Gonzalez Agrees To Plead Guilty On All Counts, Surrender Almost $2.8 Million

Written by Evan Schuman
August 30th, 2009

Albert Gonzalez, who the federal government has accused of breaking into the payment card databases of TJX, Hannaford, 7-Eleven, Target, J.C. Penney and a laundry list of other major retailers, has agreed to plead guilty to all of the charges against him from Boston and a single count from New York, as StorefrontBacktalk reported on Thursday (Aug. 27). The plea agreement was filed on Friday (Aug. 28). His plea deal does not–at this time–include the New Jersey charges.

In exchange for an agreement to plead guilty to all counts of the Boston indictment and one count of the New York indictment, the government has agreed to drop all of the remaining New York counts.

In the Gonzalez plea bargain, the agreed-to sentencing recommendation—which calls for at least 15 years in prison and “no more than 25 years” in prison—does not seem much more lenient than he would have faced at trial. Even with as extensive a cyber attack as these, most U.S. courts wouldn’t go anywhere near “more than 25 years” in cases where no one was physically hurt and the defendant wasn’t accused of real violence or threatening violence.

But a jury is a tricky animal and, technically, the counts he is pleading guilty to have a cumulative maximum sentence of 193 years in prison. That said, most judges and juries have–thus far–regarded these assaults as white collar crimes where no consumers were individually hurt, neither physically nor financially. It’s not clear what he would truly have risked at trial.

In the first celebrated case of cyber crime–the case of Robbert Tappen Morris launching the first major Internet worm in 1988–the defendant received no jail time, although the law permitted a much more strict sentence. But one critical difference here is that Morris was trying to profit–or, dare I say, steal–with his worm. It was literally an experiment that went haywire. Judges tend to be less sympathetic to a self-admitted thief.

The fines are a different matter. In a financial case like this one, jurors generally have no hesitation to order that all monies be given back and that the defendant may be ordered to pay even more. But the $2.78 million he’s being asked to surrender—all but $1.65 million had already been seized and the government wants the defendant to agree to let them keep it—is likely as much as the court would have gotten at trial, given that it’s unlikely the plea deal would let him keep any more than was absolutely necessary.

Beyond the money, the government got Gonzalez to agree to let them keep his Miami condominium, a blue 2006 BMW 330I, three laptops, a Glock 27 firearm, a Nokia cell phone, a currency counter, a Sharp PDA, a 300-GByte Maxtor external hard drive and gifts to his colleagues: a Tiffany diamond ring and three Rolex watches.

The plea agreement came out of the U.S. Attorney’s Office in Boston, but another document says that it will also cover New York.


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Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
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A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
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