Update on the Gery Shalon Case: New Investigations May Result in New Charges!

Gery Shalon with Veltyco Group Uwe Lenhoff and Dirk-Jan Bakker
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In a dramatic unraveling that has captured the attention of the global financial cybercrime crime scene, Gery “Gabi” Shalon, a Georgia-born Israeli citizen, stands as a significant figure. Charged in a 23 count Indictment by U.S. prosecutors on November 9, 2015, Shalon’s alleged crimes span computer hacking, securities fraud, aggravated identity theft, illegal online gambling, illegal money transmitting business, and money laundering.

The Plea and Cooperation

Shota Shalelashvili confronted with FinTelegram reports
Shota Shalelashvili was questioned over FinTelegram reports

By April 2017, Gery Shalon had pled guilty to all charges, striking a plea deal with prosecutors that led to the forfeiture of all seized funds and assets—a substantial fortune, including a $74.7 million bank account.

Read more about the forfeiture agreement with Gery Shalon here.

According to Bloomberg, Shalon pled guilty in 2017 in a “sealed courtroom” in return for a significantly more lenient sentence than his co-conspirators. It probably didn’t hurt Shalon that his father, Shota Shalelashvili, was a high-ranking Georgian politician until 2021.

This case has notably been called the largest hacking case ever uncovered by federal prosecutors in Manhattan. It involved the theft of information from over 100 million customers across a dozen U.S. companies.

Shalon’s cybercrime network, active between 2011 and 2015, was sophisticated. It utilized 75 front companies and involved a hacking scheme with 30 false passports from 17 different countries. His operations, described as setting new criminal standards, generated “hundreds of millions of dollars in illicit proceeds,” some of which was stashed in Swiss accounts, among other locations.

Current Status

After a period of house arrest in New York, Shalon returned to Israel around 2022 or 2023 under undisclosed circumstances, with no public sentencing. His full cooperation with U.S. law enforcement has been pivotal in this unusual legal journey, leading to the arrest and conviction of accomplices, including the Russian Andrei Tyurin, who was sentenced to 144 months in prison over his role in Shalon’s cybercrime organization.

European and Russian Connections

Cybercrime billionaire Gery Shalon and his network

Despite the U.S. focus, Shalon’s activities extended significantly into Europe. Under his directive, Israeli partner Gal Barak established the E&G Bulgaria cybercrime organization, which operated numerous scams through illegal boiler rooms across several countries. The network facilitated massive fund laundering, notably through ING’s Dutch subsidiary, Payvision.

Moreover, Shalon continued to coordinate with his network, including the notorious Russian spammer Vladislav “Vlad” Smirnov, even after his arrest and extradition to the United States in 2015. His father’s political status in Georgia as a deputy leader of the ruling party until 2021 has also raised questions about potential influences on legal proceedings.

Gal Barak was sentenced to four years in prison in Austria in September 2020. He was ordered to make restitution payments of more than €4 million, which he has not yet paid. After his release from prison in Austria, Barak returned to Israel where he set up a fund to finance projects of convicted cybercrime activists. Barak’s lieutenants have also been sentenced to long prison terms in other jurisdictions.

Barak could also be charged in other jurisdictions. The German public prosecutor Nino Goldbeck wants to bring charges against Barak after an appeal by Barak’s lawyer to the European Court of Justice (ECJ) was rejected. In the event of an indictment, Barak could be sentenced again to several years in prison. We do not know whether his principal, Gery Shalon, will also be charged in this case.

Legal Implications and Ongoing Investigations

The secretive nature of Shalon’s case and his extensive cooperation with U.S. authorities suggest a complex web of legal and diplomatic maneuvering. His ongoing activities during house arrest and the implications of his interactions with European law enforcement highlight the multifaceted challenges in tackling international cybercrime.

Preliminary Conclusion

Gery Shalon’s case epitomizes the intricate and often hidden battles in the world of cybercrime. As investigations continue, particularly in Europe, the full scope of his influence and the effectiveness of his cooperation with authorities remain critical points of interest for law enforcement and legal experts worldwide.

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