Feds Make Arrest in CU Bitcoin Fraud Case

Joshua Samuel Aaron, one of five co-conspirators who hacked into the highly secure servers of the nation’s largest financial institutions and controlled a small credit union to conceal an illegal Bitcoin operation that was generating $30 million a month in ACH payments, was arrested Wednesday at JFK International Airport.

Preet Bharara, U.S. Attorney for New York’s Southern District in Manhattan, said Aaron is expected to appear before a U.S. District Court Judge Thursday morning.

Aaron, 32, an American citizen, had been living in Moscow, Russia. Authorities there took him into custody and flew him back to the U.S.

“Joshua Samuel Aaron allegedly worked to hack into the networks of dozens of American companies, ultimately leading to the largest theft of personal information from U.S. financial institutions ever,” Bharara said.

In addition to Aaron, Yuri Lebedev, Anthony R. Murgio, Gery Shalon, Joshua Samuel and Ziv Orenstein allegedly operated a sprawling criminal enterprise that raked in hundreds of millions of dollars.

Shalon and Orenstein were arrested by Israeli authorities in July 2015 and were extradited from Israel in June 2016.

From 2012 to mid-2015, the leader of the criminal enterprise, Gery Shalon, allegedly orchestrated massive computer hacking crimes against seven U.S. financial institutions, including JPMorgan Chase Bank, national investment brokers Scott Trade and E*Trade, and the Dow Jones & Co. The other financial institutions were not identified in court documents.

Federal prosecutors said personal information belonging to more than 100 million customers of these financial institutions was stolen. Of that total, JP Morgan Chase accounts for 76 million households and seven million small businesses that were compromised.

Shalon, Aaron and Orenstein allegedly used personal IDs they had stolen to send out emails to unsuspecting investors to promote and pump up the price of publicly traded penny stocks that the three men and others owned. Once the price of the penny stock increased over the course of days or weeks, Shalon, Aaron and Orenstein dumped their shares, often resulting in millions of dollars in profits while exposing investors to significant losses.

The three were indicted on multiple felony counts of wire, computer, identity fraud and money laundering. Murgio was also charged with several felony counts of money laundering, bribery, wire fraud and conspiracy. In addition, Murgio’s father, Michael J. Murgio of Florida, was charged with bribery and wire fraud charges in connection to the credit union. Lebedev was charged with felony counts of bribery and making bribes to influence a financial institution officer.


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