Russian businessman gets nine years for role in US financial hacking scheme

A judge in Boston federal court today sentenced Vladislav Klyushin, who ran a Moscow online consulting firm, to nine years in prison for running a hacking scheme that netted him and his employees $93 million by making stock trades on companies whose financial data they obtained before the information was made public.

Four of the employees at his company were also charged, but face no US prison time because they remain in Russia, safe from extradition to the US. A jury at US District Court in Boston convicted Klyushin in February on charges of wire and security fraud.

Klyushin, 42, was nabbed in Switzerland in March, 2021, when he and his family flew there on a private jet for a ski vacation - on an airport tarmac as they were walking from the jet to a chartered helicopter for the ride to their chalet. The Swiss handed him over to the FBI - after he and the Russian government unsuccessfully fought extradition - and he was flown to Boston to await trial.

The sentence means that Klyushin, who had been held without bail at a flight risk at a Plymouth County lockup, will now be transferred to a federal prison.

In the early days of his time in Plymouth, he fought unsuccessfully to be transferred to home arrest in an apartment he had found in the Seaport, near the Moakley Courthouse. He said he would even pay for private guards to watch over him. Federal prosecutors, however, successfully convinced judges that letting him move to the Seaport would mean he could walk 150 yards to a dock and get on a high-speed boat that would quickly take him out of US territorial waters.

In addition to the prison time - minus the time he has already spent locked up to this point - US District Court Judge Patti Saris ordered Klyushin to forfeit $34.1 million in his overseas bank accounts. Saris has yet to determine an additional amount of restitution to the companies whose pre-release SEC data was stolen by him and his employees - one of whom is also charged with hacking in connection with the 2016 elections and with efforts to hold Russian athletes and their coaches accountable for doping.

Neither of the servers hacked by Klyushin's M-13 company were based in Boston, but federal authorities decided to try him here because, for at least one month, some of their hacking attempts were routed through a VPN based in a data center at the Macy's building in Downtown Crossing.

Federal prosecutors had urged US District Court Judge Patti Saris to sentence Klyushin to 14 years:

Klyushin’s convictions require a sentence that is sufficient to account for the unprecedented seriousness of his crimes; to punish him consistently with other similarly situated hacking and insider trading defendants; and to deter him and the communities of overseas cybercriminals who prey on our financial markets and digital lives.

His attorneys said 3 years was more than enough:

Born into relative poverty and having to work from the age of 13 to help pay for his and his family's expenses, Vlad worked hard, finished college, obtained a master's and a doctorate degree, and started multiple successful businesses, which provide for hundreds of employees and their families. Along the way he was blessed by a full life: he married, had five loving children (ages 6 to 14), and has the love and support of his family and large network of friends. As the 17 letters submitted to the Court describe in detail, Vlad has often displayed extraordinary compassion, generosity, and civic and charitable commitment. Letter after letter detail a caring and supportive husband, a deeply involved father, an empathetic and dependable friend to many, and a man who routinely and regularly does good deeds, large and small, without an expectation of anything in return.