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In 1994, in the American firm Citibank,
large sums of money
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started mysteriously disappearing
from clients' accounts.
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A resultant investigation revealed
that a computer located in Russia
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was used to break into
the Citibank systems.
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The idea of robbing banks from a distance
revolutionized the criminal world.
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In this series, we will tell you
about Russian hackers' very first crimes,
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after which the whole world started
talking about them.
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RUSSIAN HACKERS: BEGINNING
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A DOCUMENTARY BY ANDREY LOSHAK
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EPISODE ONE
THE PIONEERS
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NEW YORK, USA
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Steven Garfinkel, an FBI agent,
was assigned to investigate the case
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of the suspicious transactions
that took place in Citibank.
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Banking fraud was his specialization,
but he had never encountered anything
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like this before.
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There was no
computer crime squad in the FBI.
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STEVE GARFINKEL
FBI SPECIAL AGENT
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There was no cyber division.
It was a totally different world.
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And in many respects,
this was an entirely new crime.
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It was a…
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a cyber bank robbery.
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VARNA, BULGARIA
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The first penetration into Citibank's
systems was by a hacker called ArkanoiD.
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In the beginning of the 1990s,
he was a member
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of an early group in Saint Petersburg
who had romanticized hacking;
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who hacked security systems
out of curiosity,
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but not for money.
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Back then…
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ALEXEY SMIRNOV A.K.A. ARKANOID
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…it was purely noncommercial.
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It was just a hobby.
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Is this why…
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ANDREY LOSHAK
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…after breaking
through Citibank's security,
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you didn't try to rob it right away?
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Essentially, yes. It was basically
a part of our culture.
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Doing this for profit was considered
something unusual
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and contradicted the traditional concepts
of hacker ethics.
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Even if we don't focus on the related
ethical problems,
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such as "stealing is bad",
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the very idea of theft by technological
means in the 1990s in Russia,
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was connected to dealing with some
very unpleasant people.
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And I never wanted
to do such a thing at all.
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Do you mean that you
would have to find a way
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to convert the electronic
funds to real cash?
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Yeah, right.
And everything associated with doing this.
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Back then, there were two global
computer networks in the world:
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the Internet and the X.25 protocol,
which was used by Citibank.
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X.25 access in Russia was provided
by an American company called Sprintnet.
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To enter the network, you needed to call
the number of the provider's local hub
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using your modem,
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and enter a special command
into the terminal dialog box.
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Via the Sprintnet connection, ArkanoiD
and his friend broke into
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Citibank's network and discovered
many flaws.
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Later on, a detailed guide for using
the vulnerabilities found by the hackers
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was obtained by Vladimir Levin,
an unremarkable computer
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and accounting software trader
from Saint Petersburg.
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One of the members of our group
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sold it to him for the
ridiculous sum of $100.
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He sold it because he thought that Levin
wasn't bright enough,
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and he didn't expect Levin to resort
to methods we wouldn't like.
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Why didn't he consider him bright enough?
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Levin never was a hacker.
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He never explored anything on his own.
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He was just a run-of-the-mill trader
with a small hardware business.
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He showed some moderate interest,
but that was all.
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Having entered Citibank's
cash management system
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on his office computer,
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Levin randomly selected a few
major accountholders
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and transferred around $500,000
to the account of his friend in Helsinki.
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He managed to convert
these funds to real cash.
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Levin needed mules: people who helped
to turn the hacker-stolen funds into cash.
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FORT LAUDERDALE, FLORIDA, USA
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In the beginning of the 1990s,
Yekaterina got lucky:
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she met a prince
in a Mercedes named Evgeny.
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The couple had a daughter.
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However, in the lawless
Saint Petersburg of the 1990s,
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their happiness ended quickly.
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Evgeny amassed debts.
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Evgeny started
walking around with a gun in his pocket.
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Some shady people…
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YEKATERINA KOROLKOVA
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…started coming to our dacha.
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We kept on guard all the time;
we were in fear.
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He used to say, "We owe this sum of money,
we have to give it back."
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EVGENY KOROLKOV
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Well…
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Anyone willing to buy this house?
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I can give you a good price.
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DEDOVICHI, PSKOV OBLAST
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Evgeny Korolkov no longer has
an apartment in San Francisco.
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The former businessman lives
in a village with his grandson.
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In the summer of 1994, Korolkov's
acquaintance, Vladimir Levin,
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contacted him with a confidential request:
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to help him convert, or "encash" the money
stolen from the Citibank accounts.
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Korolkov's wife Yekaterina
unexpectedly volunteered for the job.
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I had a clear and detailed conversation
with my wife.
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Like any woman, she said,
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"You are a loser. You can do nothing."
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I didn't have an opportunity to do that.
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I said, "I would be happy to grant you
this opportunity."
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Take this money.
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Take this plane ticket.
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Go!
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"What do I do?"
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I said, "Open accounts in five banks
and wait for the money to get there."
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Then withdraw it, and you can go
wherever you like.
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Why did she need so many accounts?
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She wanted a million right away.
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I told her, "We can send you a trillion
if you like.
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But how are you going to withdraw it?"
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I thought it would be wiser for me to go.
He tried to talk me out of this.
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But I said that we had no other choice.
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We had to pay our debts.
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You were aware that
you were doing something illegal?
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Absolutely!
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Absolutely! And I was absolutely sure
that I wasn't going to get caught.
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"Do you think you can just go
and withdraw money,
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knowing it's not yours?"
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No, I don't think I can.
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That's my point.
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She thought it would be a piece of cake
to come and withdraw money.
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That is my point.
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Purely psychologically,
people don't understand,
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"How can this be? I have this money.
It was sent to me, but I can't take it."
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But you can't.
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SAN FRANCISCO, 1994
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The money came. A translator and I
went to withdraw that money.
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When I recall that time,
it was such a nightmare.
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But it was just me. It was just
unforgivable stupidity.
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I went in and I said,
"Give me $30,000 in cash."
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They were looking at me
with their eyes wide open,
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because at that time, you could buy
a house for $30,000.
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The bank sees these transfers,
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knows they're bad,
and they contact the banks to say,
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"Hey, these are bad transactions,
put a freeze on them."
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Katerina Korolkova is in the branch
trying to withdraw the money.
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They refused to give the money to us.
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A security officer approaches us.
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He leads us into a room. I was surprised
we weren't arrested right away.
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I was really surprised.
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He talked to us. We explained
that we were expecting some money
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from my husband.
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He let us go.
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We left.
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On Monday, I was packing suitcases
for a flight.
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There comes a knock on my door.
It's the FBI.
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And then they take me
to the Federal Prison near San Francisco.
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That was my trip to America,
to San Francisco in 1994. Yes.
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We knew about Levin from Katya.
Katya told us about Levin.
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The extent of how he was doing it,
what he was doing,
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we didn't fully, you know, understand yet
how he was doing this.
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There's another very important
component to this story,
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which is the cooperation between
the FBI and the Russian authorities.
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When you look back on this,
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you look at, you know,
Russian-US relations today
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and I don't think
this sort of thing could happen.
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SAINT PETERSBURG
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The FBI asked for help
in the Organized Crime Department.
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The case was assigned
to Investigator Strigalyov.
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He found the offenders' address quickly
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since a simple telephone modem
was used to hack Citibank's system.
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It was easy to trace.
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We discovered that that number belonged…
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BORIS STRIGALYOV, INVESTIGATOR
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…to a company in Saint Petersburg.
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The company's name was Saturn.
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The company's address was
8 Malaya Morskaya Street,
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formerly Gogol Street.
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Surveillance helped us locate
the owner of the company:
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Vladimir Levin,
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a very advanced computer specialist.
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Vladimir Levin was detained quite quickly.
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In the fall of 1994, he was careless
enough to fly to London on business
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where he was detained
at the FBI's request.
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This footage shot by British
television features Levin
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surrounded by his lawyers.
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Unfortunately, the original footage
was lost.
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We had to make an inverse translation
from English into Russian.
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We asked Levin
whether he was guilty of this crime.
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It is not the time
to answer this question,
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I would have to answer it
in America in front of the Jury.
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From the papers that I saw
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and accusations that I read I could say
that I'm not guilty whatsoever.
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If I'm extradited to America
of course I may be put on trial,
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but all I can say is that I'm not guilty,
and this is total rubbish.
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While Levin was in a London prison
fighting extradition to the USA,
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in Saint Petersburg, the investigative
team headed by Strigalyov
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searched the Saturn offices,
where they found computers and weapons.
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We get authority to fly
to Saint Petersburg.
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We meet with the Russian police
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and we're in the offices at…
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MVD headquarters in Saint Petersburg.
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I just had a feeling this was
kind of a seminal moment
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in the evolution of… you know, of crime.
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So, I met with the Russian cops and…
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we are going through these materials
on the computer and boom,
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we find a smoking gun.
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There are Citi bank documents
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from the cash management system
on Levin's computer.
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So, this is… this is it, man,
we have him dead to rise at this time.
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They arrived in a quite short time
after the case was opened
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the office was searched and all.
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Two FBI officers.
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We allowed them to copy
the digital information
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we found on the computer.
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We communicated and aligned our efforts.
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And they left.
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The MVD cops saw we were
very excited about this
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and it was a cause for a celebration.
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It was 11:00 in the morning,
the first bottle of vodka comes out.
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We finish the bottle,
two more bottles come out.
