Jailed ChronoPay Co-Founder Denied Bail

A Moscow court on Monday denied bail for Pavel Vrublevsky, a Russian businessman who was charged earlier this year with hiring hackers to launch costly online attacks against his rivals. The denial came even after Vrublevsky apparently admitted his role in the attacks, according to Russian news outlets.

Vrublevsky in 2004

Vrublevsky, 32, is probably best known as the co-founder of ChronoPay, a large online payment processor in Russia. He was arrested in June after Russian investigators secured the confession of a man who said he was hired by Vrublevsky to launch a debilitating cyber attack against Assist, a top ChronoPay competitor. The former ChronoPay executive reportedly wanted to sideline rival payment processing firms who were competing for a lucrative contract to process payments for Aeroflot, Russia’s largest airline. Aeroflot’s processing systems faltered for several days in the face of the attack, an outage that Aeroflot says cost the company about a million dollars a day.

Vrublevsky’s lawyers asked the court to release him pending a trial in December — offering to pay 30 million rubles (~ USD $1 million) — but the court denied the request.

Vrublevsky co-founded ChronoPay in 2003 along with Igor Gusev, another Russian businessman who is facing criminal charges in Russia stemming from his alleged leadership role at GlavMed and SpamIt, sister programs that until recently were the world’s largest rogue online pharmacy affiliate networks. Huge volumes of internal documents leaked from ChronoPay last year indicate Vrublevsky co-ran a competing rogue Internet pharmacy — Rx-Promotion — although Vrublevsky publicly denies this.

Vrublevsky and Gusev have been locked in an increasingly heated and public battle to ruin the others’ business, a saga that I have chronicled in an ongoing series: Pharma Wars.

According to Russia’s Interfax news agency, Vrublevsky faces punishment under two articles of the state’s criminal code – illegal access to computer information, and the creation, use and dissemination of harmful computer programs. Both involve imprisonment for three to seven years.

Stanislav Maltsev

Russian newspaper Vedomosti writes that Vrublevsky’s guilty plea will be considered by the court as a mitigating circumstance, and that his sentence will not exceed five years. “And considering the fact that attacks on computer systems – a relatively new type of crime is not a particularly dangerous for the society, the term most likely will not exceed three years and may be conditional,” the publication notes.

The Vedomosti story also observes an interesting fact: One of the lawyers representing Vrublevsky is Stanislav Maltsev, whom Vrublevsky hired in 2007 to be his head of security. Prior to joining ChronoPay, Maltsev was a Russian MVD official in charge of leading an earlier criminal investigation against Vrublevsky, one that ultimately went nowhere.

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