Yahoo headquarters in Sunnyvale, California.
An early report revealed how Russian spy operatives and hackers were able to access user accounts without actually stealing passwords. Yahoo disclosed the breach a year ago, and pointed the finger at a "state-sponsored actor".
"During the conspiracy, the FSB officers facilitated Belan's other criminal activities, by providing him with sensitive FSB law enforcement and intelligence information that would have helped him avoid detection by US and other law enforcement agencies outside Russian Federation, including information regarding FSB investigations of computer hacking and FSB techniques for identifying criminal hackers", the Justice Department charged in its statement about the indictments.
"The defendants targeted Yahoo accounts of Russian and US government officials, including cybersecurity, diplomatic and military personnel", said acting Assistant Attorney General Mary McCord.
He was put to work by Russia's Federal Security Service, or FSB, on an ambitious project: to breach Yahoo and steal account information from hundreds of millions of users.
The case, announced amid continued USA intelligence agency skepticism of their Russian counterparts, comes as US authorities investigative Russian interference through hacking in the 2016 presidential election.
After the Chinese military hackers were indicted, officials said their activity seemed to dwindle.
U.N. Ambassador Nikki Haley said Trump should take both investigations serious.
The FBI's San Francisco Division's special agent in charge Jack Bennett said the he is confident USA authorities will apprehend the three suspects, despite America not having an extradition treaty with Russian Federation.
A Canadian man of Kazakh origins who appeared to live a lavish lifestyle in southern Ontario was arrested as one of four suspects in a massive hack of Yahoo that targeted American government officials, Russian journalists opposed to the regime of President Vladimir Putin, and ordinary email users, authorities said Wednesday.
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Trump's budget also proposes elimination of the United States Agency for International Development's (USAID) Complex Crises Fund. Tillerson said he thought overseas conflicts that the US has been involved in would diminish, easing the demands on State.
Also indicted in the alleged conspiracy that authorities said began in January 2014 were Dmitry Aleksandrovich Dokuchaev, 33, Igor Anatolyevich Sushchin, 43, and Alexsey Alexseyevich (Magg) Belan, 29, all Russian nationals and residents.
USA prosecutors said the two Russian agents acted on behalf of the Federal Security Service, or FSB, the successor agency to the KGB, a charge that is likely to further poison tense U.S. The 2013 hack affected 1 billion accounts, it said.
The U.S. also reveals how Russian Federation has used criminal operations to hide government spy activities, sheltering those criminals from prosecution while using the threat of charges as a recruiting tool for the country's best criminal talent.
Russian news accounts stressed that one of the FSB agents, Dmitry Dokuchaev, was arrested by Russian authorities in December and charged with treason.
Ministry of Transportation documents show that Baratov has, at various times in the past five years, affixed his "Mr Karim" vanity license plate to an Aston Martin, a Porsche, an Audi, a Lamborghini, a Mercedes Benz and three BMWs. The FSB did not respond to a request for comment.
Additionally it is alleged that Belan gained unauthorized access to Yahoo's Account Management Tool (AMT), which allowed the gang to locate and access least 6,500 email accounts of interest.
"Cyber crime poses a significant threat to our nation's security and prosperity, and this is one of the largest data breaches in history", said Attorney General Sessions.
Neighbours say they do not know Baratov well.
"If you illegally target US citizens or USA companies you will be identified, pursued, and held to account - wherever you are." said Paul Abbate, FBI Assistant Director.
USA authorities and cyber security specialists have been saying for years that the Kremlin employs criminal hackers, allowing the Russian government to advance its agenda while denying involvement.