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DEFENDANT WHO ALLEGEDLY MADE ALMOST $8 MILLION FROM INTERNATIONAL COMPUTER HACKING TO BE SENTENCED ON FEBRUARY 28, 2011 IN BOSTON FEDERAL COURT

MONDAY, FEBRUARY 14, 2011

BOSTON, Mass. - On February 28, 2011, ASU PALA, a 37 year-old New Hampshire man will be sentenced for his role in an international computer hacking conspiracy that earned him nearly $8 million. On April 21, 2010, PALA of Hudson, NH, pleaded guilty to one count of conspiracy to commit computer fraud and five counts of failure to file a United States income tax return.

Individuals who believe that they may be a victim of PALA’s scheme should notify the U.S. Attorney’s Office by filling out a victim impact statement form which can be found at at http://www.justice.gov/usao/ma/forms/PalaVictimNotification.pdf and e-mailing the form to USAMA.ComputerCrimeVictims@usdoj.gov.

During an earlier plea hearing, the prosecutor told the court that had PALA gone to trial, the government’s evidence would have proven that from 2003 through 2007, PALA and his co-conspirators infected German citizens’ computers with a program that would force the computers’ telephone modems to surreptitiously dial premium telephone numbers rented from German telephone companies by PALA’s co-conspirators. The premium telephone lines operated like 1-900 numbers such as those used for directory assistance or astrological predictions: the telephone companies charged callers for added expenses on top of standard connection fees and sent a portion of the added expenses to those who rented the premium lines, in this case PALA’s co-conspirators. The victims were generally unaware that their computers' telephone modems were calling these numbers and charging them these expenses. Victims paid the added charges if they did not notice them on their telephone bills. The telephone companies then sent the added charges to the premium telephone line renters, who divided the proceeds among the co-conspirators, including PALA. PALA, the prosecutor stated, participated in the conspiracy by employing computer programmers to write and edit the computer hacking software and by sending the hacking software to co-conspirators.

Although PALA participated in the scheme while based in Massachusetts and elsewhere in New England, PALA did not target United States computers or computer users. Instead, PALA focused solely on computers and computer users in Germany and possibly other European countries. In the process, the prosecutor stated, from 2003 through 2007, PALA made approximately $7,941,336 from the computer hacking conspiracy. PALA also allegedly failed to pay approximately $2,287,993 in income taxes during this time, including taxes on his income from the hacking scheme.

Judge Gorton scheduled sentencing for February 28, 2011. PALA faces up to 10 years of imprisonment; 3 years of supervised release to follow; a fine of $250,000 or twice the gain or loss, whichever is highest, on each count; restitution to the computer hacking victims; restitution to the IRS of approximately $2,287,993; and forfeiture of up to $7,941,336. The United States Attorney has recommended a sentence that includes all the above elements, and imprisonment for 92 months.

Victims of PALA’s conspiracy, who connected to the Internet using telephone lines while located in Germany and possibly other European countries between late 2003 and 2007, may e-mail any information and documentation regarding victimization and/or loss to USAMA.ComputerCrimeVictims@usdoj.gov by February 23, 2010.* Victim impact statement forms can be found at http://www.justice.gov/usao/ma/forms/PalaVictimNotification.pdf.

Victims of United States federal crimes are accorded various rights, which are listed in Title 18, United States Code, Section 3771. These rights include the right not to be excluded from most public court proceedings, the right to be reasonably heard at a public court proceeding, the right to confer with the government, and the right to be treated with fairness and respect for the victims’ dignity and privacy.

*Potential victims will not be contacted individually. Any persons determined to be a victim by the Court will be contacted through appropriate international law enforcement officials following the sentencing hearing. Sentencing results will be posted on http://www.justice.gov/usao/ma/news.html.

 

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