COURT DOC: Man Pleads Guilty to Conspiracy to Sell Stolen Financial Information on Dark Web

“An Illinois man pleaded guilty yesterday to leading a conspiracy to sell stolen financial information on the dark web, aka darknet.”

“According to court documents, Michael D. Mihalo, aka Dale Michael Mihalo Jr., 40, of Naperville, was the founder of a darknet ‘carding‘ site called Skynet Market, which was used to sell stolen financial information on the internet. Operating under the moniker ggmccloud1, Mihalo and his co-conspirators were also prominent vendors on additional darknet markets, including AlphaBay Market, Wall Street Market, and Hansa Market. Each market required users to conduct transactions in digital currencies, including Bitcoin. Through these markets, Mihalo and his co-conspirators sold the stolen financial information, primarily the credit and debit card numbers and associated information, of tens of thousands of U.S. victims between Feb. 22, 2016, and Oct. 1, 2019.”

“Mihalo assembled and directed the team that helped him sell this stolen financial information on the darknet. Each of the co-conspirators benefitted from the trusted reputation Mihalo, as ggmccloud1, had built on the darknet sites to sell more stolen financial information than they would have been able to sell individually. Taylor Ross Staats, 40, of Texas, conspired with Mihalo and others to sell stolen financial information on the internet. Staats served as a ‘card-checker,’ who ensured the financial information sold by Mihalo and others on multiple darknet sites remained active and had not been canceled by the relevant financial institutions. Staats personally earned at least $21,000 worth of Bitcoin for these services.”

“Mihalo personally possessed, sent, and received the information associated with 49,084 stolen payment cards with the intent that the payment card information would be trafficked on darknet sites, all in furtherance of the conspiracy. Mihalo earned at least $1 million worth of cryptocurrencies at the time of the sales, including Bitcoin, Ethereum, and Monero. These funds have significantly appreciated since that time.”

“Mihalo pleaded guilty to one count of conspiracy to commit access device fraud, one count of access device fraud, and six counts of money laundering. He will be sentenced on a later date. He faces a maximum penalty of five years in prison for the conspiracy count and a maximum penalty of 10 years in prison on each of the remaining counts. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.”

“Under the terms of his plea agreement, Mihalo must also forfeit to the government any property he personally obtained through the offenses, including several million dollars’ worth of cryptocurrency, financial accounts, and real property, and has agreed to entry of a money judgment of an amount to be determined by the judge at sentencing.”

“Mihalo is the second defendant to plead guilty in this case. Staats pleaded guilty on Dec. 14, 2022, to one count of conspiracy to commit access device fraud in connection with his role as ‘card-checker’ for Mihalo and the other co-conspirators. He faces a maximum penalty of five years in prison for the conspiracy count and will be sentenced on a later date.” (Source: U.S. Department of Justice)