Cyber Criminal Pleads Guilty to Attempting to Steal More Than $3 Million From A Financial Institution and Government Agencies

Earlier today, in federal court in Brooklyn, Dwayne C. Hans pleaded guilty to one count of wire fraud and one count of computer intrusion.  The charges arise from a series of frauds that Hans masterminded between July 2015 and October 2016, including by masquerading as an authorized representative of a U.S. financial institution and as a defense contractor.  Hans also accessed a website run by the U.S. General Services Administration (GSA) without authorization and then redirected money intended for the financial institution to his own bank account.  The guilty plea took place before United States Magistrate Judge Roanne L. Mann.

Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty plea.

According to court filings, between July 2015 and December 2015, Hans submitted bids to the Defense Logistics Agency (DLA), an agency within the United States Department of Defense, for contracts in the name of two different companies he created.  Hans falsely claimed that those companies had numerous employees and were capable of filling the contracts.  The contracts on which Hans bid related to the provision of various items to the DLA, including electrical measurement equipment.  In reality, the companies had no employees and no ability to service the contracts.  The DLA awarded at least 52 contracts, worth approximately $533,209.70, to Hans’s two companies and sent at least $11,999.32 to those companies.

In early 2016, Hans created numerous bank accounts in the name of a U.S. financial institution (Financial Institution 1).  In April 2016, Hans accessed a website maintained by the GSA that allowed companies that worked with the U.S. government to provide information about how the government should disburse money to those companies.  Hans modified payment information in an entry associated with Financial Institution 1 in order to redirect payments to accounts he controlled.  As a result, a U.S. government agency transferred approximately $1.521 million to Hans instead of to Financial Institution 1.  Those transfers were ultimately detected and disrupted before the defendant withdrew or transferred the money.

In addition, between April 2016 and June 2016, Hans used a computer to initiate electronic transfers of approximately $134,000 from two corporate bank accounts held by Financial Institution 1.  Hans directed these fund transfers for various purposes, including to purchase publicly traded stock, to invest in real estate in Brooklyn, New York, and to pay utility bills.

Finally, between June 2016 and October 2016, Hans accessed a website maintained by the Pension Benefit Guaranty Corporation (PBGC), a U.S. government agency that insures certain pension plans, through which the administrators of pension plans could submit claims for reimbursements.  Hans, who was not the administrator of any pension plan, created an account on the PBGC website and then submitted requests to be reimbursed a total of $1.633 million for expenses related to three pension plans.  The three plans for which Hans requested reimbursements did not exist, and Hans had incurred no such expenses.  The PBGC detected the fraud before any payments were issued.

When sentenced, Hans faces up to 30 years’ imprisonment for the wire fraud charge and five years of prison for the computer intrusion charge, as well as a fine. 

The government’s case is being handled by the Office’s National Security and Cybercrime Section.  Assistant United States Attorneys David K. Kessler and Ian C. Richardson are in charge of the prosecution, with assistance from the DLA and PBGC Office of Inspector General.

The Defendant:

DWAYNE C. HANS
Age: 27
Residence: Richland, Washington

E.D.N.Y. Docket No. 17-CR-256 (SJ)