Major International Hacker Pleads Guilty For Massive Attack on U.S. Retail and Banking Networks

/PRNewswire/ -- Albert Gonzalez, 28, of Miami, pleaded guilty today (December 29) to conspiring to hack into computer networks supporting major American retail and financial organizations, and to steal data relating to tens of millions of credit and debit cards, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, U.S. Attorney for the District of New Jersey Paul J. Fishman, U.S. Attorney for the District of Massachusetts Carmen Milagros Ortiz and Director of the U.S. Secret Service Mark Sullivan.

Gonzalez, aka "segvec," "soupnazi" and "j4guar17," pleaded guilty to two counts of conspiracy to gain unauthorized access to the payment card networks operated by, among others, Heartland Payment Systems, a New Jersey-based card processor; 7-Eleven, a Texas-based nationwide convenience store chain; and Hannaford Brothers Co. Inc., a Maine-based supermarket chain. The plea was entered in federal court in Boston before U.S. District Court Judge Douglas P. Woodlock. The case is one of the largest data breaches ever investigated and prosecuted in the United States.

According to information contained in the plea agreement, Gonzalez leased or otherwise controlled several servers, or "hacking platforms," and gave access to these servers to other hackers, knowing that they would use them to store malicious software, or "malware," and launch attacks against corporate victims. Malware used against several of the corporate victims was also found on a server controlled by Gonzalez. Gonzalez tested malware by running multiple anti-virus programs in an attempt to ascertain if the programs detected the malware. According to information in the plea agreement, it was foreseeable to Gonzalez that his co-conspirators would use malware to steal tens of millions of credit and debit card numbers, affecting more than 250 financial institutions. Gonzalez was indicted in New Jersey in August 2009 for this criminal conduct.

Based on the terms of the plea agreement, Gonzalez will not seek a prison term under 17 years and the government will not seek a prison term of more than 25 years. Gonzalez pleaded guilty in September 2009 in Boston to 19 counts of conspiracy, computer fraud, wire fraud, access device fraud and aggravated identity theft relating to hacks into numerous major U.S. retailers including TJX Companies, BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble and Sports Authority. Gonzalez was indicted for those offenses in August 2008 in the District of Massachusetts. Gonzalez also pleaded guilty in September 2009 in Boston to one count of conspiracy to commit wire fraud relating to hacks into the Dave & Buster's restaurant chain, which were the subject of a May 2008 indictment in the Eastern District of New York.

As part of the plea agreement with the government, the New Jersey case was transferred to the District of Massachusetts for plea and sentencing. According to the terms of the New Jersey plea agreement, the parties agree that Gonzalez' sentence in the New Jersey case should run concurrently with the sentence imposed in the Boston and New York cases. Gonzalez remains in federal custody. Sentencing in the Boston and New York cases is currently scheduled for March 18, 2010, in Boston. Sentencing in the New Jersey case is scheduled for March 19, 2010.

"The Department of Justice will not allow computer hackers to rob consumers of their privacy and erode the public's confidence in the security of the marketplace," said Assistant Attorney General Breuer. "Criminals like Albert Gonzalez who operate in the shadows will be caught, exposed and held to account. Indeed, with timely reporting of data breaches and high-tech investigations, even the most sophisticated hacking rings can be uncovered and dismantled, as our prosecutors and agents demonstrated in this case."

"Commercial hackers like Gonzalez believe they are immune from detection and prosecution as they lurk in the shadows of the Internet," said U.S. Attorney Fishman of the District of New Jersey. "But time and again they are caught, prosecuted and sentenced to lengthy federal prison terms. Other hackers should sit up and take notice."

"The conviction of Mr. Gonzalez, and the unraveling of one of the most complex and large scale identity theft cases in history, should serve as a reminder to hacker organizations, that the Department of Justice will vigorously investigate and prosecute cybercrimes, regardless of their sophistication and global reach. Mr. Gonzalez's conviction is the result of unprecedented coordination across agency and geographical lines, and I want to commend the investigators and prosecutors who have worked tirelessly to bring this case to fruition," said U.S. Attorney Ortiz of the District of Massachusetts.

"Today's plea proves that although cyber criminals can threaten our nation's financial sector, the Secret Service and its many partners around the world will pursue and prosecute them," said U.S. Secret Service Director Sullivan. "Time and again, cooperation and advanced methodologies have allowed us to focus our resources in order to detect and prevent these types of crimes, wherever they originate."

The New Jersey case is being prosecuted by Assistant U.S. Attorneys Erez Liebermann and Seth Kosto of the District of New Jersey, Assistant U.S. Attorneys Stephen Heymann and Donald Cabell of the District of Massachusetts, and Senior Counsel Kimberly Kiefer Peretti of the Criminal Division's Computer Crime and Intellectual Property Section. All of these cases are being investigated by the U.S. Secret Service.

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More Than 300 Alleged La Familia Cartel Members and Associates Arrested in Two-Day Nationwide Takedown

Today Attorney General Eric Holder announced the arrest of nearly 1,200 individuals on narcotics-related charges and the seizure of more than 11.7 tons of narcotics as part of a 44-month multi-agency law enforcement investigation known as “Project Coronado.” The Attorney General was joined in announcing the current results of Project Coronado by DEA Acting Administrator Michele M. Leonhart, FBI Director Robert S. Mueller III and ATF Acting Director Kenneth E. Melson.

