ETFC E TRADE Financial Corporation

In their first U.S. court appearances, two Israeli men pleaded not guilty on Thursday to charges that they broke into a dozen companies' computer networks, including J.P. Morgan Chase & Co., to facilitate a global network of criminal activity.

Gery Shalon and Ziv Orenstein were recently extradited to the U.S. from Israel, where they had been in custody since their arrest last summer. At the time, a third defendant, Josh Aaron, had been at large. Mr. Aaron, a U.S. citizen, has since been arrested in Russia and is expected to be brought to the U.S., according to people familiar with the matter.

Federal prosecutors accused the three men and their accomplices of carrying out data breaches at a dozen companies and turning the stolen information, including customers' email addresses and phone numbers, into hundreds of millions of dollars. The hacking allegedly facilitated a host of other crimes, including illegal internet casinos, pump-and-dump schemes, a payment processing service for other criminals and an unlicensed bitcoin exchange.

Mr. Shalon's lawyer, Paul Shechtman, and Mr. Orenstein's lawyer, Alan Futerfas, didn't present a bail package at Thursday's hearing in Manhattan federal court, so the two men will stay in federal custody.

Mr. Shechtman and Mr. Futerfas declined to comment. A lawyer for Mr. Aaron couldn't be identified.

In the alleged scheme, one of the biggest cyberattacks was against J.P. Morgan, the largest U.S. bank by assets, where the men stole the contact information of more than 83 million customers, according to officials. Prosecutors also say the men orchestrated hacks into E*Trade Financial Corp., Scottrade Inc. and Dow Jones & Co., the parent company of The Wall Street Journal.

In a separate but related indictment, prosecutors charged four men with connections to a bitcoin exchange called Coin.mx, which was allegedly owned by Mr. Shalon. According to prosecutors, Coin.mx was used by hacking victims to pay ransoms in bitcoin to cyberthieves who had seized control of victim's computers—an attack known as ransomware. That case is pending and is scheduled to go to trial in October.

Devlin Barrett contributed to this article.

Write to Nicole Hong at nicole.hong@wsj.com

(END) Dow Jones Newswires

June 09, 2016 17:25 ET (21:25 GMT)

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