general public that some unscrupulous internet fraudsters hacked into my mail using my email address to send fraudulent messages to my contacts soliciting for money.

    The scammers were peddling stories that I am stranded in Wales and that I had lost my International Passport and so needed money to be sent to me.

    This is completely untrue as I have never solicited for money from any body, and besides, I am presently in Nigeria and can be reached true my mobile phone number for proper clarification.

    I therefore advise the general public to disregard such mails as they are not from me. Meanwhile, I have taken some measures to safeguard my mails in addition to having reported the matter to the appropriate authorities in my locality.

    I appreciate the efforts of the global authorities in their quest to rid the world of internet fraudsters. I am in total support of those efforts

    Bola Olanrewaju

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About the author

Chester Wisniewski is a Senior Security Advisor at Sophos Canada. He provides advice and insight into the latest threats for security and IT professionals with the goal of providing clear guidance on complex topics. You can follow Chester on Twitter as @chetwisniewski, on App.net as Chester, Chester Wisniewski on Google Plus or send him an email at chesterw@sophos.com.