Former New Jersey federal prosecutors said the recent indictments in the largest known computer hacking and securities fraud scheme are a testament to the way New Jersey U.S. Attorney Paul Fishman has made cybercrime a top priority by partnering both with fellow law enforcement agencies and the private sector.
On Aug. 11, Fishman’s office, in conjunction with the U.S. Attorney’s Office for the Eastern District of New York, the U.S. Department of Homeland Security, the Secret Service, the FBI and the U.S. Securities and Exchange Commission, announced charges against a group of nine hackers and stock traders who allegedly made $30 million in an international scheme to infiltrate the networks of three business newswires and trade on financial information contained in yet-to-be published corporate press releases.
The SEC also unsealed a civil complaint Aug. 11 charging the nine indicted defendants and 23 others in the scheme, which the agency says generated a total of more than $100 million in illegal profits.
Scott Christie, a partner at McCarter & English in Newark who headed the Computer Hacking and Intellectual Property Section of the New Jersey U.S. Attorney’s Office until 2004, said cybercrime has become increasingly widespread and intricate since the office’s initial foray into the area during his time there.
“In the early days, many of the cases involved relatively unsophisticated crimes—Internet fraud on eBay or a hacking case involving a single computer from a disgruntled former employee,” he said.
But while Christie did encounter more complex cases later in his tenure—one of the last cases he worked on involved bringing down the 4,000-member international cyberfraud organization known as Shadowcrew—”it was hard getting traction and resources” for cybercrime investigations at the time because the office was more focused on terrorism and political corruption investigations, he said.
“So Paul, to his credit, has elevated the computer crime section of the U.S. Attorney’s Office and clearly has made it an example for other U.S. attorney’s offices around the country by virtue of the personnel he has devoted to these cases, by virtue of the types and complexity of these cases and by virtue of the success they’ve had,” Christie said.
Christie said federal law enforcement agencies have all begun to realize that cybercrime is a problem that’s not going away. A decade ago it might have taken considerable convincing to get, for example, the FBI to devote significant resources to a cybercrime case, he said.
“I suspect it’s not such a hard sell these days,” he said. “They’re realizing that devoting investigative resources here is a big return on investment.”
Christie said part of what has gotten the government’s attention recently is the public outcry spurred on by the increased prevalence of data breaches and cyber fraud schemes in the news.
“There is a clamoring by the public to try and put a brake on some of this activity,” he said. “If people believe their private information is going to be stolen from their health insurer or the retail store they use, that makes it personal and it makes it an issue that resonates with them more than before.”