3 Arrested in Hacking, Spam Spree

Thursday, December 17, 2015 @ 03:12 PM gHale


Three men from Florida, New Jersey, and Maryland are facing charges related to a wide-ranging computer hacking and identity theft scheme that compromised the personally identifiable information (PII) of millions of people and generated more than $2 million in illegal profits, officials said.

Timothy Edward Livingston, 30, of Boca Raton, Florida; Tomasz Chmielarz, 32, of Rutherford, New Jersey; and Devin James McArthur, 27, of Ellicott City, Maryland, ended up charged by indictment with conspiracy to commit fraud and related activity in connection with computers and conspiracy to commit wire fraud, said U.S. Attorney Paul J. Fishman. Livingston and Chmielarz also face charges of conspiracy to commit fraud and related activity in connection with electronic mail.

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Beginning as early as 2011, federal officials said Livingston and others operated A Whole Lot of Nothing LLC — a business that specialized in sending unsolicited, or “spam,” emails on behalf of its clients. Livingston’s clients included legitimate businesses, such as insurance companies that wished to send bulk emails to advertise their businesses, as well as illegal entities, such as online pharmacies that sold narcotics without prescriptions. Typically, Livingston charged $5 to $9 for each spam email that resulted in a completed transaction for a client.

Internet service providers used spam filters to prevent the unsolicited emails from reaching their customers’ accounts. Beginning in January 2012, officials said Livingston solicited Chmielarz to write computer programs to send spam in a manner that would conceal the true origin of the email and bypass spam filters. Livingston and Chmielarz started using proxy servers to send out spam messages using botnets to hide the true origin of the spam, help them remain anonymous, and to evade anti-spam filters and other spam blocking techniques. Livingston also registered certain websites used in the spam campaigns in the name of his alias, “Mark Lloyd,” to avoid detection.

Livingston and Chmielarz then hacked into the e-mail accounts of individuals and compromised and seized control of the mail servers of some of the corporate victims to further their spam campaigns, law enforcement officials said. They created custom software designed to hack into the email accounts of customers of a company identified in the indictment as “Corporate Victim 1.” Once the email account software gained access to a Corporate Victim 1 user’s account, it created sub-accounts on the account and used them to send out spam. Livingston and Chmielarz programmed the email account software to access the mail server of Corporate Victim 1 through proxy servers to obscure their true identities. This allowed them to send out massive amounts of spam without identifying themselves as the senders, and instead using Corporate Victim 1’s mail servers and customer accounts.

Livingston and Chmielarz also created custom software that leveraged vulnerabilities in the websites of a number of corporations, including one identified in the indictment as “Corporate Victim 2” (the web form software), which allowed Livingston and Chmielarz to use Corporate Victim 2’s email servers to send out spam that appeared to be from Corporate Victim 2, but in reality was from Livingston and his conspirators, officials said.

Breakdown on charges and maximum potential penality if found guilty.

Breakdown on charges and maximum potential penality if found guilty.

Livingston, Chmielarz and McArthur also worked together to steal the confidential business information of the corporate victims, including databases containing the PII of millions of Americans, so they could use that information in spam campaigns. In May of 2013, Livingston and Chmielarz discussed stealing confidential business information from “Corporate Victim 3,” as identified in the indictment. In an online chat, Livingston told Chmielarz, “here is the site I need scrapped (sic),” and provided Chmielarz with an address for Corporate Victim 3’s website and the login credentials for an employee. “Scraping” is a technique employed to extract large amount of data from websites.

In another online chat, Livingston told Chmielarz the database they were going to steal from Corporate Victim 3 contained 10 million records. Livingston subsequently paid Chmielarz to write a computer program to steal the database, officials said.

From February 2014 through February 2015, McArthur worked as a sales representative at a corporation identified in the indictment as “Corporate Victim 4.” In a series of online chats in August 2014, Livingston, Chmielarz, and McArthur discussed using McArthur’s position at Corporate Victim 4 to steal confidential business information, including the PII of millions of the company’s customers, officials said.

On Aug.11, 2014, law enforcement officials said McArthur provided Livingston with access to a remote administration tool on a computer with access to the computer network of Corporate Victim 4 without authorization from his employer. McArthur gave Livingston and Chmielarz access to Corporate Victim 4’s computer network using the remote administration tool to steal the names, addresses, phone numbers, and email addresses of potential customers, current customers, and former customers. The defendants and others could use that information to send spam to those individuals.

Livingston told defendant Chmielarz he estimated that Corporate Victim 4’s database had records for 50 million people; Livingston also discussed the technical challenges associated with stealing such a large volume of data from Corporate Victim 4.

In an online chat dated Sept. 3, 2014, Livingston and McArthur discussed the contents of the database they had stolen from Corporate Victim 4. McArthur estimated that they had succeeded in stealing 24.5 million records.

The maximum potential penalties for each count are as follows:
• Count 1, Livingston, Chmielarz, and McArthur: Conspiracy to commit fraud and related activity in connection with computers, five years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense
• Count 2, Livingston, Chmielarz, and McArthur: Conspiracy to commit wire fraud, 20 years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense
• Count 3, Livingston and Chmielarz: Conspiracy to commit fraud and related activity in connection with electronic mail, five years in prison and a fine in an amount the greater of $250,000 or twice the gain or loss from the offense

The indictment also notices the forfeiture of $299,653 from several bank accounts, a 2006 Ferrari F430 two-door Spider Convertible and a 2009 Cadillac Escalade SUV.