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How the Government Proved Their Case against John Podesta’s Hacker

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We’re almost seven years past the hack of the DNC, and self-imagined contrarians are still clinging to conspiracy theories about the attribution of that and related hacks. In recent weeks, both Matt Taibbi and Jeff Gerth dodged questions about the attribution showing Russia’s role in the hack-and-leak by saying that the Mueller indictment of twelve GRU officers would never be tested in court (even while, especially in Gerth’s case, relying on unsubstantiated claims in John Durham indictments from his two failed prosecutions).

And while’s it’s likely true that DOJ will never extradite any of those twelve men to stand trial, DOJ did successfully convict one of their co-conspirators on a different hack: the hack-and-trade conspiracy involving Vladimir Klyushin and accused John Podesta hacker, Ivan [Y]Ermakov.

(The Mueller indictment and Ermakov’s second US indictment, for hacking anti-doping agencies, transliterated his name with a Y, the Boston one does not.)

That trial provides a way to show how DOJ would prove the 2018 indictment if one of the twelve men charged ever wandered into a jurisdiction with an extradition treaty with the US.

As laid out at trial, between 2018 and 2020, the co-conspirators hacked two securities filing agencies, Toppan Merrill and Donnelly Financial, to obtain earnings statements in advance of their filing, then traded based off advance knowledge of earnings. Klyushin was one of seven people (two charged in a separate indictment, three who were clients of Klyushin’s company M-13) who did the trading. Ermakov didn’t trade under his own name. He may have been compensated for Klyushin’s side of the trades with a Moscow home and a Porsche. But at least as early as May 9, 2018, forensic evidence introduced at trial shows, an IP address at which Ermakov’s iTunes account had just gotten updates was used to steal some of the filings.

Ermakov did not show up in a courtroom in Boston to stand trial and Klyushin has launched a challenge to his conviction that rests entirely on a challenge to venue there. But the jury did convict Klyushin on the hacking charge along with the trading charges, meaning a jury has now found DOJ proved Ermakov’s hacking beyond a reasonable doubt.

And they did it using the same kind of evidence cited in the Mueller indictment.

The crime scene

Start with the crime scene: the servers of the two filing agencies victimized in the hack-and-trade, Toppan Merrill and Donnelly Financial.

According to the trial record, neither figured out they had been hacked on their own. As the FBI had tried to do for months beforehand in the case of the DNC, a government agency, the SEC, had to tell them about it. The SEC had seen a number of Russians making big, improbable stock trades from clients of the two filing agencies, all in the same direction, and wanted to know why. So it sent subpoenas to both companies.

As the DNC did with CrowdStrike in 2016, both filing agencies hired an outside incident response contractor — Kroll Cyber in the case of Toppan Merrill, Ankura in the case of Donnelly Financial — to conduct an investigation.

The lead investigators from those two contractors were the first witnesses at trial. Each explained how they had been brought in in 2019 and described what they found as they began investigating the available logs, which went back six months, a year, and two years, depending on the type and company. The witness from Kroll described finding signs of hacking in Toppan Merrill’s logs:

The Ankura witness described how they first found the account of employee Julie Soma had been compromised, then used the IP addresses associated with that compromise to find other employees whose accounts were used to download reports or other unauthorized activity.

In sum, the two incident response witnesses described providing the FBI with the forensic details of their investigation — precisely the same thing that CrowdStrike provided to FBI from the DNC hack. There’s not even evidence that they shared a full image of the filing agencies’ servers (though an FBI agent described going back to Donnelly to search for the domain names behind the intrusions that Kroll had found at Toppan Merrill), which was one of the first conspiracy theories about the DNC hack Republicans championed: that the FBI failed to adequately investigate the DNC hack because it didn’t insist on seizing the actual victim servers during the middle of an election.

The forensic evidence wasn’t the only evidence submitted at trial from the crime scene. One after another of the employees whose credentials had been misused testified. Each described why they normally accessed customer records, if at all, how and when they would normally access such records, and from what locations they might access corporate servers remotely, including their use of the corporate VPN. Julie Soma — the Donnelly employee whose credentials were used most often to download customer filings — described that she would never have done what was done in this case, download one after another filing from Donnelly customers in alphabetical order.

