Business & Practice

Russian Hacker Drinkman Pleads Guilty in Largest Data Breach

Sept. 15, 2015, 9:55 PM

By David Voreacos, Bloomberg News

A Russian hacker pleaded guilty in the biggest data-breach case in U.S. history, admitting he helped steal 160 million credit-card numbers.

Vladimir Drinkman, 34, said Tuesday in federal court in Camden, New Jersey, that he conspired with four other men to pillage credit card numbers from Heartland Payment Systems Inc., 7-Eleven Inc., the Hannaford Bros. Co. grocery chain and at least 14 other companies from 2005 to 2012.

He arrived in the U.S. on Feb. 13 after losing an extradition fight in Amsterdam. He was arrested there in 2012 while vacationing with another Russian, Dmitriy Smilianets, who is charged as a black-market broker. Smilianets is in U.S. custody.

Prosecutors said Drinkman helped find vulnerabilities in information systems and used malware to steal passwords and card numbers. An indictment paints Drinkman as a master at evading online security and penetrating corporate networks, assisted by Smilianets as the cash-out specialist who priced and sold the card numbers. Three other alleged co-conspirators — two Russians and one Ukrainian — remain at large.

“Defendants like Vladimir Drinkman, who have the skills to break into our computer networks and the inclination to do so, pose a cutting edge threat to our economic well-being, our privacy and our national security,” Paul Fishman, the U.S. attorney in New Jersey, said in a statement.

Drinkman pleaded guilty to conspiracy to gain unauthorized access to computers and conspiracy to commit wire fraud. He faces as long as 30 years in prison for the wire fraud charge.

U.S. District Judge Jerome Simandle posed a series of questions to Drinkman, who wore blue jeans without a belt and a black T-shirt.

The judge asked whether Drinkman and others conspired from August 2005 until his arrest in June 2012 “to hack into corporate networks to steal sensitive financial information and then sell that information on the Internet for a profit?” He replied yes.

Drinkman fought extradition to the U.S. from a Dutch prison for 2 1/2 years. He said in a Bloomberg News interview published in January that he passed his time reading the books that gave rise to HBO’s “Game of Thrones.” In the interview, his first with U.S.-based media, he said he was innocent of the charges.

“They show me as a leader of a group that was damaging U.S. strategic financial infrastructure for 10 years,” he said. Drinkman spoke from a prison psychiatric ward where his lawyer said he was transferred as a preventive measure after an unfavorable November 2014 ruling in the extradition case.“I don’t believe the process in the U.S. will be a fair one,” Drinkman said at the time.

Smilianets, who pleaded not guilty to all charges against him in August 2013, had been in jail in Morristown, New Jersey, mastering Spanish, studying Chinese and considering whether to accept a plea deal, his father said in an interview.

Still at large are Aleksandr Kalinin of St. Petersburg, Roman Kotov of Moscow and Mikhail Rytikov of Odessa, Ukraine.

The case is U.S. v. Drinkman, 09-cr-00626, U.S. District Court, District of New Jersey (Camden).

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