Feds hold massive Phish Phry – 100 invited to do time at the table

by Steve Ragan - Oct 8 2009, 17:00

On Wednesday, 100 people – 53 in the U.S. and 47 in Egypt – were indicted after the conclusion of multinational investigation that uncovered what the FBI said was a sophisticated Phishing operation.

Dubbed Operation Phish Phry, the joint investigation was a first for the Egyptian law enforcement and the FBI.  Launched in 2007, after the FBI started working to help financial organizations from falling victim to criminals targeted them, the initiative quickly led to what the FBI said was a conspiracy to Phish American-based financial institutions and victimize an unknown number of account holders. When intelligence led the FBI to Egypt, local authorities agreed to help.

The 51-count indictment, made public Wednesday, accuses all of the defendants with conspiracy to commit wire fraud and bank fraud. Various defendants are charged with bank fraud; aggravated identity theft; conspiracy to commit computer fraud, specifically unauthorized access to protected computers in connection with fraudulent bank transfers and domestic and international money laundering.

The Egyptian-based Phishers obtained bank account numbers and related personal identification information from an unknown number of bank customers through normal means, such as using fraudulent mockups of the targeted banks, according to the indictment. Armed with the bank account information, they would break into accounts at two banks targeted.

Once they accessed the accounts, those operating in Egypt communicated via text messages, telephone calls, and Internet chat groups with their partners in the states. The indictment lists defendants Kenneth Joseph Lucas, Nichole Michelle Merzi, and Jonathan Preston Clark as the state-side group leaders.

Through these communications, both the Egyptians and Americans would coordinate the transfer of funds from compromised accounts to newly created fraudulent accounts. The indictment says that for their part, two of the suspects in the U.S would recruit runners to open these fraudulent accounts. As payment, some of the stolen funds were transferred via wire services to the individuals operating in Egypt who had originally provided the bank account information.

Domestically, 33 of the 53 identified suspects were arrested in California, Nevada, and North Carolina. There is no word on the remaining 20 suspects. Egyptian authorities said that 47 suspects were charged for their role in the Phishing operation.

As mentioned, each of the 53 defendants named in the indictment is charged with conspiracy to commit bank fraud and wire fraud. This carries a maximum penalty of 20 years in federal prison. However, because some of the defendants are named in additional counts, that could up their time behind bars considerably.

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