The trio was charged with computer fraud, conspiracy and identity theft after an alleged " hack, pump and dump " plot to drive up share prices, which cost one brokerage firm at least US$2 million in losses.
The three suspected hackers are Jaisankar Marimuthu, 32, Thirugnanam Ramanathan, 34 and Chockalingam Ramanathan, 33. Two of the men were arrested in Hong Kong last week, while Chockalingam Ramanathan is still at large, according to a DOJ news release.
The group allegedly coordinated the scam from Thailand and India, and bought the stocks with accounts under their real names. They then used stolen identities to pose as other online traders and purchased the shares at inflated prices, driving the value of their stock up.
The trio then sold their own shares at an exaggerated price during a four-month spree last year, according to the department.
One of the companies targeted was Louisville, Citizens Financial Corp. The trio allegedly bought about 5,500 shares of the firm's stock using their own accounts, then used a hijacked account to purchase 53,600 more shares, according to a report today in the Louisville Courier-Journal.
This is the first time that individuals suspected of hacking into and defrauding US based online brokerage firms have been seized overseas, according to the Justice Department.
"This case demonstrates our commitment to aggressively investigate and prosecute these schemes wherever they originate," said assistant attorney general Alice Fisher in a press release. "These new forms of high-tech identity and securities fraud pose serious risks to investors and brokerage firms across the globe."
The Securities and Exchange Commission has filed civil charges against the men, claiming they made profits of more than US$121,500. Federal authorities are seeking the extradition of the detained men to face charges.
Indian trio charged with hacking, pump-and-dump stock scam
By Fiona Raisbeck on Mar 14, 2007 7:26AM