December 16, 2011

A decorated Ukrainian general was arrested last week in Romania along with two other men suspected of being part of an organized cybercrime gang that laundered at least $1.4 million stolen from U.S. and Italian firms.

Gen. Valeriu Gaichuck, far right.

Apprehended in Iasi, Romania last week were Matei Vitalie, 37, of Moldova; Konstantin Ossipov, a 42-year-old Israeli citizen; and 54-year-old Valeriu Gaichuk, a Ukrainian general who, according to his Facebook page, once studied at Florida International University in Miami.

Romanian prosecutors allege that the men created fake companies and business contracts to help to launder funds that were stolen from at least two firms, including $952,800 from the Society of Corporate Compliance and Ethics, an organization based in Minneapolis. Roy Snell, the society’s chief executive, declined to comment for this story.

Romanian authorities, working with the FBI and Italian special forces, were tipped off by banks in Italy, which denied a request allegedly by the accused to transfer $400,000 from a victim company there to a fictitious firm. According to documents released by prosecutors, the men were caught red handed on Dec. 9 trying to withdrawn nearly $1 million stolen from the American company.

A U.S. law enforcement investigator familiar with the case who spoke on condition of anonymity said keystroke logging Trojans were used to steal the online banking credentials of the victim organizations, and that the case is connected to at least one other cyber fraud investigation that is still pending. 

The judge overseeing the case approved the prosecutor’s request to have the men detained for at least 29 days pending further investigation, saying that authorities have information that the defendants belong to much larger organized criminal group.

12 thoughts on “Ukrainian General Arrested in Cyber Heists

  1. bruce

    authorities have information that the defendants belong to much larger organized criminal group.


  2. sandu

    It would be great if all banks would check any transfer before authorizing it, like the Italian banks do. Italy has Mafia experience and they have tighter control.

  3. JS

    My Italian is rusty. Are the Italian Special forces mentioned the unit used to detect and prosecute money laundering for terrorism?

    Strangely, I think the IBM’s Moffet’s got caught with insider trading as Rajaratnam was allegedly funneling funds for Tamil Tigers from money gained by insider deals.

    I figure the motivation could be greed or could be political, by the fact a General got caught.

    I wonder if this is an instance of branches sharing or not sharing intel on how funding of terrorists flows in the criminal economy.

    That there is terror money flowing inside the digital economy shouldn’t then much of the shine of online money laundering be tainted and used to help curtail its allure.

    I remember that Kennedy Sr. was ostracized for being a bootlegger by polite society as his operation had to deal with shady persons at some point. Many people turned a blind eye as they got to ride the carousel yet overlooking the darker side of bootlegging; bribes, coersion, other goods mixed in with smuggling runs etc.

    I think the 30’s bootleggers today are digital money-launders. Some people point to the money launders as middlemen in a daring and high flying lifestyle and turn a blind eye to where the money goes (drugs, white slavery, terror…) They are envied for their ways to enable a fast life style which persons are yearning for.

    The only way to stem the tide is to show the cruel consequences of money laundering and hopefully the next guy aspiring to money launder gets discouraged that its not bloodless and the time served when caught is hardtime.

  4. victor pazmino

    well international cyber cops recoup one million with the help of banks wow!!!!

    but same cyber cops and banks allowed billions of dollars to go though their systems and collect billions on fees affecting thousands of victims for years

    if a fee involved is no crime (until the well dries up or collapses)

    ps: i lost my retirement to them

  5. AlphaCentauri

    Given the high number of fraudulent businesses located in Florida, it would be interesting to learn more about the personal contacts the general made during his time as a student there and what those alumni are up to now.

  6. Mykhailo

    A small comment about the “General”:

    the guy on the picture has nothing to do with Ukrainian military. He’s wearing a uniform of one of so called Cossack “patriotic” NGOs , that have no affiliation with any governmental agency in Ukraine. These are uniformed mummers; many of them have never been on active military duty.

    1. sandu

      You may be right, but in this case why Ukrainean Foreign Office haven’t reacted because it clearly affects the image of Ukraine?

      Also how do you explain his presence in military uniform near the Ukrainean minister of defense and other Ukrainean public figures?

      1. Mykhailo

        On your first question:

        I don’t think it’s a good idea for the government at large and Foreign Ministry especially to react on misbehavior of the member of NGO as such involvement will affect country’s image even greater. Anyway I can’t speak for the Ministry.

        On the second:

        If you mean pictures published on his facebook page I didn’t see any where he’s in uniform in presence of officials. If you mean the one where Gaichuk’s accepting a diploma from the guy with a really big star on a shoulder strap it’s clear the guy is not a Minister of Defense but so called “Cossack hetman”.

        There are also pictures of him in presence of real Ukrainian officials (like ex-President Yushchenko and former Minister of Interior Kravchenko) but he’s not wearing uniform there so taking into account surroundings I’d guess they were taken during various public events which can be easily explained by his involvement with ITR TV Channel but clearly not military service.

  7. george

    Fascinating story,
    It strikes me how bold were the three in insisting at CEC Bank during multiple visits to make the transfers, produce false paperwork and not baking up even after the 400.000 Euro stolen were recalled. At the same time, without knowing more details than published in the courtroom document linked by Brian, I’m positively impressed by the CEC Bank (a state owned bank!) diligence in insisting on proper documentation/paperwork before transferring the 933.000 USD to Letonia, Moldavia and Switzerland. Thanks to it, those 2 heists were epic fails for the crooks with almost all amount recovered.

  8. ZIN

    Уважаемые господа!Я знаю этого МЕРЗАВЦА,МОШЕННИКА иВОРА более 20 лет.Он до сих пор!должен мне более 100 000 usd!Бегал от меня по всейЕвропе,бежал в Панаму,там наделал столько дел…Да,он купил звание казачьего генерала,как он пролез в дипломаты,одному Богу известно.Работал атташе по культуре от Украины в Венесуэле.Наверняка,через него делались чёрные делишки.Надо проверить все его дипломы.Это,наверняка,всё фальшивое.Как и он сам.Настоящее его образование-незаконченный музыкальный колледж по классу баяна(garmoshka),а потом-тюрьма на Урале(Россия)Убегая от меня и таких как я,кому был должен,он взял фамилию очередной жены Елены Гуйчук.Под этой фамилией он и проживает с 1996 года.Тогда же он хотел расплатиться со мной поддельным чеком.Хорошо,что в банке его знали и знали,на что он способен.Я буду только рад,если этот мерзавец сдохнет в тюрьме.Очень рад тому,что,если за него взялись FBI,то мало ему не будет!

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