Cyber investigators disclose best disguised crime in years

Risto Berendson
, reporter
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This is the best disguised credit card fraud in recent Estonian history, and the grandest. Sergei (26), one to watch football World Cup final game in Rio de Janeiro for other people’s money last year having paid €1,400 for two tickets, is behind bars for third month suspected in criminal organisation membership and computer fraud.

In addition to Sergei, three more accomplices are under arrest, aged 23 to 28. Of these, only one has an earlier criminal record, and that for a minor offence against property. The coterie thought to remain invisible for investigative bodies.

At least, they did all in their power for it to be so. «Never in my works have I met such a thorough conspiracy to avoid getting caught,» admits Northern District prosecutor Eneli Laurits, in charge of the investigation.

Yet, the gang caught the eye of Northern Prefecture cyber crimes and digital evidence service, last spring.

«It happened during another criminal investigation where, also, goods were being purchased for credit cards of strangers and, in order to avoid getting caught in Estonia, the goods were ordered to a post office in Finland,» related the head of the service Hannes Kelt.

Mighty conspiracy

But let’s start from the very beginning. In the April of 2014, the Northern Prefecture cyber crimes and digital evidence begun by far the bulkiest case of their short history of 1.5 years. «This occupied the major part of last year’s investigative resources,» notes Mr Kelt.

This was no classical computer fraud investigation. In this criminal case, the police has no crime notice by any person or foreign bank suffering loss of money. That was what the fraud was built upon: to act unnoticed and avoid being seen by investigators.

Alas, this was not to be. For six months, data was being collected, during which the investigators established hundreds of forbidden transactions. Of these, 99 percent took place outside of Estonia. Last October, the investigators finally decided to go pay the guys a visit.

The guys were astonished, of course. With no employment contract physically tying them to Estonia, the chiefs of the scheme were just planning to move away from Estonia. «To a land much warmer than ours,» specifies Mr Kelt.

Instead of the sunshine, however, all Sergei has been able to enjoy is the walls of his cell at preliminary investigations prison. The very first search in his dwelling place with his parents unearthed a heap of evidence regarding card frauds.

With the unemployed Sergei, about €20,000 of cash were discovered. In a garage rented in another part of town, what they discovered was a kind of a distribution centre of stolen goods: various kinds of technology, German-made Cube bicycles worth €1,000–1,500, a copying machine of plastic cards, a brand new freshly unpacked gold melting oven etc. The latter, probably, had not been acquired to resell, rather to make money by melting golden ornaments to be purchased.

Generally speaking, credit card fraud and the obtaining of other people’s credit card data in specialised internet forums is nothing extraordinary. Still, the activity Sergei is accused of was a long step forwards when it comes to conspiracy – for he got his cards data from forums to enter which an invitation was needed from the inner circle.

Getting caught was supposedly avoided by so-called virtual machines used to hide themselves while making purchases with credit cards of strangers. In theory, this was supposed to be the perfect crime. Sergei was driving around Tallinn with a used BMW with fancy extras, and enjoyed rides in limousines while on pleasure trips abroad. All that at other people’s expense.

To leave no evidence, all parties involved used encrypted data communication between themselves. The criminal idea as such was simple: purchase at full price for other people’s money, and to resell at considerably lower prices.

Pursuant to suspicions, Sergei ordered valuable stuff by credit card data at web stores: bikes, photo cameras, mobile phones, tablet computers, air heat pumps, furniture etc. 

To avoid being linked with the goods, he ordered these to post offices in some European countries. Like Germany, Austria, Czech Republic, Sweden of Finland. Mainly the latter. Individuals hired by Sergei’s closest assistant travelled to get the goods; stuffing their luggage full of laptops, the marched off to an airplane.

The larger consignments were brought by car. And if the stuff was too much to fetch, if was sent to Estonia by post.

Victims all over the world

Sergei never went to get the goods. The business trips by couriers, however, were paid for by credit cards of strangers. The crooks basically paid nothing for all their operations.

Though the criminal investigations concern transactions of 2014, this was probably going on for years. «I’d suggest that the materials of the criminal investigation only touch the tiny tip of the iceberg,» said the district prosecutor Ms Laurits.

To avoid the criminal case from ballooning too big, the investigators mainly focussed on the victims in Europe and that mainly during the last year. However, the victims are also found in Japan, Brazil, USA, Australia, and New Zealand.

So, the investigators have lots of work on their hands, but the finishing line is in sight. The prosecutor’s office and police hope to send the case to court this spring.

* The claims presented in the article are based on facts established during preliminary investigations and haven’t thus been verified at court yet.


Card fraudster set at liberty after less than year

Last week, credit card fraudster Maksim (33), having sentenced last year for two years and four months in jail at compromise procedure, was set at liberty prematurely having done time for 11 months.

The man, earlier criminally punished for five times was set at liberty by court, while subject for six months to electronic surveillance.

From June 2013 to February 2014, Maksim purchased technology for credit cards of strangers and booked trips abroad. This he did for €7,000, afterwards selling these at cheaper prices and dividing the money with two accomplishes. All in all, he emptied other people’s credit accounts for at least €14,000.