Mafia Clans Fight in Cyberspace for Control of Korean Online Casinos

On January 9, a joint task force of South Korean National Police in cooperation with the Organized Crime Task Force raided the offices of a well known web host which was allegedly hosting unlicensed South Korean internet casinos. The undisclosed hosting company along with the online casinos are reputedly controlled by the Incheon Kkangpae Organized Crime Family, which is the undisputed underworld ruler of the city of Incheon.

The South Korean government forbids citizens from gambling at online casinos located outside the country, and does not permit both foreign and domestic companies from operating internet casinos within the country. The prohibitive South Korean gambling laws leave gamblers with little choice but to illegally gamble at underground online casinos owned and operated by Organized Crime families.

Prosecutors allege that Mr. Lee, 32, the president of the hosting company, along with Mr. Park, 37, a high ranking member of the Incheon Crime Family authorized a series of “cyber-attacks” against 109 online casinos operated by the rival Daegu Kkangpae Mafia. Mr. Yeom, 34, another member of Incheon Crime Family, was allegedly assisted by 14K Hong Kong Triads to gain access to a hacked network of 50,000 remotely operated ‘zombie computers’ operated by a Triad hacker.

The attacks took the form of DDoS (distributed denial of service), reinforced by the 50,000 strong network, and began on November 21st, 2010. The attacks continued uninterrupted until December 15th. Each of the 109 rival online casinos was overwhelmed by DDoS, which prevented gamblers from connecting to all Daegu Mafia casinos. Part of the attack was aimed at intimidating businesses that previously refused Mr. Lee’s hosting plan in an effort to intimidate them and force them to switch to Mr. Lee’s hosting company.

Prosecutors believe that the ultimate aim of this attack was for the Incheon KKangpae gang to interrupt the operations of 109 internet casinos which were operated by rival gangsters in order to force gamblers to sign up with Incheon. Analysts estimate that over 1 million Koreans play weekly at the Mafia operated internet casinos. It is estimated that as many at 75% of gamblers switched to Incheon Kkangpae online casinos during the 24 day DDoS attack period, significantly changing the face of internet gambling in South Korea.

Several members of the Incheon Crime Familty were arrested on January 9th for their alleged participation in the high-tech crime scheme. The lead prosecutor stated in a press release that “It is the first time that a South Korean crime family attacked another by using a professional hacker and the internet instead of guns or knives. This may also signal the beginning of a new level of close cooperation between Chinese Triads and Korean Incheon gangsters.”