Sex, Drugs, and the Biggest Cybercrime of All Time

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"Shit," Albert muttered. When the bus lumbered forward, Albert made the right turn — and then another sudden right down a side street, followed by three more quick rights, until he had somehow maneuvered behind the Camaro. ("He's a ridiculously good driver," says Patrick.) As they followed the car that had been tailing them, Albert took out his phone, called Stephen in New York and ordered him to call one of his Secret Service contacts. "You gotta ask him this question," Albert told him. "Who's following us? Is it the boys in blue or the boys in green?" Blue, for the local cops, could be trouble. But green, for the Secret Service, would be even more worrisome. Why would his own handlers be tailing him?

Stephen relayed the question, and a few minutes later, he was yelling the answer in Albert's ear: "He said it's the boys in green! The boys in green!"

"OK," said Albert, smooth as could be. He stopped tailing the Camaro and drove back to the condo, where he sat down to think. In the end, Albert decided it was nothing to worry about. "Remember," he reminded Patrick as they helped themselves to the vial of LSD. "It's not what they know, it's what they can prove."

Albert was arrested in May 2008 by a team of federal agents. They found him holed up in the National, a luxury hotel in South Beach, with a gorgeous six-foot-tall volleyball player he'd been seeing on the side. Also in the hotel room were a Glock 27, two laptops and $22,000 in cash. Buried in the backyard of his parents' house, agents found a barrel with $1.1 million in cash wrapped in plastic bags.

The feds had been tipped off after Maksym Yastremskiy, Albert's Ukrainian card-hawker, was arrested outside a Turkish nightclub in July 2007. When agents got a look at Yastremskiy's laptops, they found millions of stolen card numbers, a program used to hack into corporate retailers — and logs of encrypted chats with Albert. Once they cracked the code, investigators were able to tie Yastremskiy and Albert, along with an Estonian hacker nicknamed "Jonny Hell," to the siphoning of 5,000 card numbers from a Dave & Buster's, a security breach that cost the restaurant chain $600,000 to repair. Ironically, it was this relatively small hack — not the cybercrime of the century — that Albert originally found himself busted for a year later. But once the feds opened up his computers and began connecting the dots, they were astounded by the scope of the operation their trusted informant was running. The government indicted 11 members of Green Hat Enterprises from five countries, accusing Albert of reaping $1.6 million from his worldwide enterprise. Prosecutors estimated that the scheme cost its corporate victims, banks and insurers $200 million, but they maintain that the economic damage is likely far greater. "The magnitude of the loss is enormous," says Stephen Heymann, a U.S. attorney who prosecuted the case. "Because of the impact on so many thousands of businesses and banks and millions of people, it's impossible to quantify the full vastness of the crime."

The morning of Albert's arrest, Patrick Toey woke up at the Miami condo with half a dozen agents pointing tactical weapons at him. He started cooperating even before speaking with a lawyer. "I don't feel good about it," he says, sitting in his mother's house in Virginia Beach days after his sentencing in April. "It's not something I really wanted to do. Albert was one of my best friends. From my perspective, he still is. But taking the rest of my life into consideration, it was kinda something I had to do." For his cooperation, which the government cited as crucial in bringing down Albert's operation, Patrick received a prison sentence of five years, after facing a maximum of 22. Under the terms of his pre-prison release, he is forbidden from using a computer for any reason — not even to e-mail his fiancee, whom he had met online. "I don't know if Albert understands," he says quietly. "Even though if it was me, I definitely wouldn't forgive me for what I did."

Stephen Watt pleaded guilty to writing the sniffer code that proved key to Albert's operation but continues to insist that he never knew it was being used for illegal purposes, noting that he made no money from Albert's crimes. (The uncompensated nature of his devotion stunned investigators; questioning his motives, they asked Patrick whether Stephen and Albert were lovers.) The prosecution argued that Stephen must have known what Albert was up to: After all, the two spoke or IM'd daily, sharing "all their exploits: sexual, narcotic and hacking," and openly discussed Albert's sale of stolen card data. The judge agreed, sentencing Stephen to two years in prison and ordering him to pay a share of the $172 million restitution.

A few weeks after the judge's ruling, stomping around the Manhattan apartment he owns with his new wife, a real estate agent, Stephen bristles at the suggestion that he is anything other than a black-hat hacker. His motives, he insists, are ideological, not financial. "I'm a computer criminal, not a thief," he says. "That's my statement, and I'm sticking to it." For the next five hours, he offers a complete tour of the alarmingly neat apartment — books arranged by subject, clothes lined up by color — pausing only to snort ketamine off the top of his bookshelf, where he keeps a minipharmacy of pills, powders and vials. He shows off credit-card offers he's been getting on Albert's behalf — "Albert Gonzalez, you have been pre-approved!" — ever since Stephen added him as a secondary cardholder on his AmEx.

"I walked a dangerous line," Stephen says, coming precariously close to a confession. "I did things I shouldn't have, and honestly, I had no problem participating in or enjoying the spoils of Albert's game. Am I morally responsible? Do I bear some guilt in this? Yes. Do I have any apologies to make?" He gives a derisive snort. "Uh, the answer is definitely no."

Albert, ever the realist, pleaded guilty and cooperated fully with the feds as soon as he realized that Patrick had turned state's witness. In return, after facing a maximum of life in prison, he was sentenced to 20 years — the longest punishment for a computer crime in U.S. history. "I never gave a thought to the millions of people whose lives I impacted," a penitent Albert told the judge at his sentencing, his dream of being a green hat replaced by olive-green prison garb. "I'm humbled by the 22 months I've spent in prison," he continued, as his parents wept in the front row. "I have no one to blame but myself."

It was a moving display of remorse. But one has to wonder if Albert was being more forthright in a letter he wrote me from prison, politely declining to share his story. "I'm fearful of what the DOJ's reaction may be if I was to go on record with the events of the past 10+ years," he wrote in his neat, spiky printing. "The motherfuckers have already proven to be untrustworthy and vindictive." Always the loyal friend, he added a concerned postscript: "Is Stephen OK? I haven't heard from him in two weeks."

To prepare Stephen for jail, Albert sent his friend a six-page typewritten letter explaining in detail how prison works: how the different races interact, how to properly climb onto a top bunk without offending your cellmate, even how to fart without stinking up the cell. He called it, with simple pragmatism, "A Guide to Being Successful in Jail." "Think Switzerland," Albert wrote. "When you're like Switzerland you have no loyalty to anyone or any group. Your loyalty should be to yourself, and your motto should be Google's: Don't do evil." The key, he added, is to show other prisoners that "we're str8 shooters who are highly intelligent. For some reason, people respect you if your IQ is over 130. You'll know you've reached this point when someone turns to you and says, 'Yo Stephen, when was JFK assassinated?' "

Even behind bars, Albert was still studying the angles, calculating the odds, figuring out how to hack the system to his advantage. "I hate the first couple of weeks when you arrive at a new facility, because it reminds me of the first couple weeks of school," Albert continued in his letter to Stephen. "You don't know anyone, and if you're anything like I was in school, anti-social, it's not enjoyable. The good thing is, we're one of the coolest motherfuckers on the planet, so we don't have a hard time meeting people once we're confident of our surroundings."

Then Albert's new surroundings forced him to cut his letter short. "I'm being rushed to finish because it's last call to get into the showers," he told Stephen. "Keep your head up and don't fear this. It's really not that hard. Remember, Switzerland."


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