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You know, I was a lot younger then and
I guess my body can process it but man,
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I will tell you I have never in my life…
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00:13:02,968 --> 00:13:06,120
been as drunk as I was that day.
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00:13:06,200 --> 00:13:10,410
First of all we started pickles
and it's pickle juice and a vodka.
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Chocolate bar and the vodka,
and then somebody says,
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"Oh, very special, very special."
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Opens a can of tomatoes.
220
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I can actually understand that.
That was almost like a Bloody Mary.
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Is "oguschenya" a word?
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00:13:25,013 --> 00:13:26,360
- What?
- Oguschenya.
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00:13:26,440 --> 00:13:27,494
- Like, snacks.
- Yes.
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Oguschenya, yeah. Oguschenya.
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If you recall, at that time our
relationship with the USA was improving.
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It was quite favorable.
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As a matter of fact,
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law enforcement officers
always have mutual respect
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because, obviously,
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there was nothing political about this,
it was a purely criminal case.
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We clearly had to unite forces.
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Steve Garfinkel needed testimony
against Levin,
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00:14:03,500 --> 00:14:06,302
who didn't admit his guilt and fought
being extradited.
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00:14:06,701 --> 00:14:08,651
Evgeny Korolkov was the one to give it.
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00:14:08,731 --> 00:14:12,504
Garfunkel convinced him to come
to America with his daughter
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00:14:12,584 --> 00:14:14,790
and voluntarily surrender
to the authorities.
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00:14:14,870 --> 00:14:18,853
Why did you go to America
after Levin was arrested?
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00:14:19,790 --> 00:14:21,430
What choice did I have?
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00:14:21,510 --> 00:14:24,610
Should I have gone to the Soviet prison?
To the Russian prison?
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00:14:26,670 --> 00:14:30,790
I had had a civilized negotiation
underway with them.
241
00:14:30,870 --> 00:14:36,622
I took Katya, got a visa in Moscow.
242
00:14:37,910 --> 00:14:39,670
From Moscow, without any rush,
243
00:14:40,710 --> 00:14:42,053
on March 8th,
244
00:14:43,528 --> 00:14:45,630
1995,
245
00:14:45,710 --> 00:14:48,000
I flew to New York City.
246
00:14:49,911 --> 00:14:53,573
- And I was arrested there.
- You turned yourself in.
247
00:14:55,830 --> 00:14:59,150
They told me that if I cooperated
with the investigators,
248
00:14:59,230 --> 00:15:01,710
they would let me go.
249
00:15:01,790 --> 00:15:03,510
And they would let him go.
250
00:15:03,590 --> 00:15:08,150
On top of that, they would let us stay
in the USA.
251
00:15:08,230 --> 00:15:11,550
When they told me that they would
let me stay in the USA
252
00:15:11,630 --> 00:15:13,230
and bring my kid here,
253
00:15:13,310 --> 00:15:15,950
it made me really happy.
254
00:15:16,030 --> 00:15:17,070
Who are "they"?
255
00:15:17,150 --> 00:15:18,430
The FBI.
256
00:15:18,510 --> 00:15:20,222
They gave us money.
257
00:15:20,960 --> 00:15:22,590
$4,000.
258
00:15:22,670 --> 00:15:25,448
And they rented an apartment for us.
259
00:15:26,990 --> 00:15:32,260
I always thought
Korolkov spoke with us at length.
260
00:15:32,340 --> 00:15:34,340
The central story is that
261
00:15:34,420 --> 00:15:38,977
he was associated with these gangsters
262
00:15:39,057 --> 00:15:41,546
in St. Petersburg.
263
00:15:42,630 --> 00:15:44,150
SAINT PETERSBURG
264
00:15:44,230 --> 00:15:47,950
Korolkov's testimony led to
another suspect, Damir Shadaev,
265
00:15:48,030 --> 00:15:52,288
a respected entrepreneur, a timber agent,
later a State Duma deputy
266
00:15:52,368 --> 00:15:55,780
from the Leningrad Oblast Legislative
Assembly, an LDPR party member.
267
00:15:55,860 --> 00:16:00,150
According to the FBI data, Shadaev
helped encash around $4,000
268
00:16:00,230 --> 00:16:01,555
stolen from Citibank.
269
00:16:02,746 --> 00:16:04,560
Shadaev needed money.
270
00:16:05,230 --> 00:16:08,950
He wanted his commission.
Levin wasn't giving money away for free.
271
00:16:09,030 --> 00:16:13,617
Nor was I giving away that money for free.
272
00:16:15,110 --> 00:16:19,590
Just try to send someone to encash money
for free.
273
00:16:19,670 --> 00:16:23,110
He was to give 50% back.
274
00:16:24,080 --> 00:16:27,808
Then we come to interview Shadayev.
275
00:16:27,888 --> 00:16:30,238
First of all, we heard him
coming down the hall,
276
00:16:30,318 --> 00:16:32,171
and he's yakking it up with the cops.
277
00:16:32,251 --> 00:16:34,351
You know, they're all laughing,
"ha-ha-ha,"
278
00:16:34,730 --> 00:16:39,520
and apparently,
he took his gun and holster off
279
00:16:39,600 --> 00:16:42,900
and gave it to the cops before
he came, you know, to see me.
280
00:16:42,980 --> 00:16:47,555
It was kind of clear that whoever
Shadayev was friendly with,
281
00:16:47,635 --> 00:16:52,453
he didn't have to worry about,
you know, anything from the authorities.
282
00:16:53,510 --> 00:16:57,590
According to the case files, $73,000
stolen from Citibank
283
00:16:57,670 --> 00:17:01,830
was spent on buying weapons in a Finnish
hunting store.
284
00:17:01,910 --> 00:17:05,671
Later on, some of that weaponry
was found in Shadaev's estate near Vyborg.
285
00:17:06,710 --> 00:17:09,866
They were to confiscate these weapons.
286
00:17:09,946 --> 00:17:12,195
I don't know what they confiscated.
287
00:17:13,030 --> 00:17:16,106
Can you imagine the amount of weapons
288
00:17:16,186 --> 00:17:20,248
you could buy for around $70,000?
289
00:17:21,030 --> 00:17:26,960
He was the first to buy a 17-round Glock.
290
00:17:27,040 --> 00:17:30,471
I was the second to import
the second one to Russia.
291
00:17:31,110 --> 00:17:32,990
I had a 19-round one.
292
00:17:34,990 --> 00:17:37,395
We showed off to impress each other.
293
00:17:39,390 --> 00:17:45,511
But Shadaev was the first to wear
a Sheik's Cartier watch.
294
00:17:46,960 --> 00:17:49,066
A $60,000 watch.
295
00:17:51,030 --> 00:17:53,120
And he wasn't afraid of wearing it.
296
00:17:55,510 --> 00:17:58,910
In Saint Petersburg, Shadaev is infamous
for scaring off journalists.
297
00:17:59,110 --> 00:18:03,350
In 2008, a film crew from
Channel 100 tried to go to the island
298
00:18:03,430 --> 00:18:07,710
where Shadaev had built an estate,
having unlawfully seized a riverbank.
299
00:18:07,790 --> 00:18:09,890
They had to go back without their cameras.
300
00:18:10,595 --> 00:18:12,730
For some reason, Shadaev wasn't there…
301
00:18:12,810 --> 00:18:14,317
ALEXANDER TROFIMOV, JOURNALIST
302
00:18:14,397 --> 00:18:16,630
…when we came to shoot. He wasn't around.
303
00:18:16,710 --> 00:18:19,750
Suddenly we saw him rushing toward us
on his motor dinghy,
304
00:18:19,830 --> 00:18:23,271
all enraged and agitated.
305
00:18:24,830 --> 00:18:26,790
He came up and greeted us.
306
00:18:26,870 --> 00:18:29,057
He grabbed the camera and the stand
307
00:18:29,542 --> 00:18:31,946
that our camera operator didn't guard
well enough
308
00:18:32,026 --> 00:18:34,293
and he threw the equipment into the river.
309
00:18:35,555 --> 00:18:40,710
At that time, we felt the merciless
1990s vibe.
310
00:18:40,790 --> 00:18:42,231
Thank God we weren't killed.
311
00:18:50,912 --> 00:18:54,320
The richest deputy in the Leningrad Oblast
Legislative Assembly lives
312
00:18:54,400 --> 00:18:56,200
lives on his own island near Vyborg.
313
00:18:57,555 --> 00:18:59,870
Knowing Damir Shadaev's dislike
for the press,
314
00:18:59,950 --> 00:19:02,977
nevertheless, we risked going
to the gates of his estate.
315
00:19:07,280 --> 00:19:08,791
Hello! Speak!
316
00:19:08,871 --> 00:19:11,670
We would like to talk to Mr. Shadaev.
317
00:19:11,750 --> 00:19:13,413
We can't reach him on the phone.
318
00:19:15,155 --> 00:19:16,990
Whom do I tell him is calling?
319
00:19:17,070 --> 00:19:22,510
Please, tell him that we are journalists
from Moscow.
320
00:19:22,590 --> 00:19:27,608
We are making a film
about Vladimir Levin's case.
321
00:19:28,910 --> 00:19:33,457
Okay, I'll call Mr. Shadaev now
and relate whatever he says to you.
322
00:20:02,500 --> 00:20:03,457
Hello!
323
00:20:03,637 --> 00:20:04,599
Hello, Mr. Shadaev.
324
00:20:04,679 --> 00:20:08,114
Your name is mentioned in Levin's case.
