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Feds: Russian Man Who Created SpyEye Pleads Guilty

Feds: Russian Man Who Created SpyEye Pleads Guilty
January 30, 2014 9:38AM

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Aleksandr Andreevich Panin, a Russian man also known as Gribodemon and Harderman, has pleaded guilty to conspiracy to commit wire and bank fraud for his role as the primary developer and distributor of the malicious software known as SpyEye, which, according to industry estimates, has infected over 1.4 million computers in the world.

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A Russian man pleaded guilty to a conspiracy charge Tuesday after federal authorities say he created a computer program that has been used to drain bank accounts.

Aleksandr Andreevich Panin, who's also known as "Gribodemon" and "Harderman," pleaded guilty to a single count of conspiracy to commit bank fraud and wire fraud. He appeared in federal court wearing an orange jail uniform with his legs chained together as he entered a guilty plea after reaching a plea agreement with prosecutors.

Another man, Hamza Bendelladj, was also indicted in the case and pleaded not guilty in May after being extradited from Thailand, where he was arrested a year ago. The case against him is still pending.

Authorities say the 24-year-old Panin is the main author of SpyEye. The program is a type known as a banking Trojan, which was implanted onto computers to harvest financial information so its users could drain bank accounts. Authorities said the malware has infected more than 1.4 million computers in the United States and abroad and is responsible for untold amounts of financial theft.

Federal prosecutor John Horn called Panin "one of the pre-eminent cybercriminals that we've been able to apprehend and prosecute so far." Operating from Russia, Panin "wrote and polished the code for SpyEye until he had a product that experts described as professional grade," Horn said.

Trojans such as SpyEye can be profitable for cybercriminals. A small group of hackers in Eastern Europe arrested in 2010 was able to steal about $70 million from companies, municipalities and churches in Europe and the U.S.

SpyEye was designed to automatically steal sensitive information -- such as bank account credentials, credit card information, passwords and PIN numbers -- after being implanted in victims' computers. After the program took control of a computer, it allowed hackers to use a number of covert techniques to trick victims into giving up their personal information -- including data grabbing and presenting victims with a fake bank account page. The information was then relayed to a command and control server, which was used to access bank accounts.

Panin conspired with others, including Bendelladj, to advertise the SpyEye virus in online forums focused on cybercrime and other criminal activity and sold versions of the software for prices ranging from $1,000 to $8,500, prosecutors said. Cybercriminals were able to customize their purchases to choose specific methods of gathering personal information from victims. He is believed to have sold it to at least 150 clients. A single client of his, known by his online name "Soldier," reportedly used the program to make more than $3.2 million in a six-month period, Horn said. (continued...)

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© 2014 Associated Press/AP Online syndicated under contract with NewsEdge. All rights reserved.

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