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Prison time for cyber stock swindler
Kevin Poulsen, SecurityFocus 2004-05-06

A young investor with more wiles than trading luck was sentenced to 13 months in prison Wednesday for using a Trojan horse program and someone else's online brokerage account to sell thousands of worthless stock options to an unwilling buyer.

Van T. Dinh, 20, was the first to be charged by the Securities and Exchange Commission with a fraud involving both computer hacking and identity theft, according to the SEC.

According to court records, last July, the then-teenaged Dinh was the unhappy owner of $90,000 in "put" options that could have delivered a hefty payoff if Cisco Systems Inc. stock drooped below $15.00 a share, but instead were close to expiring worthless.

Rather than eat the loss, Dinh constructed an electronic shell game to offload the contracts on a innocent dupe. Dinh built a list of targets by posting innocuous queries as "Stanley Hirsch" to a public forum on the trading discussion site stockcharts.com, and noting the e-mail addresses of people who responded. The next day, using the alias "Tony T. Riechert," he spammed those addresses with an offer to participate in a beta test of a new stock charting tool.

The "stock charting tool" turned out to be a Trojan horse called "the Beast." An unsuspecting Westborough, Massachusetts investor -- unnamed in the complaints -- ran the program, and sometime thereafter accessed his online brokerage account with TD Waterhouse, while the Beast silently logged every keystroke. Dinh allegedly swept in later and downloaded the logs, obtaining the man's username and password.

A few days later, Dinh put his Cisco options up for sale at an inflated price through his own online broker, then used the purloined password to place a series of matching buy orders through the victim's account, "depleting almost all of the account's available cash," according to the SEC-- approximately $47,000.

With the account drained, Dinh remained stuck with some of the Cisco contracts, which expired worthless on July 19th. But the scheme shaved his losses by $37,000 -- the victim's $47,000, minus the broker's commission.

Dinh pleaded guilty in a federal court in Massachusetts to unauthorized access to a protected computer and securities fraud last February, and repaid the victim's lost $47,000. At his sentencing hearing Wednesday, prosecutors say they read aloud from an electronic diary purportedly found on Dinh's computer, including an entry dated a month before the crime.

"I am so proud of myself for my 'hacking business' -- I will never regret what I did," Dinh allegedly wrote. "I am the best of the best Trickster. I laugh often when mom says she worries -- what the [expletive] do you have to worry about. Even if I go to jail -- big deal -- I will learn something there. Hahaha."

Phone calls to Dinh's home and his attorney's office were not returned Thursday.


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Prison time for cyber stock swindler 2004-05-07
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