According to the U.S. Department of Justice, Michael D. Mihalo, a 40-year-old from Naperville, Illinois, admitted his guilt in a court of law yesterday. Mihalo confessed to orchestrating a vast conspiracy to sell purloined financial data on the dark web, also known as the darknet.
Operating as ‘ggmccloud1’, Mihalo was the mastermind behind Skynet Market, a nefarious “carding” site on the darknet. Not limiting themselves to one market, Mihalo and his accomplices were also key vendors on other darknet platforms, including AlphaBay Market, Wall Street Market, and Hansa Market. These platforms primarily traded in cryptocurrencies, such as Bitcoin.
Mastermind Behind Darknet’s Skynet Market Revealed
Between February 22, 2016, and October 1, 2019, Mihalo and his co-conspirators unloaded stolen financial information – mostly credit and debit card details – of tens of thousands of unsuspecting U.S. citizens. The transactions were all conducted in digital currencies, a common practice on these platforms.
Mihalo wasn’t alone in this operation. He assembled a team of accomplices who reaped the benefits of Mihalo’s established reputation on the darknet platforms. One such accomplice was Taylor Ross Staats, 40, from Texas, who played the role of a “card-checker.” Staats ensured the financial information sold on various darknet sites remained active and not flagged by financial institutions. For his services, Staats earned at least $21,000 worth of Bitcoin.
Unmasking the Darknet Scheme: From Stolen Data to Bitcoin Riches
Mihalo personally handled information associated with 49,084 stolen payment cards, which he intended to be trafficked on darknet sites, earning at least $1 million worth of cryptocurrencies, including Bitcoin, Ethereum, and Monero. These funds have seen considerable appreciation since then.
Facing the consequences of his actions, Mihalo pleaded guilty to several counts, including conspiracy to commit access device fraud, access device fraud, and money laundering. He is set to be sentenced at a later date. The severity of his sentence, which could be as high as 10 years in prison for some counts, will be determined by a federal district court judge after considering the U.S. Sentencing Guidelines and other statutory factors.
The High Stakes of Cybercrime: Profits and Penalties
Under the terms of his plea agreement, Mihalo must forfeit any property he obtained through his criminal actions, including his substantial cryptocurrency holdings, financial accounts, and real property. The exact monetary judgment will be determined by the judge at sentencing.
Mihalo isn’t the only one facing justice. His accomplice, Staats, pleaded guilty on December 14, 2022, to one count of conspiracy to commit access device fraud. He faces a maximum penalty of five years in prison and will be sentenced on a later date.
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