Q. Would you ever go from client to client and alphabetically access those types of documents?

A. No.

Both interview records from the Mueller investigation (one, two, three) and documents from the Michael Sussmann case show that the FBI did similar interviews in the DNC hack. The Douglass Mackey trial, too, featured witnesses describing how the Hillary campaign identified that attack on the campaign as well.

In proving their case against John Podesta’s hacker, DOJ presented witness testimony that eliminated insiders as the culprit.

Fingerprinting

Having established the forensic data tied to intruders through the incident response contractors, prosecutors then called FBI agents as witnesses to describe how — largely through the use of IP addresses obtained using subpoenas or pen registers and the materials found in the suspects’ iCloud accounts — they tied Klyushin’s company, M-13, to both the hacking and the trading.

The trading was fairly easy: the co-conspirators accessed the two online brokers used to execute the trades under their own names and from IP addresses tied to M-13. An SEC witness described in detail how trades always shortly followed hacks but preceded the public filing of earnings statements.

Tying M-13 to the hacking took a few more steps.

For the hacking conducted via the domains Kroll identified, the FBI first found the account that registered the domains. Each was registered under a different name, but each of the names were based on a Latvian-based email service and used similar naming conventions. Each had been accessed from the same set of 3 IP addresses.

For IPs that Kroll identified, the FBI found BitLaunch servers created by an account in the name of Andrea Neumann, which was controlled from one of the same IP addresses that had registered the domain names. The FBI got search warrants to obtain images of those BitLaunch servers.

Another IP address used to steal filings, several FBI agents explained, was from an Italian-run VPN, AirVPN. The FBI used a pen register to show that someone accessed AirVPN from the M-13 IP address during the same period when the AirVPN IP was stealing records from the filing companies. The FBI also showed that Klyushin had accessed his bank at the same time from that same IP address. The FBI also showed that eight common IP addresses had accessed Ermakov’s iTunes account and the AirVPN IP address (in this case, the access was not at the same time because the FBI only had a pen register on the VPN for two months in 2020). While FBI witnesses couldn’t show that the specific activity tied to an AirVPN IP at the victim companies tied back to M-13, they did show that both Klyushin and Ermakov routinely used AirVPN.

Plus there were the filing thefts — noted above — that were done on May 9, 2018 using the same IP address that, four minutes earlier, had downloaded an Apple update from Ermakov’s iTunes account. As I’ve noted repeatedly, before Ermakov was first indicted by Mueller, he had already left a smoking gun in the servers at Donnelly in the form of IP activity that the FBI obtained over a year later inside the US.

In fact, much of the evidence used to prove this case (particularly establishing the close relationship between the conspirators) came from Apple, including WhatsApp chats saved in Klyushin and other co-conspirators’ iCloud accounts. We know Mueller used the same source of evidence. In March of this year, emails stolen by hacktivists revealed, Apple informed another of the GRU officers charged in the DNC hack that the FBI had obtained material from his Apple account in April 2018, in advance of the Mueller indictment.

The indictment likely also relied on warrants served on Google, especially on Ermakov’s account. The Mueller indictment (as well as the later anti-doping one) attributes much of the reconnaissance conducted in advance of the hacks to Ermakov: the names of some victims; information on the DNC, the Democratic Party, and Hillary; how to use PowerShell (which would be used against Toppan Merrill); and CrowdStrike’s reporting on GRU tools. If he did this research via Google, it would all be accessible with a warrant served on the US tech company.

The getaway car

One pervasive conspiracy theory about the Mueller indictment stems from testimony that Shawn Henry gave to the House Intelligence Committee in December 2017, describing that Crowdstrike did not see the data exfiltrated from the DNC servers. Denialists claim that is proof that the information was never exfiltrated by the GRU hackers. The conspiracy theory is ridiculous in any case, since there were so many other Russian hacks involving so many other servers, including servers run by Google and Amazon that had a different kind of visibility on the hack (something that Henry alluded to in his testimony), and since the indictment describes that the DNC hackers destroyed logs to cover their tracks.

But the Klyushin trial featured testimony about a tool used in the hack-and-trade conspiracy that has a parallel in the DNC hack: the AMS panel, hidden behind an overseas middle server, which the Mueller indictment described this way:

X-Agent malware implanted on the DCCC network transmitted information from the victims’ computers to a GRU-leased server located in Arizona. The Conspirators referred to this server as their “AMS” panel. KOZACHEK, MALYSHEV, and their co-conspirators logged into the AMS panel to use X-Agent’s keylog and screenshot functions in the course of monitoring and surveilling activity on the DCCC computers. The keylog function allowed the Conspirators to capture keystrokes entered by DCCC employees. The screenshot function allowed the Conspirators to take pictures of the DCCC employees’ computer screens.

