SHALON was (perhaps is) the principal of a vast and globally acting cybercrime enterprise which comprises a variety of lines of business. Among others, the enterprise entertains online gaming projects, was engaged in a huge securities market manipulation scheme in the U.S. (“pump and dump scheme”), hacked large U.S. financial institutions and stole some 100 million customer data. Moreover, SHALON and his officers operated multinational payment processors for illegal drug suppliers, malicious software distributors. Finally, the enterprise owned and controlled Coin.mx, an US-based Bitcoin exchange that operated in violation of anti-money laundering laws.
Besides Gery SHALON as the principal of the cybercrime enterprise, some more officers and co-conspirators orchestrated its development:
- Vladislav SMIRNOV
- Gal BARAK
- Ziv ORENSTEIN
- Andrey TYRIN
Illegal Internet Gambling
Gery SHALON’s cybercrime enterprise operated at least 12 illegal online casinos
SHALON was heavily engaged in massive hacks and
Former employees of those casino and gambling companies have told investigators that those were located in Kiev, Ukraine, and were actively promoting their offerings to customers in the US, where such services were generally prohibited since 2006. Evidently, SHALON established the European connection already with his illegal online casino business. Bloomberg’s source claims that SHALON’s co-conspirators Anthony
The Payment Processor Scheme
SHALON’s cybercrime enterprise operated the illegal payment processing schemes IDPay and Todur for criminal activities. To deceive banks and credit card issuers they miscoded payment transactions, in violation of bank and credit card company rules and regulations. Furthermore, they bribed corrupt bank officials who then willfully ignored the criminal nature of the transactions. Consequently, the U.S. prosecutors charged SHALON, AARON, and ORENSTEIN with running an illegal payment processing business where they collected $18m in fees alone.
For their European FOREX and Binary Options schemes, SHALON’s cybercrime enterprise entertained other payment processors such as the Czech DreamsPay or NetPay. Read more on the European Connection further down.
The illegal Bitcoin Exchange
U.S. authorities claim that between 2013 and 2015 SHALON’s cybercrime enterprise owned Coin.mx, a Bitcoin exchange service, which was operated by Anthony
They deliberately misidentified and miscoded credit and debit card transactions in order to trick banks into allowing the transactions to be completed. Additionally, they acquired control over the small Helping Other People Excel Federal Credit Union (“HOPE FCU”) by bribing the senior officials, among them the then-chairman and CEO, Pastor Trevon GROSS. They installed their people on HOPE FCU’s Board of Directors and transferred Coin.mx’s banking operations to the credit union which became the captive bank for Coin.mx’s unlawful business.
Anthony MURGIO was arrested in 2015, the U.S. prosecutors indicted him in 2016. He pled guilty to conspiring to operate an unlicensed money transmitting business, conspiring to commit wire fraud and bank fraud, and conspiring to obstruct an examination of HOPE FCU by the NCUA in furtherance of the illegal Coin.mx scheme. MURGIO was sentenced to 66 months in prison, three years of supervised release, and a $12,000 fine. He pleaded guilty to conspiracy charges, operating an illegal bitcoin exchange suspected of laundering money for criminals and being linked to hacking at JPMorgan Chase & Co. His conspirators with Coin.mx, the credit union manager Trevon GROSS, and the programmer and exchange operator Yuri LEBEDEV were sentenced to 60 months and 16 months in prison respectively.