325
00:20:08,194 --> 00:20:11,053
Could you please explain
why your name is mentioned there?
326
00:20:11,133 --> 00:20:12,436
DAMIR SHADAEV, BUSINESSMAN
327
00:20:12,516 --> 00:20:14,620
I've never seen or known Levin in my life.
328
00:20:14,700 --> 00:20:18,586
In this case, there was my comrade,
Evgeny Korolkov.
329
00:20:19,430 --> 00:20:21,430
He wasn't much of a comrade, though.
330
00:20:21,510 --> 00:20:23,570
He was a man who bought hardware from us.
331
00:20:23,650 --> 00:20:25,856
He bought equipment.
We sold goods back then.
332
00:20:25,936 --> 00:20:27,892
He amassed a great debt to us. He fled.
333
00:20:27,972 --> 00:20:30,784
He came back and said,
"I'll give everything back to you.
334
00:20:30,864 --> 00:20:34,665
Give me the number of a bank account.
I will send you the money." And he did.
335
00:20:34,745 --> 00:20:35,846
"I will be all right."
336
00:20:35,926 --> 00:20:39,482
Then some police officers came to me
and said that the money was stolen.
337
00:20:39,562 --> 00:20:41,318
I spent a couple of months in jail.
338
00:20:41,398 --> 00:20:43,750
It was the money from Citibank.
339
00:20:43,830 --> 00:20:47,280
I don't know whether it was only
from Citibank or from any other bank.
340
00:20:47,910 --> 00:20:51,960
After two months, they investigated it and
said, "We are sorry. You are innocent."
341
00:20:52,590 --> 00:20:53,750
That is how it ended.
342
00:20:53,830 --> 00:20:58,350
Investigator Strigalyov mentioned
a weapon consignment
343
00:20:58,430 --> 00:21:01,030
bought in Finnish hunting stores.
344
00:21:01,110 --> 00:21:04,750
I buy weapons in many countries
of the world where I have been
345
00:21:04,830 --> 00:21:06,270
because I go hunting.
346
00:21:06,350 --> 00:21:09,753
I have a license for collecting weapons,
for using weapons.
347
00:21:09,833 --> 00:21:12,384
For some reason, it became a part
of the case files.
348
00:21:12,464 --> 00:21:17,230
Well, yeah. They came here
and confiscated all my weapons.
349
00:21:17,310 --> 00:21:20,190
They believed that they were bought
with Citibank money.
350
00:21:20,270 --> 00:21:22,590
I have always bought weapons
with my own money.
351
00:21:22,670 --> 00:21:24,390
I buy food with my own money.
352
00:21:24,470 --> 00:21:26,640
I buy clothes with my own money.
353
00:21:26,720 --> 00:21:31,270
If they had had any suspicions that
these were bought with stolen money,
354
00:21:31,389 --> 00:21:33,295
I think they would have taken it away.
355
00:21:33,375 --> 00:21:35,420
They gave everything back. Of course!
356
00:21:39,217 --> 00:21:42,373
What is this? Did you smell something?
A squirrel?
357
00:21:46,390 --> 00:21:50,030
Shadaev blamed Korolkov.
358
00:21:50,110 --> 00:21:51,470
"He owed me.
359
00:21:51,550 --> 00:21:54,630
"He came and said that he could
repay the debt.
360
00:21:54,710 --> 00:21:57,324
"I will pay you back by a money transfer."
361
00:21:58,510 --> 00:22:02,017
I think this is partly the truth.
362
00:22:02,670 --> 00:22:08,266
But he was definitely aware
that the money was stolen.
363
00:22:08,346 --> 00:22:09,213
THE LDPR PARTY
364
00:22:09,293 --> 00:22:12,409
He went to jail for 30 days
and served the rest of the sentence
365
00:22:12,489 --> 00:22:13,789
under travel restrictions.
366
00:22:14,408 --> 00:22:17,030
Then he was in a hospital.
367
00:22:17,110 --> 00:22:20,670
He did all he could to avoid prison.
368
00:22:20,750 --> 00:22:24,186
And later on, at the end of the 1990s,
369
00:22:26,568 --> 00:22:28,830
he participated in a deputy election.
370
00:22:28,910 --> 00:22:35,070
I think he even ran for the governor
of Leningrad Oblast or something.
371
00:22:35,150 --> 00:22:40,515
Which also helped him get out of this.
372
00:22:41,750 --> 00:22:43,950
To sweep the case under the carpet?
373
00:22:44,030 --> 00:22:46,951
To stop the prosecution against him.
374
00:22:47,706 --> 00:22:49,590
We didn't have enough evidence.
375
00:22:51,070 --> 00:22:54,510
We know very little
about the main player in this story.
376
00:22:55,271 --> 00:22:57,990
He always tried not to draw extra
attention to himself.
377
00:22:58,070 --> 00:23:00,770
He says that he got involved in this story
by accident.
378
00:23:01,430 --> 00:23:02,355
I don't know.
379
00:23:03,030 --> 00:23:06,580
Even my lawyer said that I don't look
like a man who has a lot of money.
380
00:23:07,770 --> 00:23:09,770
Especially ten millions dollars.
381
00:23:13,502 --> 00:23:15,855
Garfinkel managed to convince
the British court
382
00:23:15,935 --> 00:23:19,019
that Levin was the main organizer
of the Citibank robbery.
383
00:23:19,099 --> 00:23:22,456
He was extradited to the USA,
where the young man admitted his guilt
384
00:23:22,536 --> 00:23:25,687
got a three-year sentence and was soon
released as he had served
385
00:23:25,767 --> 00:23:28,480
almost the entire sentence
during the investigation.
386
00:23:28,630 --> 00:23:31,010
He didn't look like a real
criminal mastermind,
387
00:23:31,090 --> 00:23:34,915
but more like a computer geek who…
388
00:23:35,648 --> 00:23:38,110
you know, he found out
about this kind of backdoor
389
00:23:38,190 --> 00:23:41,860
into the Citi financial
cash management system.
390
00:23:41,940 --> 00:23:45,662
So, he really didn't kind of impress me.
391
00:23:46,524 --> 00:23:49,339
And he certainly wasn't,
you know, trying to.
392
00:23:49,419 --> 00:23:52,962
He was just trying to, like,
you know, say as little as he could to us
393
00:23:53,042 --> 00:23:55,035
just to get this thing, you know…
394
00:23:55,115 --> 00:23:57,521
I think, you know,
get it over with and done with
395
00:23:57,601 --> 00:24:00,135
and then get the hell,
you know, out of the US.
396
00:24:00,215 --> 00:24:02,624
You know, as a bad chapter in his…
397
00:24:02,704 --> 00:24:05,059
you know, his life as well.
398
00:24:06,841 --> 00:24:09,102
Vladimir Levin still lives
in Saint Petersburg
399
00:24:09,182 --> 00:24:12,150
and runs a hacker-UNrelated tea
and beer importing business.
400
00:24:13,920 --> 00:24:15,790
CALLING VLADIMIR LEVIN
401
00:24:21,431 --> 00:24:22,990
- I am listening.
- Hello.
402
00:24:23,070 --> 00:24:25,350
Vladimir, hello! Can you hear me well?
403
00:24:25,430 --> 00:24:27,030
I cannot hear you very well.
404
00:24:27,110 --> 00:24:29,173
I will try to increase the volume.
405
00:24:29,253 --> 00:24:30,168
Okay, try now!
406
00:24:30,248 --> 00:24:33,550
My name is Andrey Loshak,
and I am the director
407
00:24:33,630 --> 00:24:37,710
of a film about the phenomenon
of Russian hackers.
408
00:24:37,790 --> 00:24:39,430
Where did you get my number?
409
00:24:39,510 --> 00:24:42,017
We also know how to work with databases.
410
00:24:42,693 --> 00:24:47,110
To be honest, I am not interested at all.
411
00:24:47,190 --> 00:24:51,230
It is all old, boring,
uninteresting stuff.
412
00:24:51,310 --> 00:24:58,054
I think a dead fifteen minutes
of your film will be useless.
413
00:24:58,134 --> 00:25:00,990
It all happened too long ago.
It is boring, uninteresting.
414
00:25:01,070 --> 00:25:03,228
Not interesting at all.
That's what I think.
415
00:25:03,308 --> 00:25:05,950
It is like discussing a horse carriage
416
00:25:06,030 --> 00:25:08,728
in the times when we have Teslas
on our streets.
417
00:25:08,808 --> 00:25:12,160
Nonsense!
It can't be interesting to anyone.
418
00:25:18,430 --> 00:25:20,590
Come on, come on.
419
00:25:23,270 --> 00:25:24,933
Oh, little Tyoma…
420
00:25:29,120 --> 00:25:33,322
The Citibank robbery had a major influence
on Yekaterina and Evgeny Korolkov's fates.
421
00:25:33,402 --> 00:25:37,013
After serving his time and after his
divorce, Korolkov returned to Russia
422
00:25:37,093 --> 00:25:38,197
without money or home.
423
00:25:38,277 --> 00:25:40,486
He lives in poor conditions
with his grandson
424
00:25:40,566 --> 00:25:43,516
while his daughter is trying to make it
in Saint Petersburg.
425
00:25:48,914 --> 00:25:51,868
Yekaterina stayed in the USA,
remarried, and divorced again.
426
00:25:51,948 --> 00:25:55,415
Over the last five years, she has been
living with her biker boyfriend
427
00:25:55,495 --> 00:25:57,305
and working as a surfing instructor.
