'Wise Guys' Accused of Scalping $29 Million in Springsteen, Yankees, Miley Cyrus Tickets

Feds charge four men with hacking computers in nationwide ticket fraud.

March 1, 2010 — -- Federal prosecutors have charged four self-styled "Wise Guys" with engineering a $28.9 million scheme to scalp tickets to some of the nation's hottest musical and sports events.

An indictment filed in New Jersey charges the men with hacking into the computers of Ticketmaster, Major League Baseball, Telecharge and Live Nation Entertainment and grabbing 1.5 million tickets for shows by Bruce Springsteen and Miley Cyrus, Major League Baseball playoff games at Yankee stadium and games in college football's Bowl Championship Series, among other events.

"At a time when the Internet has brought convenience and fairness to the ticket marketplace,these defendants gamed the system with a sophisticated fraud operation that generated over $25 million in illicit profits." said U.S. Attorney Paul Fishman. "Today's indictment represents a significant step forward in the fight against those who use fraud to disrupt E-Commerce and evade computer security."

Defendants Kenneth Lowson, Kristofer Kirsch, Joel Stevenson and Faisal Nahdi, all of California, allegedly formed a company called "Wiseguy Tickets" to operate the scheme between 2002 and 2009, and realized profits of $28.9 million, according to the indictment. They are accused of impersonating individual buyers to get around the on-line ticket sellers' security measures and buy blocks of tickets. All but Nahdi surrendered to the FBI in Newark, New Jersey, Monday morning.

Lowson, Kirsch and Stevenson will appear before a federal judge in Newark later today. In a statement, the U.S. Attorney's Office in Newark said that Nahdi is out of the country but "is expected to surrender to authorities in the coming weeks."

The indictment alleges that for one 2007 concert tours by Bruce Springsteen, Wiseguys purchased as many as 12,000 tickets worth $1.3 million. Wiseguys allegedly used its automated buying program to lock up the most coveted seats near the stage.

Lowson, also known as "Money," and Kirsch, also known as "Robert Woods," are named in the indictment as co-founders and part owners of the company, while Stevenson is described as the chief U.S. computer programmer, responsible for writing some of the computer code that defeated the security measures. Nahdi is is described as the Chief Financial Officer and a "straw owner," intended to conceal the identity of Lowson.

According to the indictment, a Bulgaria-based computer programmer also helped devised some of Wiseguys ticket-buying programs, and some employees of Wiseguys worked out of Bulgaria. The company is said to have had as many as 15 employees at a time, with headquarters in Los Angeles and San Francisco.

The company allegedly created a natiowide network of computers to impersonate individual consumers, and sought to purchase up to 100,000 IP addresses.

"The public thought it had a fair shot at getting tickets to these events, but what the public didn't know was that the defendants had cheated them out of that opportunity," said Fishman.

Other events for which Wiseguys allegedly scalped tickets included shows by Bon Jovi, Coldplay, Tim McGraw, Barbra Streisand, Kelly Clarkson and Kenny Chesney, as well as Broadway musicals, U.S. Open tennis matches and NFL football games. The events took place in New Jersey, New York, California, Pennsylvania, Florida and Nebraska.

Click Here for the Blotter Homepage.