Officials in Israel and Florida arrested four men on Tuesday with a fifth remaining at large. He's thought to be in Russia, judging off an Instagram post from his wife's account. The FBI has yet to officially declare that the men connect to the JPMorgan hack, which also impacted 13 other firms, including Fidelity Investments.
Bloomberg News, however, cited a “person familiar with the investigation” who claims the men used stolen JPMorgan data, including emails and customer names, to promote stocks via a spam campaign.
Gery Shalon, Ziv Orenstein and Joshua Aaron allegedly orchestrated the scam. Shalon and Orenstein, Israeli citizens, were arrested while Aaron, an American residing in Israel, remains free.
The spam emails allowed them to manipulate the price and volume of traded penny stocks. They'd sell their purchased stocks once the price was inflated through their phony email advice. The “pump-and-dump” scheme, as the complaint calls it, raked in significant cash.
One scam, for instance, took place prior to the hacks but allowed the men to sell their stocks for a total of more than $300,000 after its price rose to $0.33 per stock. Prior to the spam campaign, it averaged a price of $0.017.
Two arrests in Florida on Tuesday, of Anthony Murgio and Yuri Lebedev, apparently connect to the scheme through the two men's unlicensed Bitcoin exchange. Murgio and Aaron became friends during their time in college at Florida State, Bloomberg reported.
Murgio and Lebedev were each charged with one count of conspiracy to operate an unlicensed money transmitting business and one count of operating an unlicensed money transmitting business. As part of their Bitcoin business, the men allegedly exchanged cash for Bitcoins for victims of ransomware attacks, which the FBI says “knowingly enabled criminals responsible for those attacks to receive the process of their crimes.”
The government does not acknowledge that all the men were connected in some way, and the FBI wouldn't provide a comment when asked by SCMagazine.com. JPMorgan wouldn't comment, either.
Bloomberg's source claims that Murgio and Aaron traveled to Russia often in order to maintain a relationship with Russia's underground cybercrime operators. It is thought that these cybercriminals executed the JPMorgan hack, which fueled the cycle of spam and stock inflation.