Decoding the credit card hacking ring

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: As an international ring of thieves plundered the credit card numbers of millions of Americans, investigators struggled to figure out who was orchestrating the crimes in the US.

When prosecutors unveiled indictments last week, they made a stunning admission: The culprit was, they said, their very own informant.

Albert Gonzalez, 27, appeared to be a reformed hacker. To avoid prison time after being arrested in 2003, he had been helping federal agents identify his former cohorts in the online underworld where credit and debit card numbers are stolen, bought and sold.

But on the sly, federal officials now say, Gonzalez was connecting with those same cohorts and continuing to ply his trade, using online pseudonyms—including ‘soupnazi’—that would be his undoing. As they tell it, Gonzalez had a central role in a loosely organised online crime syndicate that obtained tens of millions of credit and debit card numbers from nine of the biggest retailers in the US.

The indictments last week of 11 people involved in the group give a remarkably comprehensive picture of how the Internet is enabling new kinds of financial crimes on a vast international scale.

In interviews over the last few days, investigators detailed how they tracked Gonzalez and other members of a ring that extended from Ukraine, where a key figure bought and sold stolen numbers over the Internet, to Estonia, where a hacker infiltrated the servers of a Dallas-based restaurant chain. The criminals stored much of their data on computer servers in Latvia and Ukraine, and purchased blank debit and credit cards from confederates in China, which they imprinted with some of the stolen numbers for use in cash machines, investigators say.

“This was the largest hacking and theft of credit and debit card information ever successfully investigated and prosecuted within the US,” said Craig Magaw, special agent in charge of the Secret Service’s criminal investigative division. “This case shows that there are no more boundaries.”

Gonzalez’s lawyer, Rene Palomino Jr, disputes the charges and says his client is merely a ‘kid’ who lived with church-going parents before starting work as a government informant. Palomino said the indictment “represents serious and substantial legal and factual challenges for the government to prove at trial.”