On the 15th of May, the founder of Skynet Market pleaded guilty to the charge of conspiracy to sell stolen financial information on the Dark Web.
As per official court records, Michael D. Mihalo, also known as Dale Michael Mihalo Jr., aged 40 and hailing from Naperville, was the originator of a darknet "carding" platform named Skynet Market. This platform was utilized for vending stolen financial data on the internet. Mihalo, operating under the pseudonym ggmccloud1, along with his accomplices, was a prominent vendor on various other darknet markets, including AlphaBay Market, Wall Street Market, and Hansa Market. These markets necessitated the use of digital currencies, such as Bitcoin, for conducting transactions. Between February 22, 2016, and October 1, 2019, Mihalo and his associates sold the pilfered financial data, primarily comprising credit and debit card numbers and associated information, of tens of thousands of U.S. citizens through these markets.
How did the group operate
Mihalo orchestrated and supervised a team that aided him in vending pilfered financial data on the darknet. Each of the accomplices profited from Mihalo's esteemed reputation as ggmccloud1 on the darknet platforms, which enabled them to peddle more stolen financial data than they could have individually. Taylor Ross Staats, a 40-year-old resident of Texas, colluded with Mihalo and other individuals to market stolen financial data on the internet. Staats functioned as a "card-checker," verifying that the financial data sold by Mihalo and others on various darknet sites remained active and had not been invalidated by the relevant financial institutions. Staats personally garnered a minimum of $21,000 worth of Bitcoin for these services.
Mihalo, with personal possession, transmission, and reception of information pertaining to 49,084 payment cards that were stolen, had the intention of trafficking the payment card information on darknet sites, thereby advancing the conspiracy. The sales of such information earned Mihalo a minimum of $1 million worth of cryptocurrencies, including Bitcoin, Ethereum, and Monero, which have since appreciated significantly.
Guilty plea and forfeiture
Mihalo has entered a plea of guilty to a single count of conspiracy to commit access device fraud, one count of access device fraud, and six counts of money laundering. The sentencing hearing has been deferred to a later date. The conspiracy count carries a maximum sentence of five years imprisonment, while each of the remaining counts carries a maximum sentence of 10 years imprisonment. The presiding federal district court judge will determine the appropriate sentence, taking into account the U.S. Sentencing Guidelines and other relevant statutory factors.
In accordance with the conditions outlined in his plea agreement, Mihalo is obligated to relinquish to the government any assets he acquired through his unlawful activities. These assets include a substantial sum of cryptocurrency, financial accounts, and real estate, with an estimated value of several million dollars. Additionally, Mihalo has consented to the imposition of a monetary judgment, the exact amount of which will be determined by the presiding judge at the time of sentencing.
Mihalo has become the second defendant to enter a plea of guilty in the present case. On December 14, 2022, Staats pleaded guilty to one count of conspiracy to commit access device fraud, in his capacity as a "card-checker" for Mihalo and the other co-conspirators. He is liable to a maximum sentence of five years in prison for the aforementioned conspiracy count and will be sentenced at a later date.
FBI Kansas City Field Office announcement
The case was investigated by the FBI Kansas City Field Office.
The prosecution of the case is being carried out by Senior Counsel Louisa Becker of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Matthew Blackwood for the Western District of Missouri. The Justice Department’s Office of International Affairs provided significant assistance.
The Justice Department expresses its gratitude to its law enforcement colleagues at the Royal Canadian Mounted Police in Canada for their assistance in this case.
The victim payment card information that was stolen during the course of the investigation has been, or will be, provided to the financial institutions that issued the payment cards. If you were active on Skynet Market, AlphaBay Market, Wall Street Market, or Hansa Market; have been in contact with any of Skynet Market’s administrators; or believe that your financial information may have been stolen and sold on any of these markets between February 22, 2016, and October 1, 2019, please file a report with the FBI’s Internet Crime Complaint Center (ic3.gov) and reference this press release.