Hacker Pleads Guilty

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By Mark Phillips ¦ Blog.TotalAV.com ¦ Updated 2nd May 2017, 09.11 EDT

Mark Vartanyan, who was accused of aiding the development and distribution of malicious software designed to steal financial details, has pleaded guilty on a computer fraud charge.

Vartanyan, who used the online alias ‘Kolypto’, was arrested in Norway back in October 2014, and extradited to the US in December. Vartanyan pleaded guilty in federal court in Atlanta following a deal to cooperate with federal prosecutors, who in turn agreed to push for no more than five years imprisonment.

The 29-year-old Moscow native was involved in the creation, maintenance, improvement and distribution of Citadel. According to prosecutor Greg D’Agincourt, the malicious software infects computer systems with the aim of stealing financial account and sensitive personal information.

Released in 2011, Citadel was originally marketed on invite-only, Russian-language forums used by hackers and cybercriminals, with users targeting the networks of global chief financial and government institutions. It’s estimated that the malware attacked around 11 million computers, costing its victims over $500 million in damages.

Citadel was a top-tier malware at its peak, but had a shorter rodeo than most similar malware due to its source code being leaked early, making it simpler for antivirus developers to protect their customers’ computers and networks.

“What made Citadel so unique is that it was the first one that really incorporated this concept of a customer relationship development module, where the developers wanted feedback from the users on improvements, additions and new features,” commented Ray, a former FBI special agent now directing a cyber investigations company, who interviewed Vartanyan following his arrest.

According to prosecutors, Vartanyan’s involvement with Citadel lasted through August 2012 to January 2013 while residing in Ukraine, and also through April 2014 to June 2014 while in Norway.

Dimitry Belorossov, of St. Petersburg, Russia, was also on trial in Atlanta, where he pleaded guilty to conspiring to commit computer fraud for distributing and installing Citadel on computers. Belorossov, who used the alias Rainerfox, was given a 4 ½ year prison sentence in September 2015.
The Department of Justice is still carrying out their extensive investigation, with the creator of Citadel yet to be identified.

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