428
00:25:57,385 --> 00:26:00,688
Due to a bureaucratic mess-up,
she has lived here without documents
429
00:26:00,768 --> 00:26:01,768
for all these years.
430
00:26:02,364 --> 00:26:06,023
Her daughter, who grew up in America,
went to see her father 14 years ago.
431
00:26:06,103 --> 00:26:08,406
Ever since then,
she hasn't been able to return
432
00:26:08,486 --> 00:26:10,593
to the country she considers her homeland.
433
00:26:10,673 --> 00:26:12,382
You have never seen your grandson?
434
00:26:12,462 --> 00:26:16,007
Only on my phone.
435
00:26:17,448 --> 00:26:18,373
Right.
436
00:26:19,795 --> 00:26:23,990
Steve Garfinkel invested lots of effort
in helping Yekaterina acquire citizenship.
437
00:26:24,070 --> 00:26:27,970
But the FBI agent couldn't fight through
the Immigration Service's bureaucracy.
438
00:26:30,365 --> 00:26:32,420
I think she's a good person, I think she…
439
00:26:32,500 --> 00:26:36,740
kind of learned from her past mistakes.
440
00:26:36,820 --> 00:26:39,400
I've always seen her
as being very kind of upbeat.
441
00:26:40,000 --> 00:26:42,320
I follow her on Instagram and Facebook.
442
00:26:42,400 --> 00:26:44,759
She's always got
kind of uplifting stuff, she's…
443
00:26:44,839 --> 00:26:46,639
You know, about, like, kite surfing.
444
00:26:53,865 --> 00:26:57,818
Investigator Strigalyov and his colleague
went to the USA for a reciprocal visit
445
00:26:58,671 --> 00:26:59,928
at the end of the 1990s.
446
00:27:00,008 --> 00:27:01,940
It wasn't very useful for the case.
447
00:27:02,020 --> 00:27:04,444
But the trip was something to remember.
448
00:27:04,524 --> 00:27:07,208
This is me, and this is…
449
00:27:08,180 --> 00:27:09,502
Alexander Polyakov.
450
00:27:09,964 --> 00:27:15,540
This is how I looked when I was
on my trip to New York.
451
00:27:15,620 --> 00:27:17,420
This is our hotel.
452
00:27:17,500 --> 00:27:21,380
I feel very grateful to our American
partners
453
00:27:21,460 --> 00:27:24,180
for arranging very good accommodations
for us.
454
00:27:24,260 --> 00:27:26,248
I had my own room.
455
00:27:26,328 --> 00:27:27,688
Two rooms.
456
00:27:28,300 --> 00:27:30,106
The FBI paid for their trip
457
00:27:30,186 --> 00:27:34,533
because they're going to be
doing an investigation here
458
00:27:34,613 --> 00:27:36,222
to help on their end.
459
00:27:36,302 --> 00:27:39,309
Like, I went there
and, you know, they helped me.
460
00:27:39,389 --> 00:27:42,081
They're going to come here
and I'm going to help them.
461
00:27:42,161 --> 00:27:44,230
We had a party one night in their room.
462
00:27:44,310 --> 00:27:46,017
'Cause it was a really nice room.
463
00:27:46,097 --> 00:27:48,930
It was the same, you know, thing
with bottles of vodka
464
00:27:49,010 --> 00:27:54,120
and they brought a special…
Basically, it's fat, pork…
465
00:27:54,200 --> 00:27:57,300
You know, pork fat
with, you know, raw onions and…
466
00:27:57,380 --> 00:27:59,395
- Salo.
- Salo, yeah, right.
467
00:27:59,475 --> 00:28:01,102
Which is a little, you know…
468
00:28:03,470 --> 00:28:05,420
different for, you know, Americans and…
469
00:28:06,960 --> 00:28:08,860
But we had… we had a really good time.
470
00:28:09,037 --> 00:28:11,860
The Citibank system being broken into
by a Russian hacker
471
00:28:11,940 --> 00:28:15,260
helped the FBI get a budget for creating
special cyber squads,
472
00:28:15,340 --> 00:28:19,262
and later on, a special cyber division
with 56 offices throughout the country.
473
00:28:20,497 --> 00:28:23,500
Levin's case was unique for many reasons.
474
00:28:23,580 --> 00:28:25,980
It was the first network bank robbery,
475
00:28:26,060 --> 00:28:29,075
the first international crime
perpetrated by Russian hackers,
476
00:28:29,155 --> 00:28:31,458
and the only instance
of such close cooperation
477
00:28:31,538 --> 00:28:34,392
between the law enforcement agencies
of Russia and the USA
478
00:28:34,472 --> 00:28:36,092
in the cybercrime area.
479
00:28:47,180 --> 00:28:49,573
CHELYABINSK
480
00:29:26,350 --> 00:29:27,635
Hallelujah!
481
00:29:35,460 --> 00:29:39,146
Oh! The Washington Post,
with a column about me!
482
00:29:39,900 --> 00:29:43,084
A real column about me!
483
00:29:43,164 --> 00:29:45,060
Internet Dreams Turned to Crime.
484
00:29:45,140 --> 00:29:50,008
The dreams of the internet have led
to crimes, I guess.
485
00:29:50,933 --> 00:29:53,420
And there should be a big article.
486
00:29:53,500 --> 00:29:55,146
I read this in Arizona.
487
00:29:55,780 --> 00:29:59,235
Russian hackers hit the headlines
in America again in 2000.
488
00:29:59,760 --> 00:30:02,020
A programmer from Chelyabinsk,
Vasily Gorshkov
489
00:30:02,100 --> 00:30:06,180
decided to cash in on the dot.com boom
and founded a company called TekhNet.Ru.
490
00:30:06,260 --> 00:30:08,160
Its business was creating websites.
491
00:30:08,720 --> 00:30:11,777
He found jobs abroad
and did them in Chelyabinsk.
492
00:30:11,857 --> 00:30:14,957
A monthly profit of $100 was considered
good back at that time.
493
00:30:15,641 --> 00:30:17,751
We have smart
guys who can write this code.
494
00:30:17,831 --> 00:30:18,950
VASILY GORSHKOV
495
00:30:19,030 --> 00:30:22,115
And these guys didn't even necessarily
have to be very smart
496
00:30:22,195 --> 00:30:26,780
because I enjoyed doing
an occasional job myself.
497
00:30:26,860 --> 00:30:29,955
PHP and all. I was studying
these languages.
498
00:30:30,035 --> 00:30:33,540
It didn't seem difficult. It still isn't.
499
00:30:33,620 --> 00:30:37,020
It is very easy to learn something,
to write a script and execute it.
500
00:30:38,260 --> 00:30:41,220
TekhNet. Ru employed
a 20-year-old computer genius
501
00:30:41,300 --> 00:30:42,300
named Alexey Ivanov.
502
00:30:42,380 --> 00:30:44,780
He became Gorshkov's right-hand man
very quickly.
503
00:30:45,420 --> 00:30:48,660
Apart from developing websites,
Ivanov found vulnerabilities
504
00:30:48,740 --> 00:30:50,300
in American companies' networks
505
00:30:50,380 --> 00:30:53,128
and asked $1,500 to eliminate them.
506
00:30:53,208 --> 00:30:56,590
Here is a part of the correspondence
of Ivanov with an administrator
507
00:30:56,670 --> 00:30:59,119
of the Speakeasy Provider from Seattle
he hacked.
508
00:30:59,244 --> 00:31:02,780
I am checking security at Speakeasy
and found some holes.
509
00:31:02,860 --> 00:31:05,075
Would you like to hear more about them?
510
00:31:05,768 --> 00:31:08,049
And now, I'm looking for a job.
511
00:31:08,129 --> 00:31:10,590
Can you talk with your boss
about giving me a job?
512
00:31:10,683 --> 00:31:13,767
I am not sure you would want a job here.
We are pretty poor.
513
00:31:13,847 --> 00:31:16,148
I do have friends in larger companies,
however.
514
00:31:16,228 --> 00:31:18,450
Microsoft, of course. Amazon.
515
00:31:18,530 --> 00:31:20,890
Amazon, hehe? Cool company.
516
00:31:20,970 --> 00:31:24,133
I stole a lot of CDs, DVDs, and books
from Amazon.
517
00:31:24,213 --> 00:31:26,471
I don't have any other way to make money.
518
00:31:28,980 --> 00:31:32,151
Ivanov dreamt of being
a cybersecurity professional.
519
00:31:32,860 --> 00:31:36,020
It was impossible to find such
a job in Russia back then.
520
00:31:36,100 --> 00:31:40,220
Ivanov often complemented his hacks
with a CV and a request to hire him.
521
00:31:40,300 --> 00:31:42,650
That was what gave
the Chelyabinsk hackers away.
522
00:31:45,500 --> 00:31:48,080
SEATTLE, USA
523
00:31:48,160 --> 00:31:53,146
When Ivanov stole the data for 6,000 users
of a popular Seattle internet provider,
524
00:31:53,226 --> 00:31:55,841
the American Special Services started
devising a plan
525
00:31:55,921 --> 00:31:57,561
to catch the Chelyabinsk hacker.
526
00:31:57,641 --> 00:32:00,255
Prosecutor Steven Schroeder was involved
in the case.
527
00:32:00,335 --> 00:32:02,834
Computer crimes were his specialization.
