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Pa. man charged in hacking case

Allegedly pillaged online account of Mass. investor

A Pennsylvania man was arrested yesterday and charged in federal court with hacking into a Westborough man's personal computer and pillaging his online brokerage account.

Van T. Dinh, 19, of Phoenixville, Pa., allegedly placed a so-called Trojan horse program on the unnamed Massachusetts investor's computer to learn his brokerage password, then shifted $37,000 worth of investment losses from his own account to the other man's. To avoid detection, Dinh, prosecutors say, went through elaborate machinations to obscure his identity.

Dinh appeared in federal court in Pennsylvania yesterday where he was charged with unauthorized access to a protected computer, mail and wire fraud, and securities violations. He was released on his own recognizance for a probable cause hearing next Wednesday.

A message left at Dinh's home seeking comment wasn't returned last night. A spokeswoman for the Westborough man's brokerage, TD Waterhouse, declined to talk about the details of the case but said it was an isolated incident.

"It's regrettable that an individual's personal computer was hacked and information was stolen," brokerage spokeswoman Jennifer Olegario said. "The TD Waterhouse system was not compromised and remains safe and secure for our customers."

According to an affidavit filed by Kenneth Heitkamp, an agent in the FBI's Boston office, Dinh took a number of steps to hide his identity. He subscribed to an "anonymizing" service that allowed him to send e-mails while hiding his identity, for example, and he routed messages through Internet service providers in Australia, Ireland, and Germany.

The complaint alleges Dinh spent $91,200 from June 18 through June 27 this year buying put options on Cisco Systems stock, at $15 per share. He was speculating the firm's shares would fall before his options expired July 19. If they did, he could buy shares at the lower price and sell them at $15 per share, profiting from the difference.

Since the stock traded higher during that period, however, his options became worthless. To minimize his losses, according to the FBI affidavit, Dinh used fake e-mail accounts to send messages to the Westborough investor urging him to download a supposed stock-charting program.

In fact, prosecutors say, the program was a "keystroke logging" program that recorded everything the man typed and sent it to one of Dinh's e-mail accounts. Dinh allegedly used that information to learn the investor's account name and password.

With that information, he placed buy orders through the man's account on July 11 for Cisco options using all of the account's free cash, $46,986. Dinh's account sold the options, the man's account purchased them, and after trading costs were taken into account, Dinh saved $37,000, the government alleges.

If convicted, Dinh faces up to 30 years in prison and a $1 million fine.

Scott Bernard Nelson can be reached at nelson@globe.com.

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