A 28-year-old Ukrainian hacker pleaded guilty Monday to taking part in a long-running international scheme in which yet-to-be published financial news releases were stolen and the information used in illegal trading that generated an alleged $30 million in profits.
The scheme - in which a Glen Mills man, Vitaly Korchevsky, 50, also has been charged - involved trading ahead of about 800 corporate news releases, hours or even days before the releases went public. The traders allegedly paid the hackers a percentage of the illegal profits and used foreign shell companies to share in them, as well, according to federal prosecutors.
Vadym Iermolovych, 28, of Kiev, Ukraine, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark, N.J., to conspiracy to commit wire fraud, conspiracy to commit computer hacking, and aggravated identity theft. The charges were filed in federal court in Newark because some of the trades were done in New Jersey, according to U.S. Attorney Paul Fishman's office.
Iermolovych was part of a large group that hacked various news-wire services between February 2010 and August 2015, according to the U.S. Attorney's Office. He was arrested Nov. 12, 2014, in connection with other charges related to computer hacking and credit-card fraud. Iermolovych faces up to 20 years in prison at sentencing, set for Aug. 22.
Monday's guilty plea marked the first conviction of one of the hackers allegedly responsible for breaching the widely used Marketwired, PR Newswire, and Business Wire services and stealing press releases containing confidential financial information relating to companies traded on the NASDAQ and the New York Stock Exchange.
Five other members of the conspiracy - two computer hackers and three securities traders - were charged by federal indictment brought in New Jersey.
The related 23-count indictment charged Ivan Turchynov, 28; Oleksandr Ieremenko, 24; and Pavel Dubovoy, 33, all of Ukraine; and Arkadiy Dubovoy, 51, and Igor Dubovoy, 29, of Alpharetta, Ga. The latter two pleaded guilty to wire-fraud conspiracy on Feb. 18 and Jan. 20.
A related indictment in federal court in New York charged four securities traders, including Korchevsky, who pleaded not guilty in August and was released after posting $2 million bail.
The next hearing in Korchevsky's case is set for August in Brooklyn, according to Nellin Macintosh, spokeswoman for the Eastern District of New York.
Currently, Korchevsky is under house arrest, but has been allowed to travel to religious conferences, according to court documents.
Korchevsky, who had a long career as a portfolio manager and mutual-fund manager, served as pastor of the Slavic Baptist Church in Brookhaven.