A federal magistrate judge on Friday ordered accused Russian hacker Roman Seleznev detained pending his trial on charges he operated a massive international scheme to steal and resell credit-card numbers.
Magistrate Judge James Donohue concluded that Seleznev posed a flight risk despite a promise by his attorneys that he would post a $1 million bond — secured by $100,000 cash — and agree to electronic monitoring and house arrest.
Donohue noted Seleznev has no local ties, was a frequent international traveler, has large amounts of money in bank accounts around the world and has the computer skills to create false identity documents.
Seleznev, 30, is the son of Valery Seleznev, a prominent member of the Russian Federation parliament. He was arrested by U.S. Secret Service agents on July 5 while vacationing in the Maldives, a tiny chain of islands in the Indian Ocean.
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Assistant U.S. Attorney Norm Barbosa told the court Friday that Seleznev knew he was a wanted man and had avoided visiting countries that have an extradition treaty with the U.S. The Maldives does not have such a treaty, however Barbosa said authorities there were so concerned about his activities that they notified the U.S.
He was arrested at the Maldives airport on a warrant from a sealed indictment handed up by a Seattle grand jury in 2011, charging him with 29 counts of bank fraud, computer hacking and aggravated identity theft. He is also wanted in Nevada on money-laundering charges. He faces up to 20 years in prison on the Seattle indictment.
Barbosa told Donohue that a laptop taken from Seleznev by federal agents contained nearly 2.1 million stolen credit-card numbers. Proceeds from the thefts, Barbosa said, may exceed $17 million.
One of his New York lawyers, Robert Ray, argued that his client “wasn’t going anywhere” and that he could be watched and monitored.
U.S. Attorney Jenny Durkan, who heads Attorney General Eric Holder’s advisory committee on cybercrime, said the investigation into Seleznev is continuing.
Russian authorities have protested his arrest. On Friday, Andrey Yushmanov, the consul general of the Russian Federation in Seattle, repeated charges by his country’s foreign ministry that Seleznev was kidnapped. He accused the U.S. of hiding a yearslong investigation into a Russian citizen, rather than asking for help.
The Seattle indictment alleges Seleznev “created and operated infrastructure” used to skim credit-card information from point-of-sale terminals. The U.S. Secret Service considers him one of the most prolific hackers in the world and alleges he operated servers in the U.S., Ukraine and Russia that compiled the stolen numbers and then hosted “criminal Internet forums” where the numbers were sold.
The indictment alleges that between November 2010 and February 2011 Seleznev stole more than 200,000 credit-card numbers and sold 140,000 on the criminal forums, reaping nearly $2 million in illicit profits.
The judge also inquired into concerns by federal prosecutors that the private New York and Seattle lawyers defending Seleznev might have conflicts of interest. He ordered them to file affidavits with the court ensuring Seleznev is aware of the issue before the case moves forward.
Ray and a partner, Ely Goldin, are both with the 550-lawyer international law firm Fox Rothschild, and they appeared on Seleznev’s behalf, along Seattle attorney David Smith with the local firm Garvey Schubert Barer.
Ray is a former federal prosecutor who succeeded Kenneth Starr as the independent counsel investigating Whitewater.
Federal prosecutors say another attorney at Fox Rothschild represented a business, Z Pizza, which was one of the companies allegedly attacked in Seleznev’s hacking scheme.
Likewise, an attorney at Garvey Shubert’s Portland office handled unrelated matters for another of Seleznev’s alleged victims, according to court filings.
Prosecutors did not allege wrongdoing by the defense but want to ensure Seleznev is properly informed of the potential conflicts.
Among the worldwide victims was a Seattle restaurant, the Broadway Grill, which enabled the U.S. Attorney’s Office here to investigate and indict Seleznev. The charges allege that more than 32,000 credit-card numbers — amounting to every credit transaction between December 2009 and October 2010 — were stolen from the restaurant, according to court documents.
Barbosa said the restaurant’s reputation was so damaged by the security breach that it went out of business.
Other victims included Grand Central Baking Co. in Seattle, several MAD Pizza outlets, Village Pizza and Mia Casa Italian Pizzeria.
Mike Carter: 206-464-3706 or firstname.lastname@example.org.