Date: 10 Jul 92 21:14:29 EDT
From:
[email protected]
Subject: File 2--New York Computer Crime Indictments
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)
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