Federal Trial Begins for Alleged Kremlin-tied Hacker

January 30, 2023

Jury selection was set to begin Monday in federal court in Boston in the hack-and-trade case of Vladislav Klyushin, a Russian businessman with ties to the Kremlin.

42-year-old Klyushin faces charges in a scheme that involved hacking into companies and then trading on that stolen corporate information to the tune of tens of millions of dollars. 

The DOJ extradited Klyushin from Switzerland in December 2021, at which time he was charged with conspiring to obtain unauthorized access to computers, conspiring to commit wire fraud and securities fraud, as well as with obtaining unauthorized access to computers, wire fraud and securities fraud.

The DOJ at the time said Klyushin had worked for the Russian government, and that we was charged alongside Ivan Ermakov, a then-35-year-old hacker who had been previously charged in July 2018 in federal court in Washington DC for his alleged role in a hacking and influence effort related to the 2016 U.S. elections, among other crimes in this country.

In January 2022, Christopher Krebs, former head of the U.S. Cybersecurity and Infrastructure Security Agency (CISA), called Klyushin’s arrest and prosecution a potential “gold mine” for U.S. intelligence because it could shed additional light on Russian intel operations against the West.

“This is a big get for a few reasons: If he flips, he may be able to confirm the intelligence community’s findings about Russian efforts to interfere in the 2016 election,” Krebs told CNN last January.

Prosecutors in Monday’s hack-and-trade trial say that from 2018 through 2020 Klyushin, Ermakov and three others used stolen earnings reports to buy and sell stocks for multiple companies, including IBM, Snap Inc. and Tesla, allowing them to make at least $89 million. 

Klyushin’s attorneys argue that the government’s evidence linking any trades he placed to the hacked information suffers from “serious flaws.”

He has been held without bail since his extradition from Switzerland. Klyushin’s wealth and assets include a nearly $4 million yacht, which prosecutors say he discussed buying at the same time the trading scheme unfolded.

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