A Russian national has been sentenced to 30 months in federal prison for conspiring with others to hack into a retail brokerage accounts and execute fake trades.
Last year, Petr Murmylyuk, 33, of Brooklyn, N.Y., pleaded guilty before U.S. District Judge Esther Salas to an indictment charging him with conspiracy to commit securities fraud. He was first charged in the case in 2012. According to documents filed in the case and statements made in court, Murmylyuk participated in a conspiracy to steal from online trading accounts at Scottrade, E*Trade, Fidelity, Schwab and other brokerage firm.
The scheme began in 2010. After members of the conspiracy gained unauthorized access to the online accounts of brokerage firm customers, the group then used stolen identities to open additional accounts at other brokerage houses. Next, the conspirators carried out a series of “unprofitable and illogical” securities trades then led to losses in the victims’ accounts and gains in the other accounts they opened. One version of the fraud for example involved causing the victims’ accounts to sell options contracts to the other set of accounts, then purchase the same contracts back minutes later for several times the price.
The members of the conspiracy recruited foreign nationals visiting, studying, and living in the United States to open bank accounts into which illegal proceeds could be deposited, according to authorities. The conspirators then transferred the proceeds of the sham trades to accounts where the stolen money could be withdrawn.
The scheme caused combined losses to Scottrade, E*Trade, Fidelity, Schwab and other affected brokerage firms of approximately $1 million.
In addition to the prison term, Judge Salas sentenced Murmylyuk Jan. 31 to serve three years of supervised release and ordered him to pay $505,357.79 in restitution.