US Authorities Arrest, Charge Four Members Of Xbox Underground Hacking Ring

Chuck Bednar for – Your Universe Online
Four men who were part of an alleged international computer hacking operation have been charged with stealing over $100 million worth of intellectual property from Microsoft, the US Army and various top video game publishers, officials from the US Justice Department revealed on Tuesday.
According to Reuters reporter Aruna Viswanatha, Sanadodeh Nesheiwat, 28, of New Jersey and David Pokora, 22, of Ontario, Canada pleaded guilty to charges in Delaware federal court. Nathan Leroux, 20, of Maryland, and Austin Alcala, 18, of Indiana, were also charged in an 18-count superseding indictment that had been unsealed earlier in the day.
A fifth suspect is an Australian citizen who has been charged in his native country for his role in the activity, the Justice Department said. Prosecutors said the ring accessed and stole source code, technical specifications and other data from the computer networks of Microsoft and several of its partners, Viswanatha added.
Furthermore, the hackers are accused of stealing information about pre-release versions of the video game titles Gears of War 3 and Call of Duty: Modern Warfare 3, as well as logging into a US Army network to swipe simulator software for the Boeing Apache attack helicopter, Justice Department officials told Reuters on Tuesday.
“Those attacks occurred after the ring hacked into the network of Zombie Studios, a Seattle-based video game developer contracted by the Army to make the training software, according to the indictment,” said Viswanatha. “The men allegedly obtained access to the computer networks partly by using the stolen user names and passwords of employees at the partner firms.”
The indictment dates back to April, and the Justice Department has placed the value of the stolen technology between $100 million and $200 million, according to Nicky Woolf of The Guardian. Pokora and Nesheiwat each pleaded guilty to a single count of conspiracy to commit computer fraud and copyright infringement. Their sentencing is scheduled for January, and they face a maximum of five years in prison.
The hackers were members of a ring known as Xbox Underground, and in addition to stealing trade secrets and financial data, Gizmodo’s Adam Clark Estes reported that they even manufactured and sold a counterfeit Xbox One prior to the hardware’s release. In addition to those already charged, authorities believe there are six others involved, he added.
Assistant US attorney Ed McAndrew told Woolf that FBI officials in Delaware were first tipped off about Xbox Underground’s activity by an anonymous informant in January 2011, and that the gaming companies involved cooperated fully with the probe. Pokora, who was viewed by the other members of the group as a leader, was arrested back in March at a border crossing in Lewiston, New York.
The Justice Department also revealed that an Australian citizen has been charged under that country’s law for his alleged role in the hacking ring. The individual was not named, but The Guardian (citing Australian media reports) identified him as 19-year-old Perth native Dylan Wheeler. Wheeler, who was 17 at the time, was the one who listed the homemade Xbox One prototype on eBay at a time when the console was still under development.
“As the indictment charges, the members of this international hacking ring stole trade secret data used in high-tech American products, ranging from software that trains US soldiers to fly Apache helicopters to Xbox games that entertain millions around the world,” assistant US attorney General Caldwell said, according to Woolf.