528
00:32:02,914 --> 00:32:05,822
Since Russia didn't respond to inquiries
about the hacker,
529
00:32:05,902 --> 00:32:08,213
they decided on the "lure" option.
530
00:32:09,120 --> 00:32:10,280
STEVEN SCHROEDER
531
00:32:10,360 --> 00:32:13,973
There is an undercover
procedure known as the lure,
532
00:32:14,053 --> 00:32:20,220
which was a technique to trick
criminals in other countries
533
00:32:20,300 --> 00:32:23,040
to come to the United States
or some other country
534
00:32:23,120 --> 00:32:28,168
where they could be then arrested
or arrested and extradited.
535
00:32:29,040 --> 00:32:35,928
The FBI in Seattle set up
a fictitious Internet security company,
536
00:32:36,008 --> 00:32:37,653
which they called Invita.
537
00:32:39,413 --> 00:32:45,390
Ivanov had been advertised
himself to his victims
538
00:32:45,470 --> 00:32:49,297
as a computer security expert
and trying to get employment.
539
00:32:50,497 --> 00:32:53,360
So he was pretty easy to lure.
540
00:32:54,675 --> 00:32:57,380
We began to negotiate with him
and then he said,
541
00:32:57,460 --> 00:33:02,391
"By the way, I want to bring
my partner Gorshkov with me."
542
00:33:03,190 --> 00:33:05,740
Now, that was the first
we'd ever heard of Gorshkov.
543
00:33:07,422 --> 00:33:12,370
Alexey Ivanov was a talented guy
who lived in Chelyabinsk.
544
00:33:12,450 --> 00:33:16,080
He barely made a living,
doing occasional jobs.
545
00:33:16,160 --> 00:33:19,460
Well, browsing the internet
was just his hobby.
546
00:33:19,540 --> 00:33:21,973
Since he had no money to pay
for the services
547
00:33:22,053 --> 00:33:25,420
he might have examined the code,
found holes,
548
00:33:25,500 --> 00:33:27,750
and offered to eliminate it
for a certain sum.
549
00:33:28,050 --> 00:33:31,617
He approached me with a proposition,
"Let's go there
550
00:33:32,220 --> 00:33:34,020
and establish a joint company."
551
00:33:34,100 --> 00:33:37,893
After this, we started creating
that joint venture company
552
00:33:37,973 --> 00:33:40,140
in the area of cyber security.
553
00:33:40,220 --> 00:33:41,964
So, you took that bait.
554
00:33:43,160 --> 00:33:46,737
You journalists might see it that way.
555
00:33:46,817 --> 00:33:48,780
As for me, I had a good time.
556
00:33:49,884 --> 00:33:53,484
And I have a story to tell. Twenty years
later, you are still interested.
557
00:33:54,746 --> 00:33:55,980
Look!
558
00:33:56,060 --> 00:34:00,100
At those windows. Not at the top.
The fifth floor, I guess.
559
00:34:00,180 --> 00:34:01,620
That used to be our office.
560
00:34:01,700 --> 00:34:03,740
TekhNet. Ru was there, right?
561
00:34:03,820 --> 00:34:05,780
Yeah. We had our servers there.
562
00:34:05,860 --> 00:34:08,260
Real servers, real workstations.
563
00:34:08,340 --> 00:34:10,700
The most famous photos of me and Ivanov…
564
00:34:10,780 --> 00:34:14,380
The guys told us to send them photos
to be able to recognize us.
565
00:34:14,460 --> 00:34:19,161
We found the corner of our office
that looked the shabbiest.
566
00:34:19,241 --> 00:34:20,747
It was near the bathroom door.
567
00:34:20,827 --> 00:34:24,082
The door frames were all cracked,
and we took photos against them.
568
00:34:24,162 --> 00:34:26,378
You took these pictures for the Americans?
569
00:34:26,458 --> 00:34:29,300
- Yeah.
- Why did you choose the shabbiest corner?
570
00:34:29,380 --> 00:34:33,100
The Americans thought
that we were poor and miserable.
571
00:34:33,180 --> 00:34:34,781
And we wanted to show them that.
572
00:34:34,861 --> 00:34:35,738
Hey, guys!
573
00:34:43,475 --> 00:34:45,980
A cyber security expert
named Raymond Pompon
574
00:34:46,060 --> 00:34:48,020
was involved in the special operation
575
00:34:48,100 --> 00:34:50,933
for fishing technical details
out of the Russian hackers.
576
00:34:51,013 --> 00:34:53,469
For that, he was to impersonate
an Invita employee
577
00:34:53,549 --> 00:34:55,852
in an office that was rented
for this occasion.
578
00:34:55,932 --> 00:34:58,336
It was, like, a big deal
for the FBI at the time.
579
00:34:58,416 --> 00:34:59,266
RAYMOND POMPON
580
00:34:59,346 --> 00:35:01,813
They actually had a helicopter
flying over Seattle
581
00:35:01,893 --> 00:35:03,764
watching the car leaving the airport.
582
00:35:03,844 --> 00:35:07,860
A lot of money was spent on this because
this was going to be the FBI's big bust,
583
00:35:07,940 --> 00:35:10,750
and they were really going
to send a message to the world
584
00:35:10,830 --> 00:35:13,580
that, like, the FBI can get you
no matter where you are.
585
00:35:15,900 --> 00:35:18,660
TekhNet. Ru is a play on words in Russian.
586
00:35:18,740 --> 00:35:22,820
It means, "I'm not rubbing those things.
But I'm rubbing these things."
587
00:35:22,900 --> 00:35:23,940
Got it?
588
00:35:24,020 --> 00:35:26,826
We are not rubbing those.
We are rubbing these.
589
00:35:32,620 --> 00:35:35,137
I'm not rubbing those ones.
I'm rubbing other ones.
590
00:35:36,140 --> 00:35:37,457
It's a joke.
591
00:35:38,284 --> 00:35:40,871
It's a play of words.
592
00:35:43,159 --> 00:35:45,017
The special operation was secretly filmed.
593
00:35:45,097 --> 00:35:46,939
The footage was to be
a part of the evidence
594
00:35:47,019 --> 00:35:49,806
that was to demonstrate
the Chelyabinsk hackers' guilt in court.
595
00:35:49,886 --> 00:35:51,540
And then I remember they showed up.
596
00:35:51,620 --> 00:35:54,314
And the first thing that surprised me
was how young they were.
597
00:35:54,394 --> 00:35:57,661
Although, I had told the agents,
"You know what you're going to see?
598
00:35:57,741 --> 00:36:00,707
You're going to see one technical guy
and one business guy."
599
00:36:00,787 --> 00:36:03,052
That's kind of how
in the tech world we do it.
600
00:36:03,132 --> 00:36:04,966
When you send somebody to a customer,
601
00:36:05,046 --> 00:36:08,393
you always have, like, the nerd
and then the guy who seals the deal.
602
00:36:08,473 --> 00:36:09,983
And that was kind of the role.
603
00:36:10,063 --> 00:36:13,874
Alexey was the technical guy, and Vasiliy
was, like, the one making the deal.
604
00:36:13,954 --> 00:36:14,905
CHELYABINSK AIRPORT
605
00:36:14,985 --> 00:36:16,640
On Thursday, we left Chelyabinsk.
606
00:36:16,720 --> 00:36:18,980
We arrived in Seattle on Saturday.
607
00:36:19,060 --> 00:36:20,980
We didn't sleep for a minute.
608
00:36:21,060 --> 00:36:24,035
We saw that Seattle did exist.
609
00:36:24,580 --> 00:36:30,471
Right after they met us in the airport,
I had a feeling that they were shady guys.
610
00:36:30,551 --> 00:36:32,980
I didn't think we would work with them.
611
00:36:33,060 --> 00:36:37,220
They asked us where to buy bogus money.
612
00:36:37,300 --> 00:36:40,220
Things like that.
613
00:36:40,300 --> 00:36:44,764
And I was exhausted and didn't feel well.
614
00:36:44,844 --> 00:36:46,657
We arrived.
615
00:36:47,235 --> 00:36:50,780
"We would like to go to a hotel.
Should we book our rooms ourselves?"
616
00:36:50,860 --> 00:36:54,512
"Don't worry, we booked rooms for you.
But first, let's go to the office."
617
00:36:54,592 --> 00:36:56,979
"What office?
We haven't slept since Thursday."
618
00:36:57,059 --> 00:36:58,940
"No, let's go to the office!"
619
00:36:59,020 --> 00:37:01,093
We went there. There was a room.
620
00:37:01,795 --> 00:37:06,302
- So they didn't even let your sleep?
- Bastards!
621
00:37:07,268 --> 00:37:09,030
But when I started talking to them,
622
00:37:09,110 --> 00:37:11,310
I realized that
they were just geeks like me.
623
00:37:11,390 --> 00:37:12,940
We weren't that much different,
624
00:37:13,573 --> 00:37:17,033
except for they seemed to have,
like, no respect for the rules at all,
625
00:37:17,113 --> 00:37:20,357
but I realized that that might've been
culturally dependent, too.
626
00:37:20,437 --> 00:37:23,649
Because I had grown up in a place
where there was a lot of rules,
627
00:37:23,729 --> 00:37:26,390
and they grew up in a place
where probably rules were…
628
00:37:26,470 --> 00:37:29,020
meant to be broken in order to survive.
629
00:37:29,100 --> 00:37:32,330
I can't call myself a hacker.
630
00:37:32,410 --> 00:37:33,768
I'm no hacker.
