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Rutherford Man Admits Role In $2M Identity-Theft Hacking Scheme

Outside the Martin Luther King U.S. District Courthouse in Newark
Outside the Martin Luther King U.S. District Courthouse in Newark Photo Credit: CLIFFVIEW PILOT

RUTHERFORD, N.J. -- A Rutherford man on Thursday admitted stealing more than $2 million by hacking corporate computers to steal the identities of of millions of people.

Tomasz Chmielarz, 33, told a judge in Newark that he was solicited in January 2013 to write spam that bypassed filters for Timothy Edward Livingston of Boca Raton, Florida.

A second defendant, 28-year-old Devin James McArthur of Ellicott City, Maryland, admitted his role in the scheme on Thursday, as well.

Livingston is scheduled for trial in U.S. District Court in Newark on Oct. 13.

Livingston and others operated A Whole Lot of Nothing LLC — a business that specialized in sending spam for clients, U.S. Attorney Paul J. Fishman said.

Some were legitimate businesses, such as insurance companies, and others illegal entities -- online pharmacies that sold medications without prescriptions, for instance.

"Typically, Livingston charged $5 to $9 for each spam email that resulted in a completed transaction for a client," Fishman said.

Using proxy servers that hid their identities, Livingston and Chmielarz sent out spam messages using botnets" to hide their wrongdoing, he said.

They "hacked into the email accounts of individuals and compromised and seized control of the mail servers of some of the corporate victims to further their spam campaigns," the U.S. attorney said.

Livingston and Chmielarz also created custom software that "leveraged vulnerabilities in the websites of a number of corporations" to send more span, Fishman said.

Working with McArthur, the pair stole swiped confidential databases from corporate victims -- some of which held personal ID information for millions of Americans, he said.

At one point, Fishman said, Livingston and McArthur "estimated that they had succeeded in stealing 24.5 million records" by hacking into one company's database.

The government seized a 2006 Ferrari F430, two-door Spider Convertible and 2009 Cadillac Escalade SUV that prosecutors are asking a judge to order forfeited, along with nearly $300,000 from several bank accounts.

Fishman credited special agents of the FBI’s Cyber Division. Representing the government are Assistant U.S. Attorneys Daniel V. Shapiro of Fishman's Computer Hacking and Intellectual Property Section of the Economic Crimes Unit, Peter Gaeta of the Asset Forfeiture-Money Laundering Unit and Senior Trial Attorney William Hall of the Department of Justice’s Criminal Division Computer Crime and Intellectual Property Section.

Sentencing for Chmielarz and McArthur was scheduled for Sept. 13.

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