December 18, 2006 10:34 AM PST
Jailed ID thieves thwart cops with crypto
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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.
Tom Espiner of ZDNet UK reported from London.