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COURT DOC: USA v. Vytautas Parfionovas

March 9, 2018

A criminal complaint was unsealed today in federal court in Brooklyn charging Lithuanian national Vytautas Parfionovas with computer intrusion, securities fraud, money laundering, bank fraud and wire fraud, among other offenses. The charged crimes stem from a variety of criminal conduct between 2011 and 2018 in which Parfionovas gained access to U.S.-based computers, including email servers and computers belonging to U.S. financial institutions, in order to steal money from online bank accounts and securities brokerage accounts. Parfinovas was arrested in Ukraine on October 24, 2019, and was extradited to the United States on November 21, 2019.

In one part of the scheme, Parfionovas and his co-conspirators allegedly obtained login information for victims securities brokerage accounts through various methods, including stealing that information from the server of a U.S. securities order management company to which the conspirators gained unauthorized access. The conspirators then used those accounts to steal money and conduct trades to their own benefit. Initially, conspirators accessed the victim brokerage accounts and transferred money from those accounts to other accounts under their control. After financial institutions began to block those unauthorized transfers, Parfionovas and his co-conspirators accessed other victim brokerage accounts without authorization, and placed unauthorized stock trades within those accounts while simultaneously trading profitably in the same stocks from accounts that they controlled. On or about February 22, 2016, Parfionovas explained this aspect of the scheme to a co-conspirator as follows: ‘I take some fraud logins. Do some s[_]t with stock . . . sometimes 2-3 in day . . . manipulation is 100%.’ In this manner, Parfionovas and his co-conspirators realized financial gains while causing losses of more than $5.5 million.

In another part of the scheme, Parfionovas and his co-conspirators allegedly obtained login information for victim email accounts and accessed those accounts without authorization. The conspirators then sent email messages from those accounts to the victims financial advisers and requested wire transfers from the victims financial institutions to overseas bank accounts that the conspirators controlled. For example, in or about May 2013, Parfionovas and his co-conspirators obtained $50,000 from an investment account that belonged to U.S. victims, and Parfionovas directed the transfer of those funds to a series of bank accounts and ultimately to an individual in Kharkov, Ukraine, where Parfionovas was located. To defraud another victim, Parfionovas and his co-conspirators obtained control over a victims email account and used it to send written instructions which falsely appeared to have been signed by the victim to transfer $225,000 from one of the victims accounts. (U.S. Department of Justice)

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