631
00:37:40,897 --> 00:37:43,137
No, it's not hacking, actually.
632
00:37:43,940 --> 00:37:45,200
But a sort of business.
633
00:37:45,280 --> 00:37:50,880
Right after we came there,
I went to check my e-mail on my server.
634
00:37:50,960 --> 00:37:55,022
The server was physically standing
in the Chelyabinsk office.
635
00:37:56,020 --> 00:37:57,860
I logged in. I had a look.
636
00:37:57,940 --> 00:38:02,888
They were like, "Show us how you hack.
Show us how you do this and that."
637
00:38:02,968 --> 00:38:05,248
We were like,
"What are you talking about?"
638
00:38:05,328 --> 00:38:06,940
They say, "Show us how you hack."
639
00:38:07,020 --> 00:38:09,620
I was trying to do the opposite:
to show them our flash.
640
00:38:09,700 --> 00:38:11,653
Flash was trendy at that time.
641
00:38:11,733 --> 00:38:15,528
They were like, "Yes, that is pretty.
But show us how you hack."
642
00:38:16,773 --> 00:38:20,230
We had a laptop set up
with a keyboard logger on it.
643
00:38:20,310 --> 00:38:22,690
They said, well, let us show you.
644
00:38:22,770 --> 00:38:24,888
We can't do any hacking here
because, you know,
645
00:38:24,968 --> 00:38:27,250
this is America
and we're worried about the FBI.
646
00:38:27,330 --> 00:38:29,230
To which everyone in the room is like…
647
00:38:29,790 --> 00:38:33,635
But what they did is they logged into
their server back in Russia
648
00:38:34,444 --> 00:38:36,020
and pulled down some tools,
649
00:38:36,100 --> 00:38:38,787
to me they weren't actually
very sophisticated tools.
650
00:38:38,867 --> 00:38:41,680
Later on it turned out because
they had done that they'd actually…
651
00:38:41,760 --> 00:38:43,315
we'd captured their password
652
00:38:43,395 --> 00:38:46,115
that they used to log in to their site
to bring their thing down,
653
00:38:46,195 --> 00:38:49,020
which became a big issue
in the case later on.
654
00:38:49,100 --> 00:38:52,860
Later on, when they started
going on and on about bogus money,
655
00:38:52,940 --> 00:38:55,220
I was like, "Okay…
656
00:38:55,300 --> 00:38:58,300
"Guys, you seem to have read
too much about the Russian mafia.
657
00:38:58,380 --> 00:39:00,595
"You have the wrong idea.
658
00:39:01,130 --> 00:39:02,488
"We are just IT guys."
659
00:39:02,568 --> 00:39:05,786
Even though nobody called us IT guys,
just computer guys.
660
00:39:06,604 --> 00:39:09,813
Right after we left that room,
661
00:39:09,893 --> 00:39:12,820
we go down to the parking lot,
and it is all full of police.
662
00:39:12,900 --> 00:39:16,000
All the Washington State Police,
and some came from California.
663
00:39:39,479 --> 00:39:42,995
Gorshkov and Ivanov were immediately
separated and sent to different jails.
664
00:39:43,075 --> 00:39:44,810
They never saw each other again.
665
00:39:45,786 --> 00:39:50,900
Accessing his server on an FBI computer
was Gorshkov's fatal mistake.
666
00:39:50,980 --> 00:39:53,964
Before that, the FBI only had the proof
of Ivanov's guilt.
667
00:39:54,860 --> 00:39:58,700
They accessed this computer
that physically was here, in Chelyabinsk,
668
00:39:58,780 --> 00:40:00,060
in the Russian Federation,
669
00:40:00,140 --> 00:40:02,780
and started copying files
as fast as they could
670
00:40:02,860 --> 00:40:04,613
without understanding what they were.
671
00:40:04,693 --> 00:40:08,580
After that, they went to a judge
to ask for a warrant
672
00:40:08,660 --> 00:40:10,763
to search the computers located in Russia.
673
00:40:10,843 --> 00:40:12,483
But they couldn't obtain this warrant.
674
00:40:12,563 --> 00:40:14,949
It is in Russia,
which is in a different jurisdiction.
675
00:40:15,029 --> 00:40:18,340
Basically, they committed
a crime in Russia.
676
00:40:18,420 --> 00:40:22,140
And a criminal case file
was started in Russia.
677
00:40:22,220 --> 00:40:27,733
About premeditated damage to property
and unauthorized access.
678
00:40:33,410 --> 00:40:38,488
They opened their own case in Russia
against American government
679
00:40:38,568 --> 00:40:42,340
for accessing Gorshkov's data
without his permission.
680
00:40:42,420 --> 00:40:45,210
- Have you heard about it?
- I've heard about it, yes. Yeah.
681
00:40:45,290 --> 00:40:49,048
I have a copy of a headline
on a Moscow newspaper.
682
00:40:49,768 --> 00:40:51,430
What do you think about it?
683
00:40:51,510 --> 00:40:53,893
Well, I think I won't go
on vacation to Russia.
684
00:40:56,684 --> 00:41:03,180
In our file dumpster, they found heaps
of scripts that open someone's e-mail
685
00:41:03,260 --> 00:41:05,306
or close someone else's e-mail.
686
00:41:05,386 --> 00:41:07,973
Several catalogs with titles like
"F…ck eBay."
687
00:41:08,053 --> 00:41:10,460
I don't remember if there was
"F…ck PayPal."
688
00:41:10,540 --> 00:41:12,380
Elon Musk was respected even back then,
689
00:41:12,460 --> 00:41:14,740
so "F…ck PayPal"
might not have been there.
690
00:41:14,820 --> 00:41:17,180
What matters is, there were files
with such names.
691
00:41:17,260 --> 00:41:19,422
I think that's why I lost my case.
692
00:41:19,502 --> 00:41:23,260
When the jury saw that "F…ck,"
they didn't even want to look further.
693
00:41:23,340 --> 00:41:26,657
And they even couldn't understand
what these scripts did.
694
00:41:28,420 --> 00:41:31,288
Data found on Gorshkov's server
enabled the prosecutor
695
00:41:31,368 --> 00:41:33,600
to lay a new accusation against
the hackers.
696
00:41:34,670 --> 00:41:37,724
What they were doing
they were scanning IP addresses
697
00:41:37,804 --> 00:41:39,950
looking for certain port numbers.
698
00:41:40,030 --> 00:41:44,910
Port numbers identified processes
or applications that were running,
699
00:41:44,990 --> 00:41:48,737
and there were some known
vulnerabilities in several of them
700
00:41:48,817 --> 00:41:50,524
and they simply exploited them.
701
00:41:51,230 --> 00:41:52,960
PayPal was not hacked
702
00:41:53,040 --> 00:41:55,620
but what they did was they used
703
00:41:55,700 --> 00:41:59,330
some web-based e-mail companies
to establish e-mail accounts.
704
00:41:59,410 --> 00:42:02,980
They would then associate those accounts
with stolen credit card numbers
705
00:42:03,060 --> 00:42:05,850
and open PayPal accounts
with that information.
706
00:42:05,930 --> 00:42:08,755
They would then purchase goods
707
00:42:08,835 --> 00:42:14,160
either through eBay
or other online merchants,
708
00:42:14,240 --> 00:42:17,502
and pay for them through PayPal
using the stolen credit cards.
709
00:42:18,506 --> 00:42:21,102
Those goods were then
shipped to Kazakhstan.
710
00:42:22,260 --> 00:42:25,400
They had actually built
a very elaborate system
711
00:42:25,480 --> 00:42:28,360
of making use of eBay and PayPal
712
00:42:28,440 --> 00:42:31,940
to launder credit cards
and buy things online.
713
00:42:32,020 --> 00:42:34,690
In some ways I think they were
pioneers in the field.
714
00:42:34,770 --> 00:42:38,357
Oftentimes when you're following
cybercrime, it's like follow the money.
715
00:42:38,437 --> 00:42:39,960
Follow how they're making the money
716
00:42:40,040 --> 00:42:41,910
'cause that's where
you'll see the innovation.
717
00:42:41,990 --> 00:42:45,270
It's like Bitcoin sort of drove
ransomware and things like that.
718
00:42:45,350 --> 00:42:47,345
So, these guys, they were
early to figure that out
719
00:42:47,425 --> 00:42:50,132
and early to really
capitalize on that, so…
720
00:42:51,820 --> 00:42:54,604
Unlike Ivanov, Gorshkov refused
to admit guilt and cooperate
721
00:42:54,684 --> 00:42:56,140
with the investigators.
722
00:42:56,220 --> 00:42:59,780
He faced from 25 to 100 years in prison:
this impressive term
723
00:42:59,860 --> 00:43:04,648
was based on the damage estimated
by the investigators as being $25,000,000:
724
00:43:04,728 --> 00:43:08,750
$500 per stolen card
with 50,000 cards in total.
725
00:43:09,550 --> 00:43:12,410
The defense expert, however, proved
that the investigators
726
00:43:12,490 --> 00:43:15,810
mistook any 16-digit sequences
found by the FBI agents
727
00:43:15,890 --> 00:43:19,140
on the server in Chelyabinsk
for card numbers.
728
00:43:19,220 --> 00:43:21,080
We go to the courtroom.
729
00:43:21,160 --> 00:43:22,133
Ivanov isn't there.
730
00:43:22,850 --> 00:43:27,973
They state the damage.