[snip]

On or about April 19, 2016, KOZACHEK, YERSHOV, and their co-conspirators remotely configured an overseas computer to relay communications between X-Agent malware and the AMS panel and then tested X-Agent’s ability to connect to this computer. The Conspirators referred to this computer as a “middle server.” The middle server acted as a proxy to obscure the connection between malware at the DCCC and the Conspirators’ AMS panel. On or about April 20, 2016, the Conspirators directed X-Agent malware on the DCCC computers to connect to this middle server and receive directions from the Conspirators.

[snip]

For example, on or about April 22, 2016, the Conspirators compressed gigabytes of data from DNC computers, including opposition research. The Conspirators later moved the compressed DNC data using X-Tunnel to a GRU-leased computer located in Illinois.

In the hack-and-trade conspiracy, the hackers set up a similar structure, using the servers given names like “developingcloud” and “finshopland” as reverse proxies, with a final server behind them all executing orders on the hacked servers at Toppan Merrill (and the implication is, Donnelly, though the forensics came from Toppan Merrill via Kroll). The “computers numbered 1 through 7” in what follows are the servers identified by Kroll stealing earnings filings from Toppan Merrill.

A. So this is a digital depiction of the servers that I examined on the right there, so they each have a number on them, 1 through 9.

Q. Let me focus you first on the computers numbered 1 through 7. Do you see them there?

A. Yes.

Q. Are they kind of in a sideways V configuration?

A. Yes.

Q. Okay. And what do computers 1 through 7 show on this Exhibit DDD?

A. They functioned as gatekeepers for the furthest machine to the right, server number 8.

Q. And when you say “gatekeeper,” is there a technical term for that?

A. Yes. So the technical term is a “reverse proxy.”

Q. Can you explain to the jury, in a easy for me to understand way, what a reverse proxy or gatekeeper is in this chart, 1 through 7.

A. Yes. So in this chart, it would function — so the seven that are in that V formation, they would pass traffic to server number 8, if it was coming from an infected machine; and if it was something else, it would send the traffic to some other website.

This structure would have made it impossible for Toppan Merrill to understand the source or function of the anomalous traffic on its servers because any attempt to do so would be redirected away from the control server.

But not the FBI, because they obtained images of the servers with a warrant.

The forensic witness describing this structure showed, command by command, that the forensic clues identified by Kroll on the Toppan Merrill servers were controlled via that final server running PowerShell (the same tool that Mueller alleged Ermakov researched during the DNC hacks in 2016).

Q. And is there something on this log that you found that tells you the name of the program that was running on the victim’s computer at Toppan Merrill?

A. Yes, the process name line, and that reads rdtevc.

Q. And is process another name for computer program?

A. Yes.

Q. So this is a log that shows that a program named RDTEVC was running on a Toppan Merrill computer, right?

A. Yes.

Q. But it’s stored in the hacker computer?

[snip]

Q. And what does PowerShell do? You can call it anything, right? You can call it RDTEVC?

A. That’s probably a randomly chosen name.

Q. But no matter what it’s called, what does it do?

A. So it allows it to be remotely controlled and accessed.

Q. Allows what to be remotely controlled and accessed?

A. The infected machine.

The same forensic expert explained that he didn’t find any downloads of stolen files.

But he also explained why.

He had also found secure tunnels, readily available but similar in function to a proprietary GRU tool Crowdstrike found in the DNC server. As he described, these would be used to transfer data in encrypted form, making it impossible to identify the content of the data while it was in transit.

Q. Mr. Uitto, are you familiar with the concept of exfiltration?

A. Yes.

Q. Big word, but what does it mean?

A. It means to steal data, take data.

Q. And in your review, did you find evidence — you told Mr. Nemtsev you didn’t find evidence of the taking of data from the victim computers to these particular hacker servers; is that right?

