FBI Arrests 3 Men For Stealing Xbox Trade Secrets; Skype Calls Part of Evidence

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The Smoking Gun reports a group of alleged hackers have been charged with breaking into the computer systems of the U.S Army, Microsoft, and several other firms to steal pre-release copies of popular video games like “Call of Duty,” simulation software for Apache attack helicopter pilots, and confidential data that was used to create counterfeit versions of the Xbox gaming system.

Three men have been named in a sealed federal indictment charging them each with 15 felony counts, including conspiracy, fraud, and computer hacking, according to a copy of the 54-page document.

Two other alleged hackers–a North Carolina resident and an Australian teenager–have been identified as unindicted coconspirators in the scheme, which began in early 2011 and continued for more than two years.

A federal grand jury last July returned a sealed indictment against Nathan Leroux, 19; Sanadodeh Nesheiwat, 28; and David Pokora, a Canadian resident. FBI agents last week arrested Leroux at his Wisconsin home and collared Nesheiwat  at his New Jersey residence.

According to the indictment, the trio and their coconspirators identified vulnerabilities and “network weak points” to illegally access computer systems at Microsoft and video game developers Valve Corporation, Activision Blizzard, Zombie Studios, and Epic Games. The hacks allowed the defendants to illegally obtain copies of various games that, at the time, were still in development, like “Gears of War 3” and “Call of Duty: Modern Warfare 3.”

Investigators allege that the Microsoft hack resulted in the theft of “Log-In Credentials, Trade Secrets, and Intellectual Property relating to its Xbox gaming system.” At the time of the intrusions–which spanned 2011 and 2012–Microsoft was developing its Xbox One system, which was officially released in November 2013.

As a result of the Microsoft intrusions, Leroux and the two coconspirators–armed with “internal design and technical specifications and pre-release operating system software code”–were able to build a “counterfeit, next-generation” Xbox console that was sold on eBay for about $5000, the indictment charges.

Leroux allegedly constructed a second counterfeit Xbox console with hardware components purchased from NewEgg.com.  That system was destined for a purchaser in the Republic of Seychelles, a small island nation off the eastern coast of Africa.

The counterfeit console, however, was intercepted by the FBI with the assistance of an individual identified in the indictment as “Person A,” a Delaware resident who was cooperating with agents. Leroux had given the console to “Person A,” who was supposed to mail it to the Republic of Seychelles.

The indictment makes it clear that “Person A” had been involved with the hacking crew since mid-2011. For example, “Person A” and others participated in a July 2011 Skype conversation during which Pokora sought assistance with the installation of encryption software on his hard drives. “I need your help. I’m going to get arrested,” Pokora said.

During an October 2011 chat session cited in the indictment, Pokora and the Australian teen–who is identified by his initials, “D.W.”–discussed  the illegal computer intrusions. “if we do this right, we will make a million dollars each,” said Pokora.  In a Skype audio call, Pokora reportedly also spoke of compromising a “fuckton of Paypals” from compromised databases, adding that “we could have already sold them for Bitcoins which would have been untraceable if we did it right. It could have already been easily an easy 50 grand.”

Using the handle “SuperDaE,” Wheeler provided confidential Microsoft documents to Kotaku, and told the web site of his various hacking exploits.  The indictment refers to Kotaku quoting “D.W.” discussing his “unauthorized access to a next-generation Xbox gaming console.”

Source: The Smoking Gun

 

About Author

Suril is a scientist, journalist and obsessive Microsoft observer. He holds an advanced degree in Biotechnology with minors in Biochemistry, Microbiology, and Molecular Biology. Send him tips on twitter: http://www.twitter.com/surilamin

  • ilovegoogleglass

    LMAO

  • JumpIf NotZero

    Enjoy jail boys. You’re not rich enough to get white collar prison. Actions have consequences.

    Ironically, criminal work like this is really hard. Legit work would have paid more than they got out of this, minus the whole jail thing. Seems a lot better to me.

    • techieg

      They were apparently not smart enough to figure that out. Now, with all their hacking skills, they probably won’t be able to get a job anymore, not even the security clearance to do such work. Their lives have just started to go down the drain.

  • mckayhb09

    It’s very concerning that they had access to Skype conversations. Prior to Microsoft’s acquisition this would have been very hard to obtain. Microsoft have built backdoors into Skype.

  • THOSE GUYS ARE DUMB

    LOL, I hope getting games early and making a few grand is worth years in prison. What a bunch of total fucking idiots..

  • http://yourig.livejournal.com/ ZloiYuri

    Make them turpentine enema. If they stupid enough and don’t think with head what they doing and how to earn money legally – let’s ass teach them.