U.S. Indicts Russian Citizen in Hacking Case


A federal grand jury Wednesday indicted a Russian computer whiz for allegedly hacking into the systems of three Southern California credit card processing firms and then offering to stop his activities if the companies hired him as a “security consultant.”

The charges cap a yearlong probe by the FBI, which eventually arrested 20-year-old Alexey V. Ivanov in a sting operation in which undercover agents posing as e-commerce tycoons lured him to Seattle for a “job interview” and then arrested him. Ivanov faces similar hacking charges in Connecticut and Washington state.

One of Ivanov’s key targets was Sterling Microsystems of Anaheim, according to the indictment. Company officials said Wednesday that Ivanov and company programmers battled over the Internet for a year as the alleged hacker tenaciously tried to pry open the company’s store of credit card data.


“It was a nightmare,” said Sterling Microsystems Vice President Bob Madore.

“It was like somebody drove a demolition truck through our front door. This guy was relentless, and we didn’t get sleep for many weeks. Every time we’d knock him off the system he’d come right back.”

Federal officials say the indictment is connected with just one of dozens of crimes that Ivanov committed while tapping at his computer keyboard an ocean away.

The most serious charges involve claims that Ivanov hacked his way into e-commerce outfits in 10 states and raided their credit card information. But, in an old twist to a new crime, Ivanov is accused of calling the businesses and demanding that they hire him as an employee or consultant, or risk having their credit card information posted on the Internet.

In filing charges Tuesday, the U.S. attorney’s office alleged that Ivanov tapped into a San Diego Internet service provider, CTS Network Services, and used that operation to launch raids on Sterling Microsystems. Authorities charge that Ivanov also hit two other firms, Rancho Cucamonga-based Transmark and Los Angeles-based NaraBank.

“He was certainly more sophis ticated than the average hacker,” said Assistant U.S. Atty. Arif Alikhan. “Most people will just try to grab some credit card numbers and use them; this guy was also getting merchant numbers.”

Ivanov and a cohort were apprehended by U.S. officials in Seattle in November, when the pair met with undercover FBI agents posing as owners of a hacked company.


While Ivanov and Vasiliy Gorchkov, 25, demonstrated to the agents how to close the breaches and communicated with their computer in Russia, special computer programs recorded their own passwords, according to court documents.

Agents then used that information to hack into Ivanov’s computer and slapped handcuffs on him and Gorchkov.

Gorchkov is also facing computer intrusion charges along with Ivanov in Washington.

Ivanov will be arraigned in federal court in Santa Ana after the charges in New Haven, Conn., and Seattle have been resolved. If convicted of all 15 counts in the indictment, he faces a maximum possible penalty of 90 years in prison.