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* Originally By: Randy Edwards * Originally To: All * Originally Re: NEW YORK COMPUTER CRIME INDICTMENTS * Original Area: <FIDO> U.S. News & World Report * Forwarded by : Blue Wave v2.10 Via The NY Transfer News Service 718-448-2358, 718-448-2683 Subject: New York Computer Crime Indictments Date: 10 Jul 92 21:14:29 EDT From: mcmullen@well.sf.ca.us alt.society.cu-digest Sun Jul 12 18:18:52 1992 NEW YORK, N.Y., U.S.A., 1992 JULY 9 (NB) -- Otto G. Obermaier, United States Attorney for the Southern District of New York, has announced the indictment of five "computer hackers" on charges of computer tampering, computer fraud, wire fraud, illegal wire tapping and conspiracy. The announcement was made at a press conference at 2:00 PM on Wednesday, July 8th at the Federal Court hose in Manhattan Named in the indictment were Julio Fernandez, 18, known as the "Outlaw"; John Lee, 21, a/k/a "Corrupt"; Mark Abene, 20, a/k/a "Phiber Optik"; Elias Ladopoulos, 22, a/k/a "Acid Phreak"; and "Paul Stira, 22, a/k/a "Scorpion." In addition to alleged specific illegal acts involving computers, the five individuals were also charged with conspiracy. According to the indictment, the five were members of a group known as MOD (standing for either "Masters of Disaster" or "Masters of Deception") and the goal of the conspiracy was "that the members of MOD would gain access to and control of computer systems in order to enhance their image and prestige among other computer hackers; to harass and intimidate rival hackers and people they did not like; to obtain telephone, credit, information, and other services without paying for them; and to obtain. passwords, account numbers and other things of value which they could sell to others." The indictment defines computer hacker as "someone who uses a computer or a telephone to obtain unauthorized access to other computers." Obermaier stated that this investigation was "the first investigative use of court-authorized wiretaps to obtain conversations and data transmissions of computer hackers." He said that this procedure was essential to the investigation and that "It demonstrates, I think, the federal government's ability to deal with criminal conduct as it moves into new technological areas." He added that the interception of data was possible only because the material was in analog form and added "Most of the new technology is in digital form and there is a pending statute in the Congress which seeks the support of telecommunications companies to allow the federal government, under court authorization, to intercept digital transmission. Many of you may have read the newspaper about the laser transmission which go through fiber optics as ernment needs the help of Congress and, indeed, the telecommunications companies to able to intercept digital While all of those indicted were charged with some type of unlawful access to one or more of computer systems belonging to the following: Southwestern Bell, BT North America, New York Telephone, ITT, Information America, TRW, Trans Union, Pacific Bell, the University of Washington, New York University, U.S. West, Learning Link, Tymnet and Martin Marietta Electronics Information and Missile Group, Fernandez and Lee were also charged with selling illegally obtained credit information to a person that later re-sold the information to private detectives. Assistant United States Attorney Stephen Fishbein announced that Morton Rosenfeld has been indicted and pled guilty to purchasing credit information and access codes from persons named "Julio" and "John." Fishbein said that Rosenfeld, at the time of his arrest on December 6, 1991, has approximately 176 TRW credit reports in his possession. Rosenfeld, 21, pled guilty on June 24, 1992 and is scheduled to be sentenced on September 9th. He faces a maximum of five years imprisonment and a fine of the greater of $250,000 or twice the gross gain or loss incurred. Fishbein also announced the outcome of a "separate but related court action, Alfredo De La Fe, 18, pled guilty on June 19, 1992 to the use and sale of telephone numbers and codes for Private Branch Exchanges (PBX's). De La Fe said that he had sold PBX numbers belonging to Bugle Boy Industries to a co-conspirator who used the numbers in a call-selling operation. He also said that he and a person that he knew as "Corrupt" had made illegal long difference conference calls. De La Fe faces the same maximum penalty as Rosenfeld and is scheduled for sentencing on August 31st. Among the charges against the five charged as conspirators is the allegation that Fernandez, Lee, Abene and "others whom they aided and abetted" performed various computer activities "that caused losses to Southwestern Bell of approximately $370,000. When asked by Newsbytes how the losses were calculated, Fishbein said that there was no breakdown beyond that stated in the indictment -- "expenses to locate and replace computer