A. That’s right, but I did see secure tunnels that were created.

Q. So when you say there were secure tunnels, were you able to tell what was going through those secure tunnels?

A. No.

Q. Those were encrypted, right?

A. Yes.

Q. So you actually don’t know whether or not there was financial information in those tunnels?

A. That’s correct.

Q. Or sports scores or anything?

A. That’s correct.

Q. It’s encrypted.

A. Yes.

[snip]

Q. What role does encryption serve in this hacker architecture?

[snip]

A. Yes, so it can be used to hide data or information.

Q. So if it’s encrypted, we can’t know what’s being passed?

To prove the hack, you would have to — and FBI did, in both cases — prove that the stolen data made it to the end point.

This testimony is important for more than explaining where you’d need to look to find proof of a hack (at the end points). It shows the import of understanding not just the crime scene and those end points, but the infrastructure used to control the hack and exfiltrate the data. With both the hack-and-trade conspiracy and the hack of the DNC, the FBI got forensics about the victim from the incident response contractors, but they obtained the data from these external servers directly, with warrants.

The denialists looking for proof in the DNC server were focused on just the crime scene, but not what I’ve likened to a getaway car, one to which the FBI had direct access but Crowdstrike did not.

Follow the money

Another specialized kind of fingerprint prosecutors used to prove the case against Klyushin parallels the one in the Mueller indictment (and, really, virtually all hacking cases these days): the cryptocurrency trail. As the Mueller indictment explained, the hackers who targeted the DNC used the same cryptocurrency account to pay for different parts of their infrastructure, thereby showing they were all related.

The funds used to pay for the dcleaks.com domain originated from an account at an online cryptocurrency service that the Conspirators also used to fund the lease of a virtual private server registered with the operational email account [email protected]. The dirbinsaabol email account was also used to register the john356gh URL-shortening account used by LUKASHEV to spearphish the Clinton Campaign chairman and other campaign-related individuals.

[snip]

For example, between on or about March 14, 2016 and April 28, 2016, the Conspirators used the same pool of bitcoin funds to purchase a virtual private network (“VPN”) account and to lease a server in Malaysia. In or around June 2016, the Conspirators used the Malaysian server to host the dcleaks.com website. On or about July 6, 2016, the Conspirators used the VPN to log into the @Guccifer_2 Twitter account. The Conspirators opened that VPN account from the same server that was also used to register malicious domains for the hacking of the DCCC and DNC networks.

By following the money, prosecutors were able to show the jury how these pieces of infrastructure fit together.

In the case of the hack-and-trade, the conspirators did nothing fancy to launder the cryptocurrency used in the operation. The servers obtained in the name of Andrea Neumann were paid using three successive cryptocurrency accounts, each with different names but accessed from the same IP address. The third name was Wan Connie. An interlocked Wan Connie email account had been accessed from M-13’s IP address. So while the cryptocurrency itself couldn’t tie the conspirators to the hack, the interlocked infrastructure did.

The conspiracy

To prove the hack, prosecutors at trial showed how the FBI had used evidence from the crime scene, the “getaway” car, the money trail, and evidence obtained at the end point from iCloud accounts to tie the hack back to Ermakov personally and M-13 more generally. The biggest smoking gun came from matching the IP addresses to which Ermakov got his iTunes updates to the infrastructure used in the hack (or, in the case of the May 9, 2018 thefts, directly to someone exploiting Julie Soma’s stolen credentials.

All that was left in the Klyushin case was proving the conspiracy, showing that Klyushin and others had used this stolen information to make millions by trading in advance of earnings announcements. This would be the functional equivalent of tying the records stolen from Democrats (and some Republicans) to their release via Guccifer 2.0, dcleaks, and WikiLeaks.

At Klyushin’s trial, the government proved the conspiracy via two means: an SEC analyst presented a bunch of coma-inducing analysis showing how the trades attributed to online brokerage accounts that Klyushin and others had in their own names lined up with the thefts. The analyst explained that odds of seeing those trading patterns would be virtually impossible.

More spectacularly, prosecutors introduced Klyushin’s role with a bunch of pictures establishing that he was “besties” with Ermakov (and, eventually, that there were unencrypted and encrypted communications, along with a picture of Klyushin’s yacht, sent via Ermkaov to two guys in St. Petersburg who didn’t work for M-13 but who were making the same pattern of trades); I looked at some of that evidence here. One picture found in Klyushin’s account showed Ermakov, crashed on a chair, wearing an M-13 sticker, taken in the same period as some of the logs provided by Kroll showed hacking activity. About the only thing the FBI found in Ermakov’s iCloud account was the online brokerage account used to execute the insider trading, in Klyushin’s name, but that tied him to the trading side of the conspiracy.