Twenty-five million.
731
00:43:28,053 --> 00:43:31,777
I can feel my prison reputation
getting a boost. Because it's so…
732
00:43:32,453 --> 00:43:36,690
There comes my expert who,
as I was thinking,
733
00:43:36,770 --> 00:43:40,590
was working not for me
but for the government,
734
00:43:40,670 --> 00:43:45,404
and he says, "Hang on, why did you decide
that these are credit cards?"
735
00:43:45,484 --> 00:43:48,234
At that moment, I got
that he was really working for me.
736
00:43:48,631 --> 00:43:51,610
And the judge goes,
"Do you have any more evidence?"
737
00:43:51,690 --> 00:43:55,120
And that was it. They immediately
wrote off that twenty-five million.
738
00:43:57,410 --> 00:43:59,570
As a result, instead of twenty-five years,
739
00:43:59,650 --> 00:44:02,945
Gorshkov was sentenced to three years,
after which he was deported to Russia.
740
00:44:03,025 --> 00:44:05,182
Prosecutor Schroeder was disappointed.
741
00:44:05,262 --> 00:44:07,120
We were disappointed in the sentence.
742
00:44:08,488 --> 00:44:09,920
We thought it was low.
743
00:44:10,820 --> 00:44:13,610
Judge Coughenour was an interesting man.
744
00:44:13,690 --> 00:44:15,760
He's a federal judge, and he had
745
00:44:16,480 --> 00:44:20,000
worked in an international
organization with Russia
746
00:44:20,080 --> 00:44:24,435
in developing or looking
at the judicial system in Russia.
747
00:44:25,297 --> 00:44:27,660
So, he was fond of Russians,
748
00:44:27,740 --> 00:44:31,080
and he had a lot of sympathy
for these young people
749
00:44:31,160 --> 00:44:33,870
who really didn't have
a lot of opportunity,
750
00:44:33,950 --> 00:44:36,990
where, you know,
buying a used car was a luxury.
751
00:44:37,070 --> 00:44:39,930
He had a lot of sympathy
with that, and he…
752
00:44:40,010 --> 00:44:44,275
He gave Gorshkov
what we thought was a lenient sentence.
753
00:44:49,884 --> 00:44:54,330
This was during the first big
web boom out before the burst,
754
00:44:54,410 --> 00:44:57,360
and there was all these companies
were just exploding.
755
00:44:57,440 --> 00:44:59,940
Technical skills were super valuable.
756
00:45:00,020 --> 00:45:02,730
There were bidding wars
for people with talent.
757
00:45:02,810 --> 00:45:05,635
And, so, to be somewhere,
like, in Chelyabinsk
758
00:45:05,715 --> 00:45:07,671
and see that and not have that…
759
00:45:07,784 --> 00:45:10,968
You know, that could definitely
sort of cloud your mind and go, like,
760
00:45:11,048 --> 00:45:13,690
"Wow, I want a part of that.
How can I become part of that?
761
00:45:13,770 --> 00:45:16,977
Why not me? I may know
more than these guys." So…
762
00:45:17,804 --> 00:45:20,050
That's what I saw from them
and I actually felt bad.
763
00:45:20,130 --> 00:45:22,080
I can understand. You want to do this.
764
00:45:22,160 --> 00:45:25,780
I like to build,
I like to do these things, and it's…
765
00:45:25,860 --> 00:45:28,040
You can't and so here's a way to do it.
766
00:45:28,120 --> 00:45:31,084
And it's unfortunate
this what it ended up.
767
00:45:33,730 --> 00:45:37,300
Having returned to Chelyabinsk,
Gorshkov tried various professions.
768
00:45:37,380 --> 00:45:40,620
In 2010, he decided to run
for the local legislative assembly.
769
00:45:41,475 --> 00:45:44,140
For that, he founded the Townspeople
Social Movement.
770
00:45:45,857 --> 00:45:48,820
This is the focus of attention
for the deputy candidate
771
00:45:48,900 --> 00:45:50,346
Vasily Gorshkov.
772
00:45:51,120 --> 00:45:54,595
Making the residential areas
more comfortable and green.
773
00:45:55,400 --> 00:45:58,355
Controlling the quality
of utility services.
774
00:45:59,420 --> 00:46:01,697
Supporting mothers and children.
775
00:46:01,777 --> 00:46:03,128
YEKATERINA TOMILOVA, A MOM-TO-BE
776
00:46:03,208 --> 00:46:04,933
Gorshkov focuses on mothers' issues.
777
00:46:05,013 --> 00:46:07,940
The issues of single parents,
big and poor families.
778
00:46:08,020 --> 00:46:10,220
We are voting for Vasily Gorshkov.
779
00:46:10,300 --> 00:46:12,150
Mine is the politics of real actions.
780
00:46:12,631 --> 00:46:13,930
For Gorshkov!
781
00:46:14,010 --> 00:46:15,191
For the townspeople!
782
00:46:18,420 --> 00:46:22,070
As expected, Gorshkov lost the election
to the United Russia candidate.
783
00:46:22,150 --> 00:46:24,115
Other attempts to cooperate
with the government
784
00:46:24,195 --> 00:46:26,020
weren't successful either.
785
00:46:26,100 --> 00:46:31,340
That is what I don't like
about our officials and deputies.
786
00:46:31,420 --> 00:46:35,224
I have never hidden my story.
I am not proud of it.
787
00:46:35,304 --> 00:46:38,120
I'm not hiding it because I believe
that I got there by accident.
788
00:46:38,200 --> 00:46:39,520
I really did.
789
00:46:39,600 --> 00:46:45,075
But any time I get in contact
with any state entity,
790
00:46:45,155 --> 00:46:51,980
they say, "Oh, this will come to no good.
Let us think about it," and so on.
791
00:46:52,060 --> 00:46:54,560
Is this like a brand you can't remove?
792
00:46:54,640 --> 00:46:56,471
Yes.
793
00:46:56,551 --> 00:46:57,940
It never goes away.
794
00:46:58,020 --> 00:47:01,173
I think it is double hypocrisy.
795
00:47:01,253 --> 00:47:07,128
The very same people might be saying,
"Yeah, you did great in that story.
796
00:47:07,208 --> 00:47:09,715
You fought back against the Americans."
797
00:47:10,462 --> 00:47:14,980
In the next sentence,
"Hold on, how can we do that?"
798
00:47:15,060 --> 00:47:16,764
Well, you can't.
799
00:47:18,700 --> 00:47:21,990
All that was left from the prison epic
is this box with documents
800
00:47:22,070 --> 00:47:24,160
that Gorshkov managed to take from the USA
801
00:47:24,240 --> 00:47:25,760
and now keeps in his garage.
802
00:47:27,111 --> 00:47:29,040
These are the trial transcriptions.
803
00:47:29,600 --> 00:47:31,200
Here is Gorshkov, the defendant.
804
00:47:32,140 --> 00:47:33,448
Washington. And so on…
805
00:47:34,311 --> 00:47:36,420
Steve Schroeder, Floyd Short.
806
00:47:36,500 --> 00:47:37,600
That's it.
807
00:47:37,680 --> 00:47:41,031
Robert Apgood. He is a good guy.
808
00:47:41,111 --> 00:47:42,670
He was the computer expert.
809
00:47:43,340 --> 00:47:48,100
I have kept all the papers.
I have to arrange them neatly
810
00:47:48,180 --> 00:47:52,540
and then burn them neatly because after
twenty years, if nobody requests them,
811
00:47:52,620 --> 00:47:55,040
you won't be reading them either, guys.
812
00:47:59,620 --> 00:48:03,780
Please, make sure to thank that expert who
did the great job of figuring it all out.
813
00:48:03,860 --> 00:48:06,140
I thought that that expert was against me.
814
00:48:06,220 --> 00:48:10,300
But he eventually showed that
I didn't have the twenty-five million,
815
00:48:10,380 --> 00:48:14,257
as if I had stolen twenty-five million,
I would be sentenced to twenty years.
816
00:48:15,020 --> 00:48:18,500
Quite to the contrary,
he sent money to my family here
817
00:48:18,580 --> 00:48:20,090
because they were in hardship.
818
00:48:20,170 --> 00:48:24,680
He participated in a multi-million
dollar trial, yet he helped,
819
00:48:24,760 --> 00:48:27,315
he sent them some decent money
during that time.
820
00:48:27,395 --> 00:48:30,780
I can't find the proof now,
but they really lived off that.
821
00:48:30,860 --> 00:48:33,220
- Did you ask him?
- I didn't even know about it.
822
00:48:33,300 --> 00:48:35,208
I've never even talked to him.
823
00:48:35,288 --> 00:48:40,420
If he, Rob Apgood, hears this,
I will be sincerely grateful.
824
00:48:40,500 --> 00:48:45,780
He transformed the way I saw people,
Americans included
825
00:48:45,860 --> 00:48:50,180
because when I was on trial,
826
00:48:50,260 --> 00:48:52,100
naturally, I was very angry.
827
00:48:52,180 --> 00:48:55,502
But then I looked at them and thought,
"They're all just people."
828
00:49:03,937 --> 00:49:05,146
This is gifts.
829
00:49:05,710 --> 00:49:09,020
- Yeah, it's very nice.
- Black caviar and vodka.
830
00:49:09,100 --> 00:49:11,260
- Yes, very nice.
- Typical Russian present.
831
00:49:11,340 --> 00:49:14,124
- Yes, very nice.
