Vadym Iermolovych, Wire Fraud, New Jersey 2014

NEWARK, N.J. – Vadym Iermolovych, a 28-year-old Ukrainian hacker, pleaded guilty today to his role in an international scheme to hack into three business newswires, steal press releases containing non-public financial information, and use the information to make trades that allegedly generated approximately $30 million in illegal profits, U.S. Attorney Paul J. Fishman announced.

Iermolovych, of Kiev, Ukraine, pleaded guilty before U.S. District Judge Madeline Cox Arleo to a three-count information charging him with conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. He was arrested on Nov. 12, 2014 in connection with other charges related to computer hacking and credit card fraud.

The scheme, which lasted from February 2010 to August 2015, involved hackers based in Ukraine gaining unauthorized access into the computer networks of Marketwired L.P. (Marketwired), PR Newswire Association LLC (PRN), and Business Wire. They used a series of targeted cyber-attacks, including “phishing” attacks and SQL injection attacks, to gain access to the computer networks.

The hackers stole press releases about upcoming announcements by public companies concerning earnings, gross margins, revenues, and other confidential and material information. They shared the stolen releases with traders using overseas computer servers that they controlled. In a series of emails, the hackers even shared “instructions” on how to access and use the overseas server where they shared the stolen releases with the traders.

Iermolovych admitted that he was personally involved in the hacks into the Victim Newswires. He admitted to hacking into PRN’s network between January 2013 and March 2013. He also admitted that he obtained a set of user credentials of PRN employees stolen from a computer hack into a social networking website and then used at least one of those credentials to ultimately gain access into PRN’s computer network.

Five other members of the conspiracy – two computer hackers and three securities traders – were charged by federal indictment brought by the District of New Jersey (DNJ). The related 23-count DNJ indictment charged Ivan Turchynov, 28, Oleksandr Ieremenko, 24, and Pavel Dubovoy, 33, all of Ukraine, Arkadiy Dubovoy, 51, and Igor Dubovoy, 29, of Alpharetta, Georgia. Arkadiy Dubovoy and Igor Dubovoy both pleaded guilty to the wire fraud conspiracy charged in Count One of the DNJ indictment on Feb. 18, 2016 and Jan. 20, 2016, respectively.

The Eastern District of New York (EDNY), in a related indictment, charged four securities traders: Vitaly Korchevsky, 50, of Glen Mills, Pennsylvania, Vladislav Khalupsky, 45, of Brooklyn, New York and Odessa, Ukraine, Leonid Momotok, 48, of Suwanee, Georgia, and Alexander Garkusha, 48, of Cummings and Alpharetta, Georgia. Garkusha pleaded guilty to the wire fraud conspiracy charged in Count One of the EDNY indictment on Dec. 21, 2015.

Iermolovych’s guilty plea marks the first conviction of one of the hackers responsible for breaching the networks of Marketwired, PRN, and Business Wire, and stealing press releases containing confidential non-public financial information relating to hundreds of companies traded on the NASDAQ and NYSE.

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