Hackers bought StubHub tickets with stolen accounts

Bryan Captuo (left) and Daniel Petryszyn (right) seated Bryan Captuo (left) and Daniel Petryszyn (right) seated in the courtroom during their arraignment as Manhattan District Attorney Cyrus Vance announced arrests and criminal charges in the StubHub intrusion case spanning from Russia to New York, Wednesday, July 23, 2014. Photo Credit: Bryan Smith

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Investigators broke up an international hacking ring that penetrated the computer system of StubHub LLC and racked up $1.6 million in fraudulent tickets sales for concerts and sporting events, officials said Wednesday.

Six people, including three from Russia, were named in a money-laundering and grand-larceny indictment unsealed Wednesday in criminal court in Manhattan. One of the Russian suspects, Vadim Polyakov, 30, was captured in Spain, where he was vacationing, Manhattan District Attorney Cyrus Vance Jr. said. Polyakov will face extradition proceedings in Spain, Vance said.

However, two other Russian suspects, Nikolay Matveychuk, 31, and Serge Kirin, 37, remain out of the reach of U.S. law enforcement for now because of a lack of extradition procedures with Russia, officials said.

The scam was discovered in March 2013 by online e-ticket seller StubHub and was immediately reported to law enforcement, Vance said. The company discovered accounts of about 1,000 legitimate customers from all over the United States had been compromised and used to purchase tickets without their knowledge, he said. About 3,500 tickets were purchased through the scam for concerts, Yankees baseball games, and Giants and Jets football games, investigators said.

But while StubHub put new security measures in place, the suspects were able to circumvent them and continue to fraudulently access accounts of 1,600 customers, officials said. Investigators said they traced money paid for the tickets to PayPal, bank and other financial accounts controlled by the suspects.

Vance acknowledged that it wasn't clear how the hackers got into the StubHub system, but once they did they exploited the breach repeatedly.

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A StubHub official in a statement applauded the indictments. "Cyber crime is everywhere and it doesn't matter what your economic status is," Vance said at a news conference with officials from the Royal Canadian Mounted Police, U.S. Secret Service and NYPD who were involved in the probe.

Two suspects, Daniel Petrysyn, 28, of New York City, and Bryan Caputo, 29, of Hudson County, New Jersey, pleaded not guilty at their arraignments, where bail was set at $2 million and $500,000, respectively, a Vance spokeswoman said.

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