- It's for Vasiliy Gorshkov.
832
00:49:16,266 --> 00:49:21,111
Vasya was looking at about 25
to 100 years of imprisonment.
833
00:49:21,586 --> 00:49:23,271
ROBERT APGOOD
CYBER SECURITY EXPERT
834
00:49:23,351 --> 00:49:26,090
We did an excellent job as the legal team,
835
00:49:26,170 --> 00:49:30,080
we got it down to three years
with credit for time served.
836
00:49:30,160 --> 00:49:32,826
And he'd already spent 22 months then.
837
00:49:32,906 --> 00:49:35,290
He always struck me
as a very forthright person.
838
00:49:35,370 --> 00:49:39,671
I presented some fairly
damning evidence to him,
839
00:49:39,751 --> 00:49:43,120
and he admitted that he knew
about it, and I thought,
840
00:49:43,200 --> 00:49:45,271
“I got an honest client. That's rare.”
841
00:49:47,431 --> 00:49:52,453
I knew he had a newborn child,
a daughter, I believe.
842
00:49:53,410 --> 00:49:55,350
I spoke to his brother and he said,
843
00:49:55,430 --> 00:50:00,382
“Well, she's having difficulty because she
needs medicine for the baby and whatnot
844
00:50:00,462 --> 00:50:02,702
and they couldn't afford it.” So…
845
00:50:03,555 --> 00:50:06,568
I sent money over to them
to take care of the child.
846
00:50:06,648 --> 00:50:08,231
- Your own money?
- Yes.
847
00:50:09,866 --> 00:50:12,106
- Do you remember how much?
- No.
848
00:50:12,986 --> 00:50:14,410
Doesn't matter.
849
00:50:14,490 --> 00:50:17,360
Did you do these things often
with your clients?
850
00:50:17,440 --> 00:50:20,340
Never before, never since, no.
851
00:50:20,420 --> 00:50:22,275
- Just once with Gorshkov?
- Yes.
852
00:50:23,022 --> 00:50:23,890
Unbelievable.
853
00:50:23,970 --> 00:50:25,587
I don't think children should suffer
854
00:50:25,667 --> 00:50:28,084
because of wrong doings of their parents.
855
00:50:29,500 --> 00:50:30,968
I have a…
856
00:50:31,048 --> 00:50:32,880
strong belief in God.
857
00:50:32,960 --> 00:50:36,515
I'm an ordained minister as well
and have been since 1969.
858
00:50:37,230 --> 00:50:40,430
So, I look at people
from the perspective of
859
00:50:40,510 --> 00:50:45,182
what would a good person do
if God expected them to take action.
860
00:50:45,911 --> 00:50:48,248
And… that's what motivated me.
861
00:50:53,688 --> 00:50:57,700
Gorshkov owes the US Government
over $60,000.
862
00:50:57,780 --> 00:50:59,980
That is the estimated damage
for things bought
863
00:51:00,060 --> 00:51:03,100
under forged accounts and sold in Russia.
864
00:51:03,180 --> 00:51:06,180
A businessman from the Urals,
Andrey Tkachenko,
865
00:51:06,260 --> 00:51:09,700
was among the people who purchased
the goods, no extra questions asked.
866
00:51:09,780 --> 00:51:11,580
We were working with them a lot.
867
00:51:11,660 --> 00:51:15,380
They sold us disks a little cheaper
than the licensed sellers.
868
00:51:15,460 --> 00:51:17,020
But they were still authentic?
869
00:51:17,100 --> 00:51:20,700
Yes. It was evident that they were
from America with all the labels.
870
00:51:20,780 --> 00:51:24,780
And American disks are very different
from European ones, for instance.
871
00:51:24,860 --> 00:51:27,500
It was evident that they came
from America.
872
00:51:27,580 --> 00:51:31,780
I think he also bought phones
on the internet.
873
00:51:31,860 --> 00:51:34,220
Because we had started dealing in phones
by then,
874
00:51:34,300 --> 00:51:36,340
and he also brought us phones.
875
00:51:36,420 --> 00:51:38,940
- For money?
- Yeah. Why not?
876
00:51:39,020 --> 00:51:43,220
Motorola was considered
a good brand back then.
877
00:51:43,300 --> 00:51:46,260
Did you convert, or "encash",
money from PayPal?
878
00:51:46,340 --> 00:51:48,020
We did encash some money.
879
00:51:48,100 --> 00:51:51,431
But the sum wasn't anything
like twenty million.
880
00:51:52,017 --> 00:51:56,140
I, personally, don't care about
those Americans who became his victims.
881
00:51:56,220 --> 00:51:58,260
He stole there and made investments here.
882
00:51:58,340 --> 00:52:01,502
Now, it's the reverse. They steal here
and invest there.
883
00:52:01,582 --> 00:52:04,453
Of course, there is a difference.
884
00:52:05,580 --> 00:52:07,777
If Vasily hadn't gone there,
885
00:52:07,857 --> 00:52:13,217
he would have got a million cards.
886
00:52:15,680 --> 00:52:18,320
He would have handed each Russian
an American card.
887
00:52:18,400 --> 00:52:21,100
"Here! Take it!" It would have been great.
888
00:52:27,608 --> 00:52:29,840
Prosecutor Steve Schroeder,
after retiring,
889
00:52:29,920 --> 00:52:33,740
wrote a book on the Chelyabinsk hacker
case, called The Lure.
890
00:52:33,820 --> 00:52:36,580
You know, this case was a huge deal
891
00:52:36,660 --> 00:52:40,200
for the computer security profession.
892
00:52:40,280 --> 00:52:42,960
- Why?
- Well, because…
893
00:52:43,040 --> 00:52:45,582
The bad guys got caught,
which they often don't,
894
00:52:45,662 --> 00:52:48,150
especially when they're coming
from a foreign country.
895
00:52:48,230 --> 00:52:50,580
And it just turned out well for them.
896
00:52:50,660 --> 00:52:56,800
This was the first large hacking case
that actually went to trial.
897
00:52:58,026 --> 00:53:03,090
What that meant was
that all the evidence was public,
898
00:53:03,170 --> 00:53:04,897
and could be put in a book.
899
00:53:05,591 --> 00:53:09,057
Steve Schroeder,
he wrote a book about this case.
900
00:53:09,137 --> 00:53:12,080
He didn't say nice things about me
but that's okay.
901
00:53:12,853 --> 00:53:14,586
They presented a good case.
902
00:53:16,440 --> 00:53:19,777
They were dispassionate,
they were doing their jobs,
903
00:53:19,857 --> 00:53:22,097
and they did it fairly well.
904
00:53:23,413 --> 00:53:24,844
We just did ours better.
905
00:53:36,051 --> 00:53:37,724
That was the point of the case.
906
00:53:37,804 --> 00:53:41,220
To show… Like, we could stop,
you know, people in Russia
907
00:53:41,300 --> 00:53:44,097
from hacking by capturing them
and arresting them.
908
00:53:44,177 --> 00:53:46,820
So, it was really meant to be
a big statement by the FBI
909
00:53:46,900 --> 00:53:49,315
and they put a lot of thought behind this.
910
00:53:52,960 --> 00:53:58,248
It failed because the case went
to prosecution in September 2001.
911
00:53:59,546 --> 00:54:03,333
You know, soon after that the FBI
sort of shifted priorities to terrorism.
912
00:54:06,275 --> 00:54:08,980
Gorshkov's associate Alexey Ivanov,
after serving his sentence,
913
00:54:09,060 --> 00:54:12,702
stayed in the USA, which is surprising
since they usually deport Russian hackers
914
00:54:12,782 --> 00:54:14,097
with a permanent ban.
915
00:54:14,177 --> 00:54:17,540
We don't know whether he works
for the American company he dreamed of
916
00:54:17,620 --> 00:54:18,560
or for special services.
917
00:54:18,640 --> 00:54:20,300
We couldn't reach Ivanov.
918
00:54:20,380 --> 00:54:24,260
After we contacted him on LinkedIn,
he deleted his account.
919
00:54:24,340 --> 00:54:25,911
I get that he made a deal.
920
00:54:25,991 --> 00:54:29,860
He must have been a valuable expert
for their special services
921
00:54:29,940 --> 00:54:31,220
once he stayed there.
922
00:54:31,300 --> 00:54:34,500
I don't know. And nobody told me
why they didn't let me talk to him.
923
00:54:34,580 --> 00:54:36,460
Why haven't you talked to him since then?
924
00:54:36,540 --> 00:54:39,460
I can't say that I was angry at him
or felt irritation.
925
00:54:39,540 --> 00:54:42,020
Of course, I didn't like some things.
926
00:54:42,100 --> 00:54:44,800
But on a bigger scale,
we just got unlucky.
927
00:54:44,880 --> 00:54:46,580
It could have happened to anyone.
928
00:54:46,660 --> 00:54:49,848
Gorshkov and Ivanov's case was
the FBI's first large investigation
929
00:54:49,928 --> 00:54:52,062
against Russian hackers
in the twenty-first century
930
00:54:52,142 --> 00:54:54,942
despite damages that seem
ridiculously small in our times.
931
00:54:55,022 --> 00:54:58,780
The Americans thought that a show-trial
would stop a growing wave
932
00:54:58,860 --> 00:55:01,300
of cybercrime from post-Soviet countries.
933
00:55:01,380 --> 00:55:05,644
As we know well now, their hopes
weren't destined to be fulfilled.
75428
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