Three charged in online brokerage scam
By Dawn Kawamoto
Staff Writer, CNET News.com
Published: March 13, 2007, 8:54 AM PDT
Federal
authorities have charged three men with hacking into online brokerage accounts
and using the proceeds to manipulate the stock of Google, Sun Microsystems and
12 other companies.
Indian nationals
Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan were
arrested and indicted on multiple counts, marking the first time an arrest and
federal charges were made in an online brokerage account intrusion case.
The men
allegedly took positions in 14 stocks and then hacked into online U.S.
brokerage accounts between July and November 2006. Using the victims' own
account funds, the defendants allegedly pumped up the market for those shares
and then dumped them, accumulating profits of more than $121,500. The
brokerages subsequently suffered damages of more than $875,000 for the
compromised accounts.
The indictment
was unsealed Monday in a Nebraska federal court. Marimuthu and Chockalingam
Ramanathan were charged with one count of conspiracy, eight counts of computer
fraud, six counts of wire fraud, two counts of securities fraud, and six counts
of aggravated identity theft. The third person in the case, Thirugnanam
Ramanathan, was charged with one count of conspiracy, two counts of computer
fraud and two counts of aggravated identity theft.
Marimuthu was
arrested in late December by Hong Kong police under charges including computer
fraud and money laundering. Thirugnanam Ramanathan was arrested by Hong Kong
authorities in late January under a U.S. provisional arrest warrant.
Chockalingam Ramanathan is still at large.
The Securities
and Exchange Commission filed a civil complaint in the case, seeking a
preliminary and permanent injunction, disgorgement of illegal proceeds and monetary
damages. The SEC has filed four account intrusion cases since December,
involving defendants in Estonia, Latvia and now Hong Kong and Malaysia.