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US – DOJ confirms arrest of Russian slot gang

By - 12 June 2017

The Department of Justice has confirmed that 33 members of a Russian crime syndicate have been arrested on a variety of charges including ‘efforts to defraud casinos in Atlantic City and Philadelphia by using electronic devices and computer servers to predict and exploit the behaviour of electronic slot machines.’

Known as Shulaya Enterprise, the gang also operated an illicit poker businesses in Brighton Beach and acted as loan sharks to gamblers who became indebted to the Shulaya Enterprise.The charge sheet states that casinos in Atlantic City and Philadelphia were targeted. The gang would capture slot-machine sequences with undefined ‘electronic devices’, and send them to remote servers that would calculate likely future sequences. Computer experts were then able to devise algorithms to beat the RNGs behind the slots.

Other charges included a variety of racketeering, fraud, narcotics, firearms, and stolen property offenses. There were also charges of the theft of cargo shipments, including a shipment containing approximately 10,000 pounds of chocolate confections. A female member of the Shulaya Enterprise to seduce men, incapacitate them with gas, and then rob them.

Acting Manhattan US Attorney Joon H. Kim said: “We have charged 33 members and associates of a Russian organized crime syndicate allegedly engaging a panoply of crimes around the country. The indictments include charges against the alleged head of this national criminal enterprise, one of the first federal racketeering charges ever brought against a Russian ‘vor.’ The dizzying array of criminal schemes committed by this organized crime syndicate allegedly include a murder-for-hire conspiracy, a plot to rob victims by seducing and drugging them with chloroform, the theft of cargo shipments containing over 10,000 pounds of chocolate, and a fraud on casino slot machines using electronic hacking devices. Thanks to the remarkable interagency partnership of FBI, CBP, and NYPD, we have charged and arrested 33 defendants allegedly involved in this criminal enterprise.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: “The suspects in this case cast a wide net of criminal activity, aiming to make as much money as possible, all allegedly organized and run by a man who promised to protect them. But that protection didn’t include escaping justice and being arrested by the agents and detectives on the FBI New York Eurasian Organized Crime Task Force. Our partnerships with other FBI field offices, the NYPD and CBP allows us to do everything we can to go after criminals who don’t believe the law applies to them.”

Acting CBP New York Director Leon Hayward said: “US Customs and Border Protection is extremely proud to have assisted our federal partners in this operation. It is through our interagency partnerships, and collaborative approaches like the one leading to today’s arrests, that law enforcement successfully combats modern criminal organizations.”

NYPD Commissioner James P. O’Neill said: “The Thief-in-Law allegedly established an extensive cross country criminal enterprise from Brighton Beach to Las Vegas that engaged in bribes, gambling, and murder for hire. Thanks to all whose work resulted in the arrest and indictment of 33 today.”

It is believed the slot scam was born in St Petersburg, Russia where another syndicate is believed to have studied slot machines made by four manufacturers and managed to unravel the secrets of the Random Number Generators on certain machines. Using mobile phones hidden in their top pockets, scouts would then collect video footage of slots in casinos that they were targeting and beam it back to St Petersburg where it was then studied and used to reverse engineer aspects of the machine’s RNG. Applications detail the RNGs were then downloaded onto phones which would vibrate when players should hit the slot button.

That gang is believed to have defrauded slots in at least 10 casinos in Missouri, California, and Illinois.

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