Seven Arrested Internationally in $1.6 Million Stubhub E-Ticket Fraud

Officials from the United States, Canada and United Kingdom announced the arrests on Wednesday at a press conference by Manhattan District Attorney Cyrus Vance Jr in New York.

The suspects include a Russian national who was detained while vacationing in Spain, three others arrested in London, two in the United States and one in Canada, according to a press release issued by Vance.

The law enforcement action "reflects the increasingly global landscape in which financial and cyber criminals operate," Vance told reporters.

Vadim Polyakov, 30, the Russian who was arrested in Spain and is accused of being the ringleader, and Nikolay Matveychuk, 21, also of Russia, are charged with using stolen credit card numbers to buy more than 3,500 tickets.

They bought tickets to concerts featuring Elton John, Marc Anthony, Justin Timberlake, Jay-Z and other performers along with sporting events including Yankee, Giants, Jets and Rangers games as well as Broadway shows such as "The Book of Mormon."

(Also see: eBay's StubHub a Victim of Cyber-Fraud Ring; Arrests to Be Announced)

The tickets were purchased on StubHub, an online secondary marketplace owned by eBay .

The fraudulent purchases were done using credentials stolen in breaches of other sites, not by hacking into StubHub, StubHub spokesman Glenn Lehrman said.

Three Americans were indicted for re-selling the stolen tickets. Daniel Petryszyn, 28, of New York as well as Laurence Brinkmeyer, 29, and Bryan Caputo, 29, both of New Jersey, fenced the tickets on online sites such as StubHub, eBay, TicketsNow, Craigslist and occasionally in person at concerts themselves, Vance said.

At Polyakov's direction, the three men deposited the proceeds in multiple PayPal accounts and bank accounts in the United Kingdom and Germany, according to prosecutors.

One of these bank accounts belonged to Sergei Kirin, 37, a Russian who advertised his money-laundering services online, according to court documents. Polyakov told the three Americans to send payments to Kirin, who took a percentage as a fee, according to prosecutors.

StubHub said that it had been working with authorities on the case for about a year.

"Once fraudulent transactions were detected on a given account, affected customers were immediately contacted by StubHub's trust and safety team and refunded any unauthorized transactions," the company said in a statement.

Polyakov was tracked to a hotel in Barcelona on July 3 and arrested but has not yet been extradited. Petryszyn and Caputo were arrested on Wednesday. Brinkmeyer is expected to surrender in the coming days, Vance said.

Matveychuk and Kirin have not been apprehended.

The identities of the suspects arrested in London and Toronto for alleged money-laundering were not immediately available.

© Thomson Reuters 2014