Former United Tote Employee Charged With Extortion; Allegedly Stole Social Security Numbers

by | 10.08.2017 | 11:04pm

A Kentucky man who formerly worked for Churchill Downs Inc.'s bet processing company, United Tote, has been indicted by a federal grand jury on extortion charges.

Ethan C. Fey has been charged in United States District Court for the Western District of Kentucky in Louisville with one count of Hobbs Act extortion and one count of possession of 15 or more unauthorized access devices.

According to an indictment unsealed when he was taken into custody on Aug. 30, Fey allegedly had “previously stolen personally-identifying information” of a company's clients and “on or about June 5, 2017, he threatened to release that information unless the company paid Ethan C. Fey 50 bitcoins.”

Count two of the indictment alleges Fey, between June 8, 2016, and June 5, 2017, “knowingly and with intent to defraud, possessed more than 15 Social Security numbers of different customers of a company, operating in interstate commerce, said possession affecting interstate commerce, in that Ethan C. Fey threatened to release the Social Security numbers to the public unless the company agreed to pay Ethan C. Fey 50 bitcoins.”

The name of the company was not disclosed in the indictment. The alleged crimes took place in Louisville, Ky.

Bitcoins are a digital currency described by Bloomberg as the “currency of choice for hacker blackmailers who steal huge amounts of sensitive data.” Fifty bitcoins is currently estimated to be worth approximately $230,000.

According to his profile on the Linkedin social network, Fey was a senior operator for United Tote from July 2014 until sometime in 2016. Prior to that, the profile says, he was a United Tote operator at Churchill Downs-owned Fair Grounds in Louisiana from October 2012-July 2014; a United Tote hub operator from September 2010-October 2012; and a member of the Churchill Downs simulcast department from 2004-2010. Churchill Downs Inc. acquired United Tote in 2010 as part of a deal to purchase the advance deposit wagering company

An alumni page for Colorado Technical University in Colorado Springs, Colo., also lists Fey as having worked for United Tote. His Linkedin profile says he earned a bachelor's degree at Colorado Technical University in cyber/computer forensics and counterterrorism.

In addition to United Tote, Fair Grounds and Churchill Downs racetrack, Churchill Downs Inc. owns the TwinSpires advance deposit wagering company – which is a customer of United Tote – and the online gaming company Big Fish Games. TwinSpires previously suffered a security breach in 2012. Big Fish Games reported in 2015 that some customer payment information may have been intercepted after malware was installed on certain pages.

Fey was released on his own recognizance after an Aug. 30 court appearance in which he pleaded not guilty. A trial has been scheduled for Nov. 6, 2017, with Judge David J. Hale presiding. Fey faces up to 20 years in prison on count one and 10 years on count two with fines up to $250,000 on each count.

  • Tinky

    Wait – he demanded that they pay in a currency that can’t be traced in his real name?!

    • really?

      no thats not what is says. I worked with Ethan, he is a pretty smart guy. Up till now, anyway

      • Tinky

        Yes, you are technically correct, but (bold emphasis mine), only a fool would use a name so close to their real one:

        Count two of the indictment alleges Fey, between June 8, 2016, and June 5, 2017, “knowingly and with intent to defraud, possessed more than 15 Social Security numbers of different customers of a company, operating in interstate commerce, said possession affecting interstate commerce, in that Ethan C. Fry threatened to release the Social Security numbers to the public unless the company agreed to pay Ethan C. Fey 50 bitcoins.

        • really?

          pretty sure that is a typo. identifying him in the indictment doesnt mean he asked for the bitcoins with his own name, just that he was identified as the person extorting the company

          • Tinky

            Yes, that’s a fair point, though the way it reads is ambiguous.

        • RayPaulick

          That was a typo and has been fixed.

    • jarmstead

      Tinky… are you the same guy who posted on Dan’s blog so eloquently long ago?

