By Christopher M. Matthews, Emily Glazer and Devlin Barrett
U.S. authorities charged five individuals Tuesday in cases
connected to a cyberattack on J.P. Morgan Chase & Co. last
year, bringing criminal counts ranging from securities fraud to
money laundering, according to people familiar with the matter.
Four of the men were arrested in Florida and Israel while a
fifth remains at large, U.S. officials said.
The men were charged in a Manhattan federal court Tuesday. Three
of the men were accused of running a pump-and-dump scheme to
manipulate stock prices, while the other two were accused of
operating an illegal Bitcoin operation. In a separate complaint,
the Securities and Exchange Commission filed civil charges against
the three men related to the pump-and-dump stock manipulation.
None of the court documents detailed the men's connection to the
J.P. Morgan hack last summer. U.S. officials confirmed a link but
declined to elaborate.
The names of two of the men arrested Tuesday were included in an
FBI memo circulated last fall that listed several persons of
interest related to the J.P. Morgan hack, according to a person
familiar with the situation.
When the bank announced last year that its system had been
breached, it said customer contact information had been compromised
for about 76 million households world-wide. The stolen information
included names, phone numbers and email addresses. The bank said
hackers were unable to gather detailed personal information, such
as account numbers, passwords, Social Security numbers or dates of
birth.
Such contact information could be valuable to spammers seeking
to target millions of email accounts as part of a scam.
Investigators believed other financial institutions were
targeted by the same hackers, without the success they had against
J.P. Morgan, according to people close to the case.
At the time the breach was announced, initial evidence suggested
the hacker or hackers may have been located in Russia, prompting
speculation that the Russian government could have been seeking to
retaliate over diplomatic disputes with the U.S. -- a suggestion
that was discounted by a number of federal cybersecurity
officials.
On Tuesday, law enforcement agents in Israel arrested Gery
Shalon and Ziv Orenstein. Federal prosecutors in Manhattan charged
them in an indictment with securities fraud and other charges in
connection with an alleged multimillion-dollar pump-and-dump
scheme. Mssrs. Shalon and Orenstein are both Israeli citizens and
the U.S. will seek their extradition, according to prosecutors.
Prosecutors also charged a third man, Joshua Samuel Aaron, who is a
U.S. citizen living in Russia and remains at large.
In two separate complaints, New York prosecutors charged Yuri
Lebedev and Anthony Murgio with running an unlicensed Bitcoin
exchange. Both men were arrested at their homes in Florida on
Tuesday, prosecutors said. The pair allegedly operated Coin.mx,
which allowed customers to exchange cash for virtual currency.
Mssrs. Lebedev and Murgio allegedly allowed victims of cyberattacks
to buy bitcoins to pay ransom to hackers who had seized control of
the victims' computers, prosecutors said, allowing hackers to
receive the proceeds of their crime.
Write to Christopher M. Matthews at
christopher.matthews@wsj.com, Emily Glazer at emily.glazer@wsj.com
and Devlin Barrett at devlin.barrett@wsj.com
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