The hacker attack on JP MORGAN and other US financial institutions in 2014 is described by the U.S. authorities as the largest cybercrime case to date. Data of more than 100 million customers have been stolen in multiple attacks. This stolen data, in turn, was used to carry out a gigantic securities market manipulation to rip off U.S. investors. The operators of the cybercrime enterprise around Gery SHALON are supposed to have generated millions of profit at the expense of cheated U.S. retail investors.
Cybercrime Startup
According to the U.S. prosecutors, Gery SHALON (aka Gabi / Garry / Gabriel SHALELASHVILI), an Israeli from Georgia, was the “founder” and “principal” of this cybercrime enterprise. The charges contained in the indictment are currently merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Gery SHALON is the son of Shota SHALELASHVILI, a member of the Georgian parliament (MP) and deputy of the Georgian Dream Party. Once a sort of a superstar among startup entrepreneurs in Israel, he is not a technician or hacker himself. He is certainly as ingenious as he is unscrupulous as organizer and strategist. The indictment is really worth reading and maybe even more entertaining than some fictitious thrillers. SHALON has engaged with his Russian hacker friends for his cybercrime enterprise which provides the political ingredient to this thriller. Together with his friends Ziv ORENSTEIN and Joshua Samuel AARON, SHARON has, according to the U.S. prosecutors, established a worldwide network of companies and bank accounts. Partly with forged identities.
For the movement of the illegally acquired funds, dedicated payment service providers (PSP) such as IDPay and Todur were established. These PSP’s were also made available to other criminal companies. According to the indictment, with the PSPs alone, SHALON’s cybercrime enterprise is said to have generated illicit profits amounting to over USD 18 million.
Arrest, indictment, and cooperation
After the cybercrime enterprise went up in 2015 and SHALON was first arrested in Israel in 2015 and then extradited to the USA in 2016, he purportedly agreed to cooperate with the U.S. authorities in a so-called plea deal or pre-trial agreement. The indictment against SHALON and his co-conspirators has been unsealed in November 2015 charging Gery SHALON with “orchestrating massive computer hacking crimes against U.S. financial institutions, brokerage firms and financial news publishers, including the largest theft of customer data from a U.S. financial institution in history (the U.S. Financial Sector Hacks)”.
SHALON’s cooperation with U.S. authorities led to the arrest of several members of his enterprise. Most recently, the Russian Andrei TYURIN was arrested in Georgia and extradited to the USA in September 2018.
Some of SHALON’s co-conspirators have already been sentenced to prison. Gery SHALON, Ziv ORENSTEIN, Joshua Samuel AARON, and Andrei TYURIN have already been indicted but the trial is still pending. Allegedly, Gery SHALON was released from prison after the arrest for USD 403 million but has to stay in the USA until the trial.
The Missing KHOKHOLKOV-Link
An essential part of the indictment against Gery SHALON and his friends in the USA is the operation of an illegal payment system for their own and other criminal activities. The indictment mentions IDPay and Todur, which may be called “Dark Web Payment Services Providers”.
According to the information available to us, the driving force behind these payment systems was the Russian Vladislav KHOKHOLKOV, a close partner of Gery SHALON. This KHOKHOLKOV is listed by Spamhaus as “BadCow” and is regarded as one of the leading spammers. He is said to have been a partner of the top hacker Leo KUVAYEV, who has now been convicted and imprisoned in Russia. KHOKHOLKOV is a real cybercrime veteran with a long track record. He allegedly was already involved in another SPAM Gang in the US some 15 years ago on KUVAYEV’s side.
The Finished Puzzle and the Binary Options
After the arrest of SHALON KHOKHOLKOV changed his name and now appears as Vladislav SMIRNOV. He is considered the top guy for illegal payment systems in the Russian-Israeli cybercrime scene. In recent years, SMIRNOV has been involved as PSP in the worldwide fraud around the binary options. He co-founded DreamsPay Technology s.r.o. in the Czech Republic and, via OLDYPAK CAPITAL LLP, is the majority shareholder of TRADOLOGIC. The latter was one of the leading binary platforms and according to TRADOLOGIS‘s own statements had 240 white label solutions with more than USD 700 million trading volume. Given this publicly recorded activities of “Vlad” SMIRNOV, one may suggest that he is a main actor in the binary option theater.
Vladislav SMIRNOV formerly known as KHOKHOLKOV is apparently the last piece of the JP MORGAN puzzle that the US authorities have put together in recent years. And after completion of this puzzle one can clearly see that the stock manipulation system of Gery SHALON for the years 2012 to 2014 has been seamlessly transformed into the now illegal system of binary options. Investor manipulation as a business principle has remained the same.
