CA man gets five years for defrauding trucking companies

| Monday, July 27, 2009

A Russian citizen living in California was recently sentenced to more than five years behind bars after he pleaded guilty to using a federal trucking database to defraud motor carriers.

Nicholas Lakes, also known as Dimitry Livshits, of Glendale, CA, was sentenced in federal court on June 20 to serve 70 months in prison. Lakes also will pay $2.9 million in restitution to victims and will forfeit a TD Ameritrade account worth $1.4 million.

Lakes and Viacheslav Berkovich, 34, of Los Angeles, both pleaded guilty to computer fraud and mail fraud in U.S. district court on Feb. 23. Berkovich is scheduled to be sentenced later this year.

In early 2007, Lakes and Berkovich hacked the Federal Motor Carrier Safety Administration’s Safety and Fitness Electronic Records System, or SAFER, and registered their own trucking and brokerage companies under the names Cargoland Brokerage Inc., Progressive Trucking, Vega Trucking and Barkfelt Transport.

The men then changed registration information, including e-mail addresses and phone numbers, for other truck and brokerage companies who already were registered in SAFER to “create the impression that the unrelated companies were affiliated with the defendants’ companies,” the federal indictment states.

Later, they posed as carriers on various Internet load boards, entered contracts with brokers to haul advertised loads, then double-brokered the loads to another carrier without telling the original load broker. Loads were booked, delivered and payments made to the defendants, though payments were never made to the companies who delivered the actual loads.

Prosecutors say the defendants pocketed at least $2.4 million from the scheme.

The Department of Transportation’s computer security has been criticized in a report by the DOT’s Office of Inspector General. The report detailed an annual audit of the agency’s security practices and compliance with security requirements.

In the report, the inspector general said the DOT isn’t complying with security guidelines – including privacy requirements – and that if information such as someone’s Social Security number was stolen, the department couldn’t ensure that the individual in question would be notified.

The report also said DOT employees don’t get adequate training in computer security.

– By Charlie Morasch, staff writer
charlie_morasch@landlinemag.com

 

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