As their trades began to attract attention, Ermakov and another M-13 employee attempted to craft cover stories, evidence of which prosecutors found via Apple. Prosecutors even introduced Threema chats in which Ermakov told Klyushin, his boss, not to share details about their trading clients or he might end up a defendant in a trial.

He did.

And at that trial, prosecutors were able to prove a hacking conspiracy against Klyushin using evidence and victim testimony from the crime scene, but also from other data readily available with a subpoena or warrant inside the US.

Update: Tweaked language describing secure tunnels.

“That’s How … You End Up as a Defendant in a Court Room:” Some Days in the Life of a Named-and-Shamed Former GRU Hacker, Ivan Ermakov

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In early 2018, Ivan [Y]Ermakov,* one of the hackers alleged to have stolen John Podesta’s emails two years earlier, was living it up.

For his April 10 birthday that year, he went on a stunning heli-ski trip with his future co-conspirator, Vladislav Klyushin (Ermakov is on the left in this picture, Klyushin, on the right and in the Featured Image picture).

In summer 2018, they were enjoying the Sochi World Cup together, too.

Just days after this trip to Sochi, however, on July 13, 2018, Robert Mueller would indict Ermakov, along with eleven of his former GRU colleagues, for hacking the DNC, DCCC, Hillary Clinton, election vendors, and registration websites, as well as orchestrating the release of the stolen files.

By the time of that first indictment against him — the first of three known indictments against the Russian hacker so far — Ermakov had already made one of the fatal slip-ups that would form part of the proof against Klyushin at trial, this time for a hack-and-trade scam. On May 9, 2018, Yermakov received three updates from his Apple iTunes account to the IP address 119.204.194.11. Just four minutes later, someone using that IP address downloaded an SEC filing using credentials stolen from a Donnelly Financial employee named Julie Soma. That download occurred hours before the report would be publicly filed with the SEC, one of dozens of such thefts of SEC filings that formed the basis of the hacking and securities fraud charges against the men.

So months before Mueller’s indictment alerted Ermakov that the FBI had discovered who he was and that they believed he was one of the hackers behind the 2016 hack, he had already left proof in US-based servers that would tie to him to a follow-up crime, the hack-and-insider trading conspiracy for which Klyushin was convicted in February.

Klyushin has challenged the verdict, largely based on a technical challenge to the venue of the charges in Massachusetts.

Per trial testimony, Ermakov left those tell-tale forensic tracks four months before Klyushin would first get involved in the hack-and-trade scheme, in August 2018. The scheme was doomed from the start — at least, it would be doomed if any of the identified co-conspirators traveled to a jurisdiction that would extradite to the US, as Klyushin did in March 2021.

In fact, there’s something curious about that.

One thing submitted as evidence at trial was a picture of a May 22, 2017 Reuters article reporting the US sentence for Ukrainian hacker Vadym Iermolovych, one of ten people prosecuted for a hack-and-trade conspiracy similar to the one for which Klyushin was convicted.

According to the FBI agent who introduced the exhibit, the picture itself was taken in August 2018. Someone printed out the article and packaged it up in a plastic folder over a year after the fact. That suggests Klyushin was in discussion with a very well-connected friend about the possibility of such charges in the same month that Klyushin first got involved in the scheme.

The possibility of prosecution hung over the conspiracy from the start.

Thanks to Klyushin’s promiscuous storage of damning evidence in his iCloud account, from which many of the pictures and chats in this post were obtained by the FBI, the Klyushin case offers an unprecedented public glimpse into the effect that US indictments against nation-state hackers like Ermakov might have on one of the target’s lives. In Ermakov’s case, it didn’t stop him from hacking US targets. Indeed, it’s possible that others used the indictments to pressure Ermakov to use his hacking skills for them.

Since 2014, DOJ has been indicting nation-state hackers in what have always been assumed to be name-and-shame documents, indictments that would never lead to trial. Indeed, that’s what the two earlier indictments of Ermakov have always been assumed to be: a public accusation that would never lead to Ermakov’s imprisonment. The wisdom of indicting nation-state hackers has never been obvious. Yevgeniy Prigozhin’s exploitation of his own name-and-shame indictment has revealed the potential perils of the policy. And Russian denialists brush off the July 2018 indictment charging Ermakov and others with the election year hack (as Matt Taibbi did in his recent congressional testimony), arguing that since the indictment will never be tested at trial, it could be mere government propaganda.

