AOH :: P17-11.TXT

PWN17.2 "Illegal" Hacker Crackdown

                      #### PHRACK PRESENTS ISSUE 17 ####

                  ^*^*^*^ Phrack World News, Part 2 ^*^*^*^

                           **** File 11 of 12 ****

                          "Illegal Hacker Crackdown"
               from the California Computer News - October 1987
                      Article by Al Simmons - CCN Editor

Hackers beware!

Phone security authorities, the local police, and the Secret Service have been
closing down on illegal hacking - electronic thievery - that is costing the
long-distance communications companies and their customers millions of dollars
annually.  In the U.S., the loss tally on computer fraud, of all kinds, is now
running between $3 billion and $5 a year, according to government sources.

         "San Francisco D.A. Gets First Adult Conviction for Hacking"
                  (After about 18 years, it's a about time!)

San Francisco, District Attorney Arlo Smith recently announced the first
criminal conviction in San Francisco Superior Court involving an adult
computer hacker.

In a report released August 31, the San Francisco District Attorney's office
named defendant Steve Cseh, 25, of San Francisco as having pled guilty earlier
that month to a felony of "obtaining telephone services with fraudulent
intent" (phreaking) by means of a computer.

Cseh was sentenced by Superior Court Judge Laurence Kay to three years
probation and ordered to preform 120 hours of community service.

Judge Kay reduced the offense to a misdemeanor in light of Cseh's making full
restitution to U.S. Sprint - the victim phone company.

At the insistence of the prosecuting attorney, however, the Court ordered Cseh
to turn his computer and modem over to U.S. Sprint to help defray the phone
company's costs in detecting the defendant's thefts.  (That's like big money

A team of investigators from U.S. Sprint and Pac Tel (the gestapo) worked for
weeks earlier this year to detect the hacking activity and trace it to Cseh's
phone line, D.A. Arlo Smith said.

The case centered around the use of a computer and its software to illegally
acquire a number of their registered users to make long-distance calls.

Cseh's calls were monitored for a three-week period last March.  After tracing
the activity to Cseh's phone line, phone company security people (gestapo
stormtroopers) were able to obtain legal authority, under a federal phone
communications statute, to monitor the origin and duration of the illegal

Subsequently, the investigators along with Inspector George Walsh of the San
Francisco Police Dept. Fraud Detail obtained a search warrant of Cseh's
residence.  Computer equipment, a software dialing program, and notebooks
filled with codes and phone numbers were among the evidence seized, according
to Asst. D.A. Jerry Coleman who prosecuted the case.

U.S Sprint had initially reported more than $300,000 in losses from the use of
their codes during the past two years; however, the investigation efforts
could only prove specific losses of a lesser amount traceable to Cseh during
the three-week monitoring period.

"It is probable that other computer users had access to the hacked Sprint
codes throughout the country due to dissemination on illegal computer bulletin
boards," added Coleman (When where BBS's made illegal Mr. Coleman?)

          "Sacramento Investigators Breakup Tahoe Electronic Thefts"

Meanwhile, at South Shore Lake Tahoe, Secret Service and phone company
investigators arrested Thomas Gould Alvord, closing down an electronic theft
ring estimated to have rung up more than $2 million in unauthorized calls.

A Sacramento Bee story, filed by the Bee staff writers Ted Bell and Jim Lewis,
reported that Alvord, 37, was arrested September 9, on five felony counts of
computer hacking of long-distance access codes to five private telephone

Alvord is said to have used an automatic dialer, with computer programmed
dialing formulas, enabling him to find long-distance credit card numbers used
by clients of private telephone companies, according to an affidavit filed in
Sacramento's District Court.

The affidavit, filed by William S. Granger, a special agent of the Secret
Service, identified Paula Hayes, an investigator for Tel-America of Salt Lake
City, as the undercover agent who finally brought an end to Alvord's South
Shore Electronic Co. illegal hacking operation. Hayes worked undercover to
purchase access codes from Alvord.

Agent Garanger's affidavit lists U.S. Sprint losses at $340,000 but Sprint
spokesman Jenay Cottrell said that figure "could grow considerably," according
to the Bee report.

One stock brokerage firm, is reported to have seen its monthly Pacific Bell
telephone bill climb steadily from $3,000 in April to $72,000 in August.  The
long-distance access codes of the firm were among those traced to Alvord's
telephones, according to investigators the Bee said.

Alvord was reportedly hacking access codes from Sprint, Pacific Bell, and
other companies and was selling them to truck drivers for $60 a month.  Alvord
charged companies making overseas calls and larger businesses between $120 and
$300 a month for the long-distance services of his South Shore Electronics Co.

>From The $muggler

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