A former employee of United Tote, the bet-processing company owned by Churchill Downs Inc., has pleaded guilty to extortion in United States District Court in Louisville, Ky., after threatening to sell thousands of illegally obtained birth dates and Social Security numbers on the black market.
Ethan C. Fey, who according to his Linked In profile page worked for Churchill Downs from 2004-10 and United Tote from 2010-16, was charged in August with one count of Hobbs Act extortion and one count of possession of 15 or more unauthorized access devices. He originally pleaded not guilty but reached a plea agreement with Assistant United States Attorney Amanda E. Gregory prior to a Nov. 6 trial date.
According to the Oct. 23 agreement, which does not specifically name United Tote or Churchill Downs Inc.: “The defendant, Ethan C. Fey, worked at a company that operated in interstate commerce and had customers around the nation until approximately June 8, 2016, when the company terminated his employment. Prior to leaving the company, defendant Fey copied a report containing personal information, including dates of birth and Social Security numbers of thousands of the company's customers onto a thumb drive. On June 5, 2017, defendant sent an anonymous email to a number of employees of the company. He stated the company's computer system had been hacked and customer information had been taken. He threatened to sell the customer information on the black market, unless the company paid him 50 bitcoins, which at the time, was worth approximately $150,000. Shortly after Fey sent the email, prior to the company making any payments, Fey was approached by the FBI and he confessed.”
The maximum penalty carries a 30-year prison sentence and a maximum fine of $500,000, but the agreement states that the government will recommend “a sentence of imprisonment at the lowest end of the guideline range…but not less than any mandatory minimum term of imprisonment required by law.”
Sentencing before Judge David J. Hale is pending.
Bitcoins are a digital currency described by Bloomberg as the “currency of choice for hacker blackmailers who steal huge amounts of sensitive data.”
United Tote is part of a family of companies owned by Churchill Downs Inc. that also includes casinos, racetracks in five states, the TwinSpires advance deposit wagering company, and the online gaming company Big Fish Games.
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