Russian Spies and Conspirators Hacked Yahoo in 2014, DOJ Charges

Four foreign nationals indicted for allegedly stealing data on at least 500 million Yahoo user accounts

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The U.S. Department of Justice said Wednesday that four foreign nationals — including two officers of the Russian Federal Security Service — were indicted for computer hacking, economic espionage and other crimes in connection with a massive attack and theft of data from Yahoo’s network in 2014.

A grand jury in Northern California indicted four defendants, the DOJ said. Those included two agents of Russia’s Federal Security Service, known as FSB: Dmitry Aleksandrovich Dokuchaev, 33, a Russian national and resident; Igor Anatolyevich Sushchin, 43, a Russian national and resident. Authorities allege they conspired with two hackers on the Yahoo attack: Alexsey Alexseyevich Belan (aka “Magg,”), 29, a Russian national and resident; and Karim Baratov (aka “Kay,” “Karim Taloverov” and “Karim Akehmet Tokbergenov”), 22, a Canadian and Kazakh national and a resident of Canada.

Yahoo’s disclosure of two massive user-data breaches that occurred in 2013 and 2014 threatened to derail the Verizon acquisition of the internet company’s web businesses. Verizon and Yahoo agreed to shave $350 million from the purchase price for Yahoo’s internet businesses, to about $4.48 billion, because of the hacks; Verizon CEO Lowell McAdam had originally sought to reduce the deal price by $925 million, according to a Yahoo SEC filing this week.

The four individuals lost their access to Yahoo’s networks in September 2016, but they continued to used data stolen from the company through at least December 2016, the DOJ said. According to the indictment’s allegations, two Russian spies — Dokuchaev and Sushchin — “protected, directed, facilitated and paid” criminal hackers to collect information through computer intrusions in the U.S. and elsewhere. In the case of the Yahoo attack, the two FSB agents worked with Belan and Baratov to obtain access to the email accounts of thousands of individuals, the DOJ said.

“The indictment unequivocally shows the attacks on Yahoo were state-sponsored,” Chris Madsen, Yahoo’s assistant general counsel and head of global law enforcement, said in a statement. “We are deeply grateful to the FBI for investigating these crimes and the DOJ for bringing charges against those responsible.”

When Yahoo disclosed the 2014 attack last September, it said at the time that the stolen user-account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords and in some cases encrypted or unencrypted security questions and answers.

Earlier this month, Yahoo general counsel Ron Bell resigned after a board inquiry faulted the company’s legal team with not sufficiently pursuing the 2014 breach. The board also withheld CEO Marissa Mayer’s 2016 bonus and Mayer agreed to forgo any 2017 equity compensation.

According to the DOJ, the four defendants were behind the 2014 attack. All together, they face 47 criminal counts, including conspiring to commit computer fraud and abuse. Beginning in January 2014, the feds charged, the individuals used unauthorized access to Yahoo’s systems to steal information from about at least 500 million Yahoo accounts and then used some of that stolen information to obtain unauthorized access to the contents of accounts at Yahoo, Google and other web email providers, including accounts of Russian journalists, U.S. and Russian government officials, and private-sector employees of financial, transportation and other companies.

In addition, one of the defendants — Belan — also exploited his access to Yahoo’s network “for his personal financial gain,” the DOJ said, by searching Yahoo user communications for credit-card and gift-card account numbers. According to authorities, Belan also redirected a subset of Yahoo search-engine traffic to earn commissions, and gained access to more than 30 million accounts whose contacts were then stolen to facilitate a spam campaign.

“Cybercrime poses a significant threat to our nation’s security and prosperity, and this is one of the largest data breaches in history,” Attorney General Jeff Sessions said in a statement. “But thanks to the tireless efforts of U.S. prosecutors and investigators, as well as our Canadian partners, today we have identified four individuals, including two Russian FSB officers, responsible for unauthorized access to millions of users’ accounts. The United States will vigorously investigate and prosecute the people behind such attacks to the fullest extent of the law.”

On March 14, Baratov was arrested in Canada and his case is now pending with the Canadian authorities, the DOJ said. Belan — who has previously been publicly indicted and was named one of FBI’s Cyber Most Wanted criminals in November 2013 — was arrested in Europe on a request from the U.S. in June 2013, but he was able to escape to Russia before he could be extradited. The DOJ did not indicate the whereabouts of the two FSB officers, Dokuchaev and Sushchin, indicted in the Yahoo case.