programs and other information that had been modified or otherwise corrupted, expenses to determine the source of the unauthorized intrusions, and expenses for new computers and security devices that were necessary to prevent continued unauthorized access by the defendants and others whom they aided and abetted." In answer to a Newsbytes question concerning the appropriateness of making an intruder into a computer system totally responsible for the cost of adding security features "which possibly should have been there to begin with," Obermaier said "That theory would make the burglar the safety expert since one can't have people going around fooling around with other people's relatively private information and then claiming that I'm doing it for their good." Paul Tough of Harper's Magazine followed up on the same topic by saying "In the Craig Neidorf case a regional telephone company claimed that a document was worth over $100,000. When it was found to be worth only $12, the case was thrown out. In view of that, are you concerned that they (Southwestern Bell) may have overreported? In response, Obermaier "No, we are not concerned. It's a matter of proof and, if the accused stand trial and have a similar experience to as happened the case you cite, not in this district, then the results predictably will be the same." Fishbein said that the conspiracy change carries a maximum sentence of five years imprisonment while each of the other counts (there are 10 additional counts) carries a maximum of five years imprisonment and a fine of the greater of $250,000 or twice the gross gain or loss incurred. A single exception is a count charging Fernandez with possessing fifteen or more unauthorized access devices. That count carries a maximum penalty of ten years imprisonment. In response to a statement by Alex Michelini of the New York Daily News that "What you've outlined, basically, except for the sales of credit information, this sounds like a big prank, most of it," Obermaier said "Really, Well, I suppose, if you can characterize that as a prank but it's really a federal crime allowing people without authorization to rummage through the data of other people to which they do not have access and, as I point out to you again, the burglar cannot be your safety expert. He may be inside and laugh at you when you come home and say that your lock is not particularly good but I think you, if you were affected by that contact, would be somewhat miffed" Obermaier also said that "The message that ought to be delivered with this indictment is that such conduct will not be tolerated, irrespective of tensible purpose." Obermaier also said that "The message that ought to be delivered with this indictment is that such conduct will not be tolerated, irrespective of the ag of the particular accused or their ostensible purpose." Others participating in the news conference were Raymond Shaddick, United States Secret Service assistant director - Office of Investigations; William Y. Doran, FBI special agent in charge, New York criminal division; Scott Charney, United States Dept. of Justice chief of computer crime unit. All stressed the cooperation that had gone on between the various law enforcement agencies during the investigation. Charney told Newsbytes that, in spite of the fact that the search warrants executed on Stira and Ladopoulos preceded those executed on Lee and Fernandez by almost two years and that the last specific allegation against Stira proceeds the first against Lee by 16 months and the first against Fernandez by 21 months, there is evidence that links them together in the conspiracy. Charney also told Newsbytes that the counts against Abene were not related to a misdemeanor conviction in early 1991 for which he served community service. Those indicted have been asked to present themselves at New York Service Services headquarters at 9:00 AM on July 8th for fingerprinting. Arraignment for the indicted is scheduled for Thursday, July 16th. Abene told Newsbytes that while he couldn't comment on anything related to the indictment until he obtained legal counsel, "I've been participating i conferences with law enforcement personnel and guest lecturing to college classes for the last year and a half. In every case, I have said how those responsible for information about us have the responsibility to protect that data. I have also tried to explain the great difference between a true hacker and a person who uses computers for criminal profit. I hope that I have increased understanding with these efforts." (Barbara E. McMullen & John F. McMullen/Press Contacts:Federico E. Virella, Jr., United States Attorney's Office, 212 791-1955; Betty Conkling, United States Secret Service, 212 466-4400; Joseph Valiquette, Jr, Federal Bureau of Investigation, 212 335-2715/19920709) -!- GoldED 2.40 ! Origin: Marxists do it with CLASS. (1:128/105) --- Blue Wave/TG v2.10 [NR] * Origin: SYSTEM: Utility City BBS (313-299-5854) (85:871/112.0)