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Four indicted in online ticket-hacking scheme

Prosecutors say Wiseguys Tickets fraudulently obtained tickets to concerts, including shows by Bruce Springsteen.
Prosecutors say Wiseguys Tickets fraudulently obtained tickets to concerts, including shows by Bruce Springsteen.
STORY HIGHLIGHTS
  • Three of the suspects surrendered to authorities Monday in Newark, New Jersey.
  • Suspects' company, Wiseguys, got tickets to concerts, major sporting events
  • Prosecutors: Suspects made it "impossible for the average consumer to buy the best seats"
  • Wiseguys bought half the floor seats at a July 2008 Springsteen concert, prosecutors said
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(CNN) -- Federal prosecutors say four men hacked the computer systems of online ticket vendors and bought up 1.5 million tickets to prime concerts, sporting events and live performances in an elaborate scheme that netted them more than $25 million.

Three of the suspects -- Kenneth Lowson, Kristofer Kirsch and Joel Stevenson -- surrendered to authorities Monday in Newark, New Jersey. The fourth, Faisal Nahdi, is out of the country and expected to surrender in the coming weeks, according to a release from the U.S. attorney's office detailing the indictment.

All four are charged with conspiracy to commit wire fraud and to gain unauthorized access and to exceed authorized access to computer systems. The indictment, unsealed Monday, also charges 42 additional counts of wire fraud; gaining unauthorized access and exceeding authorized access to computer systems; or causing damage to computers in interstate commerce.

According to prosecutors, the men and their company, Wiseguys Tickets Inc., targeted such online vendors as Ticketmaster, Tickets.com, MLB.com and MusicToday, fraudulently obtaining tickets to such shows as Bruce Springsteen, Hannah Montana and the musical Wicked, and to major sporting events like the 2006 Rose Bowl and 2007 Major League Baseball playoffs. Wiseguys then resold the tickets to online brokers, charging them a percentage markup over the face value of the tickets, the indictment says.

The men are alleged to have contracted with computer programmers in Bulgaria to bypass safeguards designed to ensure fair access to tickets. The programmers helped establish a network of computers that impersonated individual human visitors to the vendor Web sites, the indictment said.

The network allowed Wiseguys Tickets "the ability to flood the Online Ticket Vendors' computers at the exact moment that event tickets went on sale," according to the U.S. Attorney's release.

For the average consumer hoping to score seats at some of entertainment's most popular events, "Tenths of a second could mean the difference between purchasing a seat in the first 10 rows of an event or not being able to see the event at all," the indictment says.

The indictment alleges the men were aware the specialized network "made it nearly impossible for the average consumer to buy the best seats to the most popular events," the release says.

Prosecutors cite a July 2008 Bruce Springsteen concert at New York's Giants Stadium in which they say Wiseguys bought up nearly half the 440 floor seats made available to the public.

According to the release -- citing internal company reports -- the Wiseguy employees gloated over the massive purchase, calling the success "straight domination," and saying they bought the "best ringsides by far."

The indictment says the alleged fraud occurred between late 2002 and January 2009.

The suspects face a maximum sentence of five years in prison on the conspiracy charge and 20 years in prison on each wire fraud charge.

They are expected to be arraigned later this month.