Over the past two days, 303 individuals in 19 states were arrested as part of Project Coronado, which targeted the distribution network of a major Mexican drug trafficking organization known as La Familia, through coordination between federal, state and local law enforcement. More than 3,000 agents and officers operated across the United States to make the arrests during the two-day takedown. During the two-day operation alone, $3.4 million in U.S. currency, 729 pounds of methamphetamine, 62 kilograms of cocaine, 967 pounds of marijuana, 144 weapons and 109 vehicles were seized by law enforcement agents.

“This unprecedented, coordinated U.S. law enforcement action—the largest ever undertaken against a Mexican drug cartel—has dealt a significant blow to La Familia’s supply chain of illegal drugs, weapons and cash flowing between Mexico and the United States,” said Attorney General Holder. “We will not allow these cartels to operate unfettered in our country, and with the increases in cooperation between U.S. and Mexican authorities in recent years, we are taking the fight to our adversaries. We will continue to stand strong with our partners in Mexico as we work to disrupt and dismantle cartel operations on both sides of the border.”

The La Familia cartel is a violent drug trafficking cartel based in the state of Michoacán, in southwestern Mexico. According to court documents, La Familia controls drug manufacturing and distribution in and around Michoacán, including the importation of vast quantities of cocaine and methamphetamine from Mexico into the United States. La Familia is philosophically opposed to the sale of methamphetamine to Mexicans, and instead supports its export to the United States for consumption by Americans. La Familia is a heavily armed cartel that has utilized violence to support its narcotics trafficking business including murders, kidnappings and assaults. According to one indictment unsealed in the Southern District of New York, associates of La Familia based in the United States have allegedly acquired military-grade weapons, including assault weapons and ammunition, and have arranged for them to be smuggled back into Mexico for use by La Familia. In a criminal complaint filed in Dallas, ATF investigators allege that operatives of La Familia shipped hundreds of firearms from the U.S. to Mexico over a 12-month period ending in October 2009. Individuals indicted in the cases are charged with a variety of crimes, including: conspiracy to distribute methamphetamine, cocaine and marijuana; distribution of methamphetamine, cocaine and marijuana; conspiracy to import narcotics into the United States; money laundering; and other violations of federal law. Numerous defendants face forfeiture allegations as well.

To date, Project Coronado has led to the arrest of 1,186 individuals and the seizure of approximately $32.8 million in U.S. currency, and approximately 2,710 pounds of methamphetamine, 1,999 kilograms of cocaine, 29 pounds of heroin, 16,390 pounds of marijuana, 389 weapons and 269 vehicles.

“Project Coronado, our massive assault on the La Familia Cartel, is part of our continued fight against all of the powerful Mexico-based drug cartels,” said DEA Acting Administrator Michele M. Leonhart. “This organization, the newest of Mexican cartels, is directly responsible for a vast majority of the methamphetamine pouring into our country across our Southwest Border, and has had a hand in fueling the cycle of violence that is wracking Mexico today. DEA, along with our U.S. and Mexican partners, are committed to strategically attacking the international and domestic drug trade with every tool at our disposal, and defeating those that thrive on the suffering of others.”

“Multi-agency coordinated investigations such as Project Coronado are the key to disrupting the operations of complex criminal organizations like La Familia. Together—with the strong collaboration of our international, federal, state and local partners—we have dealt a substantial blow to a group that has polluted our neighborhoods with illicit drugs and has terrorized Mexico with unimaginable violence,” said Director Mueller.

“ATF’s arrest of defendants in Project Coronado highlight the almost inseparable link between illegal trafficking of firearms and narcotics between the U.S. and Mexico,” said ATF Acting Director Kenneth Melson. “ATF is on the frontline against violent crime and focuses its investigative tools on criminal groups such as La Familia, which use firearms to further their illegal trade and ruin and endanger countless lives. It is alleged that La Familia used proceeds from the sale of drugs to purchase or obtain hundreds of firearms that were then moved illicitly to Mexico.”

“The operation to dismantle the La Familia drug trafficking organization in the United States demonstrates an unprecedented level of partnership and coordination at the local, state and federal levels. We at ICE are proud to have played an important role in yesterday’s operation and look forward to continuing to work with our law enforcement partners to target these criminal organizations,” said Immigration and Customs Enforcement (ICE) Assistant Secretary John Morton.

Arrests were made or charges have been unsealed yesterday and today related to Project Coronado in the following districts: Central District of California, Southern District of California, District of Colorado, Northern District of Georgia, District of Massachusetts, District of Minnesota, Southern District of Mississippi, Eastern District of Missouri, Northern District of Oklahoma, Southern District of New York, Northern District of New York, Middle District of North Carolina, District of South Carolina, Middle District of Tennessee, Eastern District of Texas, Northern District of Texas, Western District of Texas and the Western District of Washington. There were also arrests by state authorities in California, Nevada, North Carolina and Georgia. Assistance for Project Coronado was provided by the Criminal Division’s Narcotic and Dangerous Drug Section and Office of International Affairs. Additionally, local prosecutions will occur in San Diego, San Bernardino, Los Angeles and Orange County, Calif.; Clark County, Nev.; Gwinnett County, Ga.; and Pitt County, N.C.

The investigative efforts in Project Coronado were coordinated by the multi-agency Special Operations Division, comprised of agents and analysts from the DEA, FBI, ICE, Internal Revenue Service, U.S. Customs and Border Protection, U.S. Marshals Service and ATF, as well as attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section. More than 300 federal, state, local and foreign law enforcement agencies contributed investigative and prosecutorial resources to Project Coronado through the Organized Crime Drug Enforcement Task Forces.

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