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Feds Make Example of Minor Player in First-Ever Cyber-RICO Case

Dec 10, 2013 | White Collar Offenses |

In 2009, a 17-year-old Arizona boy paid $330 for a fake ID he ordered from a seller named “Celtic” on a website called Carder.su. The site was essentially an eBay-like forum where anonymous users bought and sold illegal items.

The ID was flawless, and over the next year he ordered more so he could sell them. Unfortunately for him, “Celtic” was an undercover Secret Service agent running a sting operation called Operation Open Market. Arizona convicted the teen of identity fraud and he was sentenced to seven years.

Even as he settled into prison, however, the Department of Justice decided to try out a new cybercrime-fighting tactic. Deprived of high-value targets because they live abroad, it chose to make an example of this now 22-year-old.

He was federally charged with conspiracy to violate the Racketeer Influenced and Corrupt Organizations Act, or RICO, instead of the more usual computer or credit card fraud. Under RICO, this minor-league dealer in fake IDs could be held criminally responsible for the activities of all 7,800 Carder.su members — and financially liable for all $50.5 million in ill-gotten gains the government estimates in the case.

Passed to fight the mafia, RICO holds each and every member of a criminal organization, regardless of role, equally culpable for the illegal activities of the entire enterprise. Justice wants a young man who had nothing to do with the site itself to get the same penalty it would have sought for Carder.su’s founder.

Justice pulled out all the stops. It flew in a specialist from its D.C.-based Organized Crime and Gang section to assist. It scheduled the trial for three weeks and listed 43 potential witnesses, including one of the FBI’s top cybercrime agents, and 1,500 planned exhibits.

“They steamrolled us,” said his defense attorney, and indeed, the young man was convicted on Friday.

But is a black-market website or file-sharing network really equivalent to La Cosa Nostra? Is it even an organization in that sense? Those who ran Carder.su never gave instructions like a Mafia boss would; these were trades by people completely unknown to the site administrators.

Is a teen trying to sell fake IDs really who should be prosecuted under RICO, one of our harshest federal criminal laws?

“They never intended to get the main guys,” says the defense attorney. “They’re only going to get the college kids that came in, and guys like [this].”

Source: WIRED, “Guilty Verdict in First Ever Cybercrime RICO Trial,” Kevin Poulsen, Dec. 9, 2013

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