At least in the case of the 2016 Russian operation, the indictment has done little to persuade denialists, who simply refuse to read about the many places where the hackers left evidence.

In a follow-up, I’ll show how DOJ proved their case against Klyushin using the same kind of evidence they used in the earlier indictments against Ermakov and his colleagues, largely metadata and content obtained from US-based and a few foreign servers. DOJ may never get a chance to prove the first two indictments against Ermakov, but using the same investigative techniques, they did prove the case against Ermakov’s co-conspirator, Klyushin.

This case, where a sealed complaint ultimately led to the trial of one co-conspirator of a hacker previously charged, also provides a glimpse of what happened after one nation-state hacker got name-and-shamed in the US.

It’s not clear from the trial record when Ermakov left the GRU or who his formal employer was before he joined Klyushin’s M-13, an information services company with ties to Putin’s office that offered, among its services, pen testing.

The FBI found a contact card for Igor Sladkov, with whom Ermakov may have started the hack-and-trade scheme at least as early as October 2017, in Ermakov’s own iCloud account, one of the only interesting pieces of evidence they found there. It was dated November 16, 2016, just over a week after Donald Trump got elected with Ermakov’s help. Sladkov — whose iCloud OpSec was just as shoddy as Klyushin’s — had a bunch of photos of Ermakov in his iCloud account, including the hacker’s passport, a 2016 picture of Ermakov sitting before an enormous plate of some animal flesh, and a picture from Ermakov’s 2018 ski trip, as well as a picture of Klyushin’s yacht that Ermakov had shared.

Before trial, Klyushin’s team argued that Ermakov never worked for Klyushin’s company, bolstering the claim with a chat from May 2019 in which Ermakov bitched about his job to Klyushin and a certificate from the Russian tax service claiming that [Y]Ermakov never worked at M-13.

But days after that chat, per another pre-trial filing, Ermakov spoke longingly of being able to travel like Klyushin could. Klyushin responded that he would get Ermakov new identity papers so the two could travel to Europe together, but not — Klyushin conceded — London or America. Klyushin seemingly used that discussion as background to press Ermakov to get back to work, with the implication being he should get back to the hack-and-trade scheme.

That is, Ermakov appears to have included Klyushin in the hack-and-trade scheme while still working for someone else. And Klyushin seems to have used his promise to help Ermakov mitigate the risks created by those earlier indictments to pressure Ermakov to keep hacking. If that’s right, the vulnerability created by the earlier indictments gave Klyushin leverage to get Ermakov to keep hacking.

But Ermakov did eventually join M-13, at least informally. The government introduced an M-13 employee list reflecting Ermakov’s participation in specific project at trial. And they submitted a picture, from December 2019, showing Ermakov with an M-13 sticker, within days of the time when a staging server similar to the one used in the 2016 hack of the Democrats was set up.

Klyushin may have even incorporated Sladkov into M-13. The FBI found a proposal for a data analysis service, dated September 4, 2019, which M-13 would introduce on October 28, 2020, as well as encrypted communications from an M-13 chat application, in Sladkov’s iCloud account.

Klyushin fought hard to exclude one of the most telling pieces of evidence that the hacking scheme came to be tied to M-13 — the four Porsches that, Klyushin bragged to an investor, he had bought for himself, Ermakov, and one other co-conspirator with the proceeds of the insider trading.

But this currency — expensive gifts — seems to have been at least part of the way Erkamov was compensated for his role in the scheme.

Ermakov did not engage in any trading himself. Instead, two men in St. Petersburg, two associated with M-13 (including Klyushin himself), and three clients of M-13, profited off documents [Y]Ermakov seems to have stolen.

But in addition to the Porsche, on August 17, 2020, ten days before the delivery of the Porsches, Ermakov took possession of a Moscow house worth millions, the loan agreement for which Klyushin reportedly ripped up. Months earlier, Klyushin had tied paying for the house with continued hacking — which, Klyushin joked, amounted to just turning on the computer and thinking about making money.

Ermakov was effectively printing money for Klyushin, and his reward was that house.

In September 2020, the hack-and-trade scheme would be shut down for good.

