Russian Hacker Gets Nine Years in Prison for US Insider Trading

A Russian man with ties to the Kremlin was ordered by a US judge to serve nine years in prison for leading an insider-trading ring that earned tens of millions of dollars by hacking into systems used by public companies to file earnings reports.

Vladislav Klyushin, 42, was sentenced Thursday by US District Court Judge Patti B. Saris in Boston and ordered to forfeit more than $34 million — representing his personal profits from the trades. He was convicted in February of conspiring to obtain unauthorized access to computers and commit wire fraud and securities fraud.

Klyushin, of Moscow, may be the highest-level Kremlin insider taken into custody by the US in recent years, and authorities suspected he had extensive knowledge of efforts to interfere with the 2016 US presidential election as well as the hack into Democratic Party email servers and the assassination attempt of a former spy.

He was extradited from Switzerland in 2021 after being arrested earlier that year on a family ski trip. The US Justice Department charged four other people with working with Klyushin, all of whom remain at large.

The government said Klyushin owned M-13, a Moscow-based company that offered services seeking to exploit vulnerabilities in computer systems, and used the same hacking methods advertised by his company to gain access to earnings reports that had been not made public for hundreds of companies, including Capstead Mortgage Corp. and Tesla Inc.

Klyushin and his co-conspirators earned almost $100 million trading on the information from about $9 million in investments — though they also lost close to $10 million on other trades, prosecutors said.

Russia had been willing to trade imprisoned former US Marine Paul Whelan for Klyushin, people familiar with the matter told Bloomberg. Whelan, who was sentenced to a 16-year term in 2020 on spying charges he denies, told CNN in May that he’s confident the US is working to secure his release.

Read More: Kremlin Insider in U.S. Hands May Have Secrets of 2016 Hack

The case is US v Klyushin, 21-cr-10104, US District Court, District of Massachusetts (Boston).

To contact the reporter on this story:
Chris Dolmetsch in Federal Court in Manhattan at cdolmetsch@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

Steve Stroth

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