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 Youbet.com.
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.
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