Defendant in "Operation Open Market" Sentenced

LAS VEGAS, Nev. – A Miami man has been sentenced to nine years in prison, three years of supervised release, and ordered to pay over $50 million in restitution for his guilty pleas to racketeering and identity theft crimes as part of “Operation Open Market,” announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Daniel G. Bogden of the District of Nevada, and Special Agent in Charge Joseph Macias for HSI Los Angeles, which oversees the agency’s efforts in southern Nevada.

Alexander Kostyukov, aka “Temp”, aka “KLBS,” 30, a resident of Miami at the time of arrest, but originally from Russia, was sentenced on Tues., Dec. 8, 2015, by U.S. District Judge Andrew P. Gordon. Kostyukov pleaded guilty to participation in a racketeer influenced corrupt organization (RICO,) conspiracy to engage in a RICO, and three counts of unlawfully trafficking in and production of counterfeit identification documents.  Specifically, Kostyukov was a vendor of “cashout services” in the organization and provided members a way to transfer or launder the funds that they had unlawfully obtained from the stolen bank and credit card accounts.  Kostyukov received a fee of between 45% and 62% of the total amount laundered for providing cashout services to a member. 

“Millions of dollars and countless amounts of data were stolen from the victims by members of this international conspiracy,” said U.S. Attorney Bogden.  “We have now convicted 33 persons, most of who are sitting in federal prison.  We will continue to work with our federal and international law enforcement partners to arrest, prosecute and bring to justice the remaining defendants, no matter where they are located.”

“This lengthy sentence, and the significant prison terms imposed on others convicted in connection with in this far-reaching scheme, should serve as a sobering warning about the consequences awaiting those engaged in large-scale financial fraud,” said Special Agent in Charge Macias. “The global organization identified in this case was responsible for harming countless innocent victims and stealing tens of millions of dollars. Working with its enforcement partners, HSI will continue to aggressively target cyber thieves to ensure the perpetrators face the full weight of the law.”

“Operation Open Market” targeted an organization known as “Carder.su” whose members, also known as “carders,” were involved in large scale trafficking of compromised credit card account data and counterfeit identifications and credit cards, as well as money laundering, narcotics trafficking and various types of computer crime.  The organization operated an Internet web portal called a forum, where members could purchase the illicitly obtained data and share knowledge of various fraud schemes.  A second forum was also created to vet incoming new members.  The forums were generally hosted within the former Soviet Union and the upper echelon of the organization resides within the former Soviet Union.  In July 2011, the organization had an estimated 5,500 members.  A special agent initiated an undercover investigation called Open Market and assumed the identity as a member of the organization when it was in its infancy.  

Members of the organization had different roles, including moderators who directed other members in carrying out activities; reviewers who examined and tested products, services and contraband; vendors who advertised and sold products, services and contraband; and members.  Members were required to successfully complete a number of security features designed to protect the organization from infiltration by law enforcement or members of rival criminal organizations. 

Fifty-six persons were charged in four separate indictments in Operation Open Market. To date, 33 defendants have been convicted, one is pending trial, and the rest are fugitives.  

The cases were investigated by HSI and the U.S. Secret Service, and are being prosecuted by Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan, and Trial Attorneys Kelly Pearson and Catherine Dick of the U.S. Department of Justice Organized Crime and Gang Section.  

This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information about the task force visit: www.stopfraud.com.