Hackers Who Broke Into Gambling Machines Cleared of Federal Charges

Two gambling hackers who took advantage of a software bug in modern gambling machines have been cleared of federal charges just in time for the Thanksgiving holidays.

On Friday morning, November 21st, a federal judge cleared John Kane, 55, and Andre Nestor, 42, of all federal charges, including wire fraud and computer fraud. The two were arrested in July 2009 at the Silverton Casino Lodge in Las Vegas for hacking into some of the video poker machines to win a small fortune. In January 2011, the men officially received federal charges.

Kane was an avid gambler who discovered the software bug in a video gambling machine made by a company called IGT, named the Game King. The software bug allowed Kane to replay winning hands at ten times the original value. He used the bug to rake in winnings across Vegas.

His friend, Nestor, used the same bug in Pennsylvania to win $400,000 in one go.

Federal prosecutors argued that the complex sequence of button presses to unlock the bug in the machine made this a form of hacking, which is heavily regulated by federal law. However, defense attorneys argued that the series of button presses was a built-in feature of the game, and therefore both defendants played by the rules imposed by the company. In May of this year, prosecutors lost pre-trial arguments to impose the Computer Fraud and Abuse Act on the case, and dropped the hacking charges.

On Friday, the federal charges were officially dropped.

“[T]he government has evaluated the evidence and circumstances surrounding [the case], and determined that in the interest of justice it should not go forward,” wrote Assistant U.S. Attorney Daniel Schiess, who inherited the case from another prosecutor earlier this year.

“What you see in most gambling cheating cases is the guy’s got a magnet in his boot or he’s shocking the machine with static electricity.” said defense attorney Andrew Leavitt. “All these guys did is simply push a sequence of buttons that they were legally entitled to push.”

“These guys kind of kept it a secret,” Leavitt said. “If this had got out… this would have been a bad thing for the casinos.”

Defense Against Federal Charges like Wire Fraud in South Carolina

The law broadly defines wire fraud as devising or intending to devise a scheme to defraud others of money or property under false or fraudulent pretenses, representations or promises by means of electronic communications, or “wires.” Because they typically involve interstate matters, most wire fraud cases are considered federal crimes with convictions carrying heavy fines, prison sentences of up to 20 years, or both.

Our federal criminal defense lawyers handle cases involving:

• Fraudulent insurance claims
• Bond issuances and investment schemes
• Falsifying loan applications
• Check fraud schemes
• Bribes or kickbacks
• False advertising or misrepresentation in sales transactions

The Strom Law Firm Can Help Defend Federal Charges

If you, your loved one, or your corporation has been contacted by a law enforcement officer about federal charges, you should contact the Strom Law Firm, LLC immediately. The Strom Law Firm offers free, confidential consultations so you can discuss the facts of your case with impunity. Contact us today.803.252.4800