Belarus Man Jailed for $71M Scareware Scam

A 37-year-old Belarus citizen, Alexander Mihailovski, was sentenced to four years in federal prison in Seattle for his role in a $71 million scareware cybercrime scheme, U.S. Attorney Annette L. Hayes announced today. Mihailovski, who operated under the alias of payment processor PSBILL, Smart Systems, and Failsafe Payments through his company Mystique Enterprises, LTD, pleaded guilty in August 2016 after being extradited from Austria where he was arrested in late 2015.

The case centers on Operation Trident Tribunal, a sweeping federal crackdown on international cybercriminals who deployed malicious ‘scareware’ to extort money from over 960,000 computer users. The fraudulent software flooded victims’ screens with fake virus alerts, disabled real antivirus programs, and locked down systems until users paid up to $129 for useless ‘security’ software. The scam pulled in $71 million in total losses, making it one of the most lucrative cyber extortion operations ever prosecuted in the U.S.

At sentencing, U.S. District Judge Thomas S. Zilly didn’t mince words: ‘You provided an important part of the total scheme… by making it appear legitimate…. People who commit these crimes will be apprehended and will be punished.’ Mihailovski’s company processed credit card payments for the fake software sales, acting as the financial engine that turned digital deception into cold, hard cash.

‘Just like a bank robber needs a get-away driver, cyber fraudsters need people to turn their electronic scams into cash,’ said U.S. Attorney Hayes. ‘This defendant ran a credit card processing company that was essentially ripping off nearly $71 million dollars from unsuspecting computer users.’ Authorities stressed that Mihailovski thought he was beyond reach—until global cooperation brought him to justice.

He is the second key figure sentenced in the scheme. In December 2012, Swedish national Mikael Patrick Sallnert, 40, also received a four-year sentence and was ordered to forfeit $650,000 for serving as a payment processor. Both men enabled the cyber ring to launder revenue through seemingly legitimate payment channels, giving the operation a veneer of credibility that helped it thrive for years.

The FBI Seattle Division Cyber Task Force led the investigation, with critical support from the Security Service of Ukraine, German Federal Criminal Police, Netherlands National High-Tech Crime Unit, London Metropolitan Police, Latvian State Police, Lithuanian Criminal Police Bureau, Swedish National Police Cyber Unit, French Police Judiciare, Royal Canadian Mounted Police, Romania’s Directorate for Combating Organized Crime, Cyprus National Police, Danish National Police, and the Austrian Federal Ministry of the Interior. The case was prosecuted by Assistant U.S. Attorneys Norman Barbosa and Francis Franze-Nakamura, with assistance from the DOJ’s Office of International Affairs and Computer Crime and Intellectual Property Section.