Vladislav Klyushin, a wealthy Russian businessman with ties to the Kremlin, has been sentenced to nine years in prison for his involvement in a complex stock market cheating scheme worth nearly $100 million.
Klyushin, who ran a Moscow-based IT company, was convicted of wire fraud and securities fraud charges after a trial in Boston. He played a key role in hacking U.S. computer networks to steal confidential earnings information for hundreds of companies, including major players like Microsoft and Tesla. Klyushin personally profited by more than $33 million through insider trading based on this stolen information.
Klyushin, aged 42, has been in custody in the U.S. since his extradition in 2021, and the time served during his detention will be credited toward his prison term. He was apprehended in Switzerland, arriving on a private jet, shortly before boarding a helicopter for a nearby ski resort. Following his prison sentence, he is expected to be deported to Russia.
While facing trial, Klyushin, along with his attorneys, declined to address the judge before the sentencing. Four alleged co-conspirators, including a Russian military intelligence officer charged with interfering in the 2016 U.S. presidential election, remain at large. Prosecutors sought a 14-year prison term for Klyushin, emphasizing the need for a strong message to deter overseas cybercriminals.
They argued that Klyushin showed no remorse for his crimes and would likely return to Russia, where he holds significant influence and connections in high-ranking circles.
The hacking scheme involved stealing usernames and passwords of employees from U.S.-based vendors used by publicly traded companies to make filings with the Securities and Exchange Commission.
Subsequently, the hackers infiltrated the vendors’ systems to obtain earnings-related filings before they were made public. Armed with this inside information, they manipulated the stock market by buying shares of companies about to announce positive financial results and selling shares of those about to reveal poor financial performance.
Many of these earnings reports were accessed via a server in Boston, according to prosecutors. Klyushin’s defense argued that he was financially successful before engaging in these activities and continued trading in the same companies even after losing access to the stolen insider information due to discovered hacks.
They emphasized Klyushin’s lack of prior criminal history and the significant consequences he and his company had already faced.
Klyushin’s company purported to provide services for detecting vulnerabilities in computer systems and boasted clients such as the administration of Russian President Vladimir Putin and the Ministry of Defense.
Additionally, one of his close associates and alleged co-conspirators, military officer Ivan Ermakov, remains at large after being charged in 2018 with hacking into key Democratic Party email accounts, including those of Hillary Clinton’s presidential campaign chairman and various Democratic organizations.