Beginning in late 2010, Murmylyuk (aka, “Dmitry Tokar”) worked with others to steal from online trading accounts operated by Scottrade, E*Trade, Fidelity, Schwab, and other brokerage firms, according to the criminal complaint.
Members of the ring first gained unauthorized access to the online accounts and then changed the phone numbers and e-mail addresses. Once the hackers controlled the accounts, they used stolen identities to open additional accounts at other brokerage houses, the US Attorney’s Office explained in a release.
In one version of the fraud, ring members caused the victims’ accounts to sell options contracts to the profit accounts, then to purchase the same contracts back minutes later for up to nine times the price. In another version, they used the profit accounts to offer short sales of securities at prices well over market price and to force the victim accounts to make irrational purchases, the release said.
Murmylyuk, who lived in Brooklyn, and a conspirator recruited foreign nationals visiting, studying, and living in the US – including Russian nationals and Houston residents Anton Mezentsev, Galina Korelina, Mikhail Shatov, and others – to open bank accounts into which illegal proceeds could be deposited. Murmylyuk and the conspirator then transferred the proceeds of the sham trades into those accounts, where the stolen money could be withdrawn.
Fidelity, Scottrade, E*Trade, and Schwab have reported combined losses to date of approximately $1 million as a result of the fraudulent schemes.
If convicted, Murmylyuk faces a maximum potential penalty of five years in prison and a $250,000 fine.
The Securities and Exchange Commission is also filing a parallel civil action. Murmylyuk is currently in state custody facing charges arising out of a separate investigation conducted by the Manhattan District Attorney’s Office.