The indictment against Colton Grubbs seeks a judgment of $134,131 that represents "the proceeds from the felony crimes." The government also seeks a total forfeiture of money and bitcoin valued at nearly $1 million.
The 10-count indictment includes charges of conspiracy to defraud; computer intrusion; obstruction of justice; money laundering affecting interstate or foreign commerce and conspiracy of money laundering.
Grubbs, 21, is the owner and organizer of a company incorporated in 2016 called Luminosity Security Solutions LLC, according to the Kentucky Secretary of State. Grubbs developed LuminosityLink software that included features allowing the unauthorized access and control of other people's computers, according to the indictment.
The alleged crimes occurred in Lincoln and Fayette counties; at the time the federal investigation began Grubbs lived in Stanford but he later moved to Lexington. He could not be reached for comment Friday and the telephone for his parents' home in Stanford had been disconnected. The indictment does not name the people with whom Grubbs allegedly conspired to sell and use the software.
The software made it possible for purchasers to access and view files, login credentials and personal identifying information, and to surveil and record user activity on victim computers, the indictment said. The software could be installed on computers without the victims' knowledge or permission.
A search warrant affidavit filed in federal court said the LuminosityLink software was sold to customers in more than than 75 countries "and has been used to steal personal information from numerous victims worldwide, including in England," where it first came to the attention of a British cyber crime unit.
Grubbs advertised the availability of the LuminosityLink software on a public Internet forum called HackerForums.net while using the alias "KFC Watermelon," the indictment said.
He used the forum and his website to provide information about other software LuminosityLink purchasers could use to conceal their identities and hide LuminosityLink from victim computer's anti-virus software. Grubbs also answered potential and actual LuminosityLink users' questions via Internet posts and private direct messages.
He also began a "LuminosityLink Support Thread" within the forum "Hacks, Exploits and Various Discussions," the indictment said.
The court document said Grubbs also recruited and encouraged unidentified co-conspirators to answer questions on Skype from potential and actual purchasers.
Grubbs sold, and organized co-conspirators to sell, LuminosityLink software on the Internet, the indictment said. But Grubbs operated a licensing system to prevent actual LuminosityLink purchasers from freely sharing the software with other users in order to maximize his proceeds from the software sales, the indictment alleged. He received proceeds in the form of money and virtual currency.
Grubbs arranged for a co-conspirator to receive payments via PayPal for software, the indictment said. PayPal is an Internet payment system from which Grubbs had been banned.
The government also seeks the forefeiture of $52,482.12 found in a JPMorgan Chase Bank account in the name of Grubbs; $45,007 in cash found during a search of Grubbs' bedroom; and 114.8 bitcoin found in five accounts controlled by Grubbs. The bitcoin as of Friday is worth roughly $877,000, according to bitcoin exchanges.
During a July 2017 search of the Lexington apartment where Grubbs lived, federal authorities seized various computer equipment and a cell phone, according to an inventory filed in court.
Grubbs is scheduled to be arraigned June 18 before U.S. District Judge Joseph Hood.
©2018 the Lexington Herald-Leader (Lexington, Ky.), Distributed by Tribune Content Agency, LLC.
