Latvian Man Charged in Massive Gozi Computer Virus Scheme Pleads Guilty

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By Reuters

NEW YORK -- A Latvian man pleaded guilty on Friday to engaging in a scheme to transmit a computer virus that infected more than a million computers worldwide and caused tens of millions of dollars in losses. Deniss Calovskis, 30, pleaded guilty in federal court in Manhattan to conspiring to commit computer intrusion, admitting that he had been hired to write some of the computer code that made the so-called Gozi virus so effective. "I knew what I was doing was against the law," Calovskis said in court.

The plea followed Calovskis' extradition in February from Latvia, where he was arrested in November 2012 and held for 10 months in jail. Calovskis, who has been in U.S. custody since his extradition, agreed not to appeal any sentence of two years in prison or less. David Bertan, his lawyer, called it an "open question" whether Calovskis would receive credit for his time in custody in Latvia. Sentencing is scheduled for Dec. 14.

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The Gozi virus was discovered in 2007. It stole personal bank account information of computer users while remaining virtually undetectable. By the time U.S. authorities announced charges in 2013, more than a million computers worldwide had been infected, including at least 40,000 in the United States, over 160 of which belonged to the National Aeronautics and Space Administration.

The indictment against Calovskis was unsealed in January 2013 as prosecutors announced charges against Nikita Kuzmin, the virus' Russian creator, and Mihai Ionut Paunescu, a Romanian accused of running a service that enabled its distribution. Prosecutors said Kuzmin was the mastermind of the operation, conceiving of the virus in 2005 and running a business that rented out the virus to other cyber criminals intent on stealing money from banks.

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Prosecutors said Calovskis, who resided in Riga, Latvia, and went online as "Miami," helped develop code that increased the virus' effectiveness by altering the appearance of banks' websites, tricking victims into divulging their information. Kuzmin, who was originally arrested in 2010, secretly pleaded guilty in May 2011 as part of a cooperation agreement with prosecutors. Pauneschu was arrested in Romania in December 2012. His extradition remains pending, a spokesman for Manhattan U.S. Attorney Preet Bharara said.