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Press Release For Immediate Release May 5, 2004 |
U.S. Department of Justice
United States Attorney District of Massachusetts John Joseph Moakley |
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Pennsylvania Man Sentenced to Prison for Accessing
Massachusetts Investors On-line Investment Account and Making $46,000
in Unauthorized Trades
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A Pennsylvania man was sentenced today following his earlier conviction
for the unauthorized access to a protected computer and other crimes in
connection to his unlawfully accessing a computer belonging to an individual
("the Investor") residing in Westborough, Massachusetts, and
using information gained through that intrusion to make unlawful trades
with funds in the Investors on-line brokerage account. By July 10, 2003, approximately nine days before the expiration date of DINH's Cisco options, Ciscos stock was trading at approximately $19.00 per share, making it likely that DINH's $15.00 Cisco put options would be worthless at the time they expired and DINH would stand to lose the entire $91,200 he had paid to purchase the options. On July 11, 2003, DINH used the password and login information for the Investor's online account to place a series of buy orders for the Cisco options, depleting almost all of the account's available cash, approximately $46,986. The buy orders for the Investor's account were filled with 7,200 Cisco put options sold from DINH's account. As a result of the execution of these buy orders, DINH avoided at least $37,000 of losses, (some of the $46,986 in funds taken from the Investor's account went to commission costs). At today's hearing, the prosecutor explained to the Court that the actual loss to the victim in the case was $46,986, but the intended loss was upwards of $59,561. DINH had placed additional purchase orders from the Investor's account which went unfilled only because the Investor's account had already been depleted of funds by DINH. The investigation was conducted by the Federal Bureau of Investigation, the Securities and Exchange Commissions Office of Internet Enforcement, with the cooperation and assistance of the U.S. Attorney's Office for the Eastern District of Pennsylvania and the Department of Justice's Computer Crime and Intellectual Property Section. The prosecution of Internet fraud and other cybercrimes is a key focus
of the U.S. Attorney's Office. The U.S. Attorney's Offices Computer
Hacking and Intellectual Property Section also known as "CHIPS",
was created to prosecute high-technology and intellectual property offenses,
including computer intrusions, denial of service attacks, virus and worm
proliferation, Internet fraud, and telecommunications fraud. The case
was prosecuted by Assistant U.S. Attorney Allison D. Burroughs in Sullivans
Computer Hacking and Intellectual Property Section of the Economic Crimes
Unit and Assistant U.S. Attorney Jonathan Kotlier, Chief of Sullivan's
Economic Crimes Unit, with the assistance of William Yurek, Trial Attorney
with the Department of Justice's Computer Crime Section. ### |
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