Throughout the time it was going, however, those co-conspirators knew of the indictment against Ermakov. Sladkov downloaded Ermakov’s wanted poster from the FBI website on October 5, 2018, just a day after Ermakov was charged in the 2016 hack-and-leak of anti-doping agencies while Ermakov was still a GRU officer.

And on October 4, 2020, Klyushin took a screencap of Ermakov’s wanted poster from the FBI website.

By the time Klyushin took this screencap, the victim filing agencies had finally shut down Ermakov’s access to the site, after eight months of trying. Perhaps Klyushin was contemplating what that would mean or how it had happened? According to trial evidence, DOJ didn’t identify the hack-and-trade scheme by tracking what Ermakov was doing. Rather, the investigation started when the SEC started tracking some large-scale trading by a bunch of Russians together, then asked the filing agencies if they had been hacked. At least according to the public record, the involvement of Ermakov was disclosed only after working backwards from the forensic evidence. But in October 2020, Klyushin may have considered the risks of entering into a hack-and-trade scheme with a hacker whose habits were already known within the FBI.

By then it was too late. Indeed, Ermakov had already warned his boss about his shoddy OpSec. On July 18, 2019, Kluyshin asked Ermakov and the other M-13 co-conspirator Nikolai Rumiantcev how the hack-and-trade was going. He included pictures of two of the M-13 investors. In response, Ermakov warned his boss that that kind of OpSec is the kind of thing that would land him as a defendant in a courtroom.

Q. Okay, thank you. And now can we move to 3980, please. And this date is?

A. This is July 18 of 2019.

Q. Would you begin with 3980.

A. “Vladislav Klyushin: So what did we earn today?”

Q. And then there’s an attachment?

A. Correct.

Q. And then he says what?

A. Ermakov responds: “About 350 and another 350 in the mind. Sasha the most among the rest. “Klyushin: Our comrades are wondering.”

MR. FRANK: Could we stop right there, and I realize it’s hard, Ms. Lewis, because we’re in the Excel, but could you please display Exhibits 52 and Exhibit 50.

Q. Those are the attachments, Special Agent. Have you had an opportunity to review those?

A. Yes.

Q. Who’s depicted in Exhibits 52 and 50?

A. On the left, 52 is Sergey Uryadov. On the right is Boris Varshavksiy in Exhibit 50.

MR. FRANK: I offer 52 and 50. (Exhibits 50 and 52 received in evidence.)

Q. Okay. So those are the two attachments Mr. Klyushin has just transmitted in the chat?

A. Yes.

Q. Can we go back to the chat and pick up where we left off. So Mr. Klyushin says, “What did we earn today? Our comrades are wondering.” Could you continue, please, at 3987.

A. After sending those pictures we just looked at, Ermakov replies: “Vlad, you are exposing our organization. This is bad.” Nikolai Rumiantcev: Vlad, stop sending to Threema.” Klyushin replies, “So sorry.” “Ermakov: And that’s how they get you and you end up as a defendant in a courtroom.”

Q. How does Mr. Klyushin respond?

A. Klyushin responds, “Removed. Open a chat with us already. “Ermakov: Go ahead and create. It was a bad move now. “Klyushin: Sorry. Did a dumb thing. “Rumiantcev: I suggest to recreate the chat with the deletion of attachments in Threema, or switch to ours if ready. “Klyushin: I will delete this one on my end.”

Klyushin did delete this chat. Rumiantcev left it in his iCloud account, where the FBI found it.

At the time, the men appear to have been shifting their trading discussions to the encrypted M-13 chat application found in all their iCloud accounts, finally taking measures to cover their tracks going forward, over eighteen months into the hack-and-trade conspiracy. Going forward, those working with Ermakov might not exhibit the kind of abysmal OpSec that produced abundant trial evidence against his co-conspirator. Maybe they learned their lesson, and they’ll be able to exploit Ermakov’s skill more safely going forward.

It remains to be seen whether the prosecution of Klyushin, with his ties to high even higher ranking Russians, does more than hold him accountable for millions in fraudulent trades. But that may have little effect on the life of John Podesta’s suspected hacker.

* The government has used two different transliterations for [Y]Ermakov’s last name. In 2018, they used the one that aids in pronunciation. In 2021, they used the direct transliteration from the Cyrillic. Because evidence submitted at Klyushin’s trial uses the initials “IE” to refer to Ermakov, I’ll adopt that spelling here.