ChronoPay CEO arrested for alleged DDoS attack on rival

June 27, 2011, Mon 11:40 AM  Internet  Security  Business

The Russian security service FSB has arrested Pavel Vrublevsky, the CEO of ChronoPay, the countrys largest processor of online payments, for allegedly hiring a hacker to attack his companys rivals. The well-known Internet activist and junk mail fighter is charged with distributed denial-of-service attack of his companys rival Assist, which paralyzed the system of selling tickets on the Aeroflot website.

Moscows Lefortovsky court has sanctioned on Friday the arrest of ChronoPays CEO Pavel Vrublevsky, RIA-Novosti reports. Vrublevsky was ordered held without bail and a hearing was set for a months time. A source confirmed the detention to CNews, but said that it came on Thursday Mr. Vrublevsky returned to Moscow with his family and was arrested in the Sheremetievo airport.

Vrublevsky fled the country after the arrest of a suspect who confessed that he was hired by Vrublevsky to launch a debilitating cyber attack against Assist, a top ChronoPay competitor. The DDoS attack was meant to make Assist's system appear undependable during trial runs and sway Aeroflot's management towards ChronoPay. The airline ultimately opted for Alfa-Bank, a large Russian private bank and filed a lawsuit against VTB-24 bank which secured to Aeroflot payments processing through Assist.

However FSB estimated Assist and Aeroflots losses only at 1 million roubles. ChronoPays legal adviser Dave Schlendorf explained to Financial Times, that the charges are supported by hacker Igor Artimovich who was arrested earlier and confessed the attack on Assist. He admitted that he was instructed and paid by Vrublevsky to launch the attack against Assist. Mr. Schlendorf says that Vrublevsky denies charges and states that he does not know Artimovich personally and spoke to him via the Internet.

Pavel Vrublevsky holds a majority stake of ChronoPay, which is registered in the Netherlands. Companys co-owner is former employee of the Main Intelligence Directorate Leonid Terekhov.

ChronoPay CEO Pavel Vrublevsky arrested in Moscow

Vrublevskys ChronoPay has become one of the country's most notorious Internet companies, involved in many cyber criminal operations including scareware distribution, rogue online pharmacies and music piracy.

In 2006 and 2007 together with former producer of Tatu group Ivan Shapovalov he bought Internet-shop and actively pushed for collective control of copyrights in the Internet. When this scheme was made unlawful due to legal changes, Vrublevsky left the business.

Since 2007 when electronic tickets became legalized in Russia, Chronopay entered this market and initiated the E-Avia project. In 2009 Vrublevsky together with the Russian Association of electronic commerce started a fight against the founder of pharmaceutics distributing network Glavmed Igor Gusev, who was described as the main spammer in the world. Last year a criminal case was launched against him.

Mr. Gusev on his part placed on the Internet the evidence that he was a co-owner of ChronoPay, but was forced by Vrublevsky to sell his stake. He also accused his former partner of involvement in several shady Internet businesses connected with spam, pharmaceutics, pornography and affiliation with Fethard Finance, an online payment system that turned bankrupt in 2007 and did not pay back to many of its clients. Mr. Vrublevsky denied all the allegations.

Last year ChronoPay itself was attacked by hackers several times. For instance late last year its payment page was changed, which led to the information of several clients credit cards being leaked. Recently expert security journalist Brian Krebs accused Mr. Vrublevsky of creating a fake anivirus MacDefender.

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