      I am still impressed with your over-all and very specific knowledge (especially on breeding) of anything to do with this Industry.

      I very much appreciate this site and have mad respect for Ray Paulick and his entire staff.

      • Tinky

        Yes, and thank you for your kind comments.

        • Charles Smith

          Tinky, don’t let all these nice comments go to your head.

  • Lolz

    And if you really think this is the only the second time TWS data was exposed I have some ocean front property for sale.

  • Richard C

    The exacta box of greed and ego are the Siren Song for the wicked.

  • Larry Ensor

    Here is a guy that was trying to steal hundreds of thousands of dollars. But he is “released on his own recognizance”. WTF?

    Countless 1000s of people caught with a bag of weed were/are thrown in jail and their bail was/is many thousands.

    • togahombre

      crime does pay, when it’s white collar

      • Larry Ensor

        I’ve noticed that over the years. There have been a LOT of embezzlement around here. They steal hundreds of thousand if not millions from their trusting employers and basically get a slap on the wrist.

        • togahombre

          a few years back, in the same days newspaper, the nys attorney general announced a plea arrangement his office made with a pharmacist that had overbilled medicare/medicaid for $7.25mil, he got an 11 month suspended sentence, no mention of restitution but lets give him the benefit of the doubt, on a different page, in the local county court, they had sentenced a 26 yr old for a string of home burglaries, 7 to 12, most likely he had priors for that kind of sentence, neither one was violent, but the same days paper, you couldn’t overlook the irony

    • JustJoe

      BS, How big was that bag of weed?

      • Larry Ensor

        No BS, you must be a youngster. Back in the day I got busted several times. Once my bail was $3,000 in NY for a couple of joints. Spend several weeks in jail until I got the nerve to call my father for help.

        Another time for less than a 1/2 oz in MO, bail was $5,000. In 1974 I was charged with “selling” less than an Oz of weed. A “friend” had been busted and “narced” on others. Set me up and I was just doing a favor, like most in those days. I knew someone in need and I knew someone who had some to sell. Under the NY “Rockefeller Drug Laws” of the 70s. Selling some weed was the treated the same as selling heroin. I was charged under the mandatory state drug laws at the time was was facing 15 to life. I was a kid and it cost my parents plenty to keep me out lengthy jail time. Spent 60 days in jail and 5 years strict probation. Had to report once a week. Lots of others in the same boat didn’t have family with the financial resources and spend years in jail.

        • jarmstead

          Larry… now this is a topic that is more profound that the new IRS “signer” laws that took affect. I feel for anyone who has been persecuted over a plant that has been used as medicine by most cultures… going back 5000 years (Chinese warriors injured in battle were given ‘phytocannabinoids’ as a form of anesthesia, prior to/after the amputation of a limb).

          While I appreciate this topic (Cyber Crime/Identity Theft) as the most serious new multi-Billion dollar a year industry, it is different than the pain of chemo induced treatment for cancer/s. 97% of those who receive chemo, die within 2 years of said treatment.

          Bitcoin is a “Black-Hat currency” that to date, hasn’t killed anyone. Investors have probably “jumped out of windows” from poor trading results of Bitcoin, but; they’re rarely publicized.

          If the editors of these posts feel that my sentiment is “off topic” or not very appropriate to this topic, they can delete it without any “hard feelings.” This won’t mean that I don’t still “feel your injustice,” Larry.

  • Jon

    Once again trainers fault….

  • Manefan

    Well, if Ethan C. Fey was looking to secure his future, he’ll have plenty of security now; A nice cot and blanket with 3 meals a day. Who could ask for more security.

    • jarmstead


      • Manefan

        At least, that’s the result I hope for. There are still hoops to go through. ;)

  • Smedley

    At what point will it become a felony to merely possess an old American Racing Manual, and the hundreds of Social Security Numbers matched to names in those?

    Maybe it already IS???

    (Keep us posted !!!!! )

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