RAMNICU VALCEA – To the tourist eye, Râmnicu Vâlcea is a quiet, leafy city. Located at the bottom of the Carpathian mountain range, in central Romania, no one would guess this town’s secret, buried in its working-class neighborhood, Ostroveni.

You have to leave the boulevard that stretches across the city to end up in narrow streets surrounded by housing projects from the communist era, to start noticing that something’s amiss in this city of about 100,000 citizens.

Parked around those poorly constructed buildings erected during the Cold War dictatorship, there are expensive cars. Behind the wheel, youths between 20 and 30-years-old are proud of showing off a wealth that deeply contrasts with its surroundings. Welcome to the hackers’ lair!

Râmnicu Vâlcea and its Ostroveni neighborhood, is nicknamed “Hackerville.” It is the world capital for online theft. Internet shoppers from all over the world have been had by the Romanian hacking network: French, British, Germans, Italians and mostly Americans. According to the Romanian police, around 80% of their victims reside in the U.S. "Last year, one billion dollars was stolen in the U.S. by Romanian hackers," says American ambassador in Bucharest, Mark Gitenstein.

In Ostroveni, everyone knows what is happening, but omerta – the code of silence – is the norm. One of the hackers agreed to let us peek into his "business," as long as he remains anonymous. "It’s easier with the Americans," he says, "these guys buy their bread online, they’re used to do everything on the Internet." He claims to sometimes "bamboozle four or five users per week, leaving me, in the end, a few dozens or a few hundred thousand dollars richer."

"It’s a big world we live in and it’s full of idiots ready to buy anything on the Internet," he says. "We sell fictitious products, we clone websites and hack credit cards. In Europe, in order to get the cash in, we use "arrows" (money mules) – their only job is to withdraw the money previously sent to an account. They keep 30% of the loot and then send us the rest via Western Union." Given the many Western Union signs that have flourished in the center of Ramnicu Valcea, business seems to be blooming.

The Romanian hackers have understood that it is better for them to work in networks. This is their difference and their strength, compared to other hackers. The "arrows" are the most exposed – this is why they often have fake IDs. They know everything there is to know about the complex world of the Internet. "We used to pull all-nighters in front of our computer screens," recalls the hacker from Ostroveni. "We used to get 14-year-olds to help us. We even drafted the children of the orphanage to teach them stuff and make them work for us."

Fighting cyber crime

A group of FBI cyber-criminality specialists has set up shop in Bucharest, in order to – among other things – train 600 Romanian policemen to end the scourge. A special Internet theft unit was created and its 200 policemen have been dispatched all over the country. "We have made a lot of progress in the last few years. Romania is now working with Europol and the European Commission against cyber-crimes," explains Virgil Spiridon, head of Internet theft unit. They are making more and more arrests. In 2011, the Romanian unit filed about a thousand cases, arrested 500 people and passed 150 cases on to judges.

"SirVic," AKA Victor Faur knows the system – he used to be the head of one of Romania’s top hacking networks. As skilled as he is, SirVic got caught and condemned to six months in jail with a suspended sentence and a $240,000 fine. He had breached NASA’s servers to show the Americans how flawed their security systems were. "I warned them to fix it but I made the mistake of bragging about it on a website they were monitoring."

According to "Ice Man," the 26-year-old "black prince" of the Romanian hackers – also known as Robert Butyka – stealing on the net is very easy. He adds though, a little miffed, that hacking and stealing are not the same. He only likes the true challenges of the Internet.

"Yes, stealing on the Internet is easy," he says, "there are hundreds of websites where you can learn how to become a hacker." A few clicks later: "There you go, I found credit cards for sale with associated codes for Italy, France, the U.S., the UK and Spain." His screen shows classified ads where everything is for sale: credit cards and their codes, blank cards, lists of accounts from large email companies and many programs to access servers.

Ramnicu Valcea is the nerve center of cyber-criminality and its reach extends to several continents. The phenomenon started in 1996 and had a snowball effect on the town. However, Romania waited until 2003 – pressed by the U.S. – to pass a bill against cyber crimes.

From his balcony with a view on the pirates’ bay of Râmnicu Vâlcea, the hacker from Ostroveni has few doubts. "The brains, the big whales have Hackerville," he says with a grin on his face, "they have settled elsewhere, and are hiding in the U.S., the UK, France or Switzerland. They are very rich and stealthy ghosts. I don’t think they’ll ever get caught."