1995-09-11 -- Cybersnare Sting -- Arrests -- News Release
Six alleged computer "hackers" arrested in undercover
Secret Service investigation dubbed "Operation Cybersnare"
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MORRISTOWN, NJ -- Six alleged computer "hackers" have been
arrested and more than 20 computer systems seized in a seven-
state U.S. Secret Service undercover investigation, dubbed
"Operation Cybersnare," targeting persons who used the Internet
and a private bulletin board system to allegedly deal in stolen
cellular telephone and credit card data worth millions of
dollars, Secret Service Special Agent in Charge Peter A.
Cavicchia II announced today.
The arrests of defendants in Huntington Beach, California;
Brooklyn, New York; Detroit, Michigan; and Houston, Texas capped
a sting operation in which an undercover Secret Service Special
Agent operated a Bergen County, New Jersey-based bulletin board
system called "Celco 51," according to U.S. Attorney Faith S.
Hochberg.
In addition to search warrants executed in the states in which
the defendants were apprehended, search warrants were also
executed for computer hardware and data in New Jersey, Virginia,
Connecticut and Alaska.
The arrests and warrants flowing from the investigation mark the
first successful law enforcement "sting" operation that
identified persons allegedly involved in the intrusion of
telecommunication computer networks, the computer theft of credit
card account numbers and related personal information, and the
theft of information used to obtain free cellular telephone
service, Cavicchia said.
Arrested late Friday were
Richard Lacap, of Katy, Texas, who used the computer alias of
"Chillin" and Kevin Watkins, of Houston, Texas, who used the
computer alias of "Led." Lacap and Watkins were charged by
criminal Complaint with conspiring to break into the computer
system of an Oregon Cellular Telephone company;
Jeremy Cushing, of Huntington Beach, California, who used the
computer alias of "Alpha Bits," was charged with trafficking in
cloned cellular telephone equipment and stolen access devices
used to program cellular telephones;
Frank Natoli, of Brooklyn, New York, who used the computer alias
of "Mmind." Natoli was charged with trafficking in stolen access
devices used to program cellular telephones;
Al Bradford, of Detroit, Michigan, who used the computer alias of
"Cellfone," was charged with trafficking in unauthorized access
devices used to program cellular telephones;
Michael Clarkson, of Brooklyn, New York, who used the computer
alias of "Barcode," was charged with possessing and trafficking
in hardware used to obtain unauthorized access to
telecommunications services.
Lacap and Watkins face maximums of five years in federal prison
and $250,000 fines if convicted on the charge.
Natoli, Bradford, and Clarkson each face a maximum of 10 years in
federal prison, $250,000 fines or twice the value of the property
obtained by the offense, if convicted. Cushing, if convicted,
faces a maximum of 15 years in prison and a fine of $250,000 or
twice the value of the property obtained by the offense.
Under U.S. Sentencing Guidelines, the judge to each defendant's
case is assigned would, upon conviction, determine the actual
sentence based upon a formula that takes into account the
severity and characteristics of the offense, and the defendant's
criminal history, if any, Hochberg said.
Parole, however, has been abolished in the federal system. Under
Sentencing Guidelines, defendants who are given custodial terms
must serve nearly all that time, Hochberg explained.
All six were to have made initial appearances over the weekend
before U.S. Magistrate Judges in the federal districts in which
they were arrested. Bail was to be set for each defendant. All
were to be ordered to make an initial appearance in Newark
Federal Court before U.S. Magistrate Judge Dennis M. Cavanaugh,
on Sept. 19, 1995, at 2:30 P.M., Hochberg said.
In addition to the many computer systems seized by secret service
agents from the arrested individuals, special agents in New
Jersey, Alaska, Connecticut and Virginia seized computer systems
from six other alleged "hackers" identified as a result of the
New Jersey investigation.
According to the Criminal complaints filed against the six
alleged hackers arrested on Friday, the investigation began in
January of 1995 when a Special Agent for Secret Service, acting
in an undercover capacity, established the "Celco 51" computer
bulletin board ("BBS").
A computer "hacker" is an individual with expertise in gaining
unauthorized entry into computer systems. Celco 51 was
established through the use of a telephone facility subscribed to
a location in Bergen County, New Jersey.
A computer bulletin board is an electronic meeting place where
individuals using computers may exchange information. Although
many bulletin board systems are operated as national commercial
services available to the public, thousands of smaller computer
bulletin boards are privately owned, the attachments to the
Complaints state.
The components necessary to establish a bulletin board include a
computer system, modem, telephone line, and communications
software. A computer bulletin board may also include various
peripheral hardware, software, networking hardware and software,
passwords and data security devices, data, and documentation.
During the course of the investigation law enforcement identified
persons who were involved in the intrusion of telecommunication
computer networks and the theft of information used to obtain
free cellular telephone service. Through computer contact via
the Internet, the undercover agent advertised that Celco 51 was a
bulletin board catering to individuals involved in unauthorized
computer intrusion and all aspects of computer fraud, including
cellular telephone fraud, according to the federal Complaints.
The type of cellular telephone fraud targeted in this case has
been frequently accomplished through the theft of Electronic
Serial Numbers ("ESNs") and Mobile Identification Numbers
("MINs") (collectively "ESNs and MIN pairs"), which constitute
the information used to encode and program cellular telephones.
These pairs are programmed into a cellular telephone to provide
the telephone user with telephone service and to permit the
establishment of a billing account for each the user. In recent
years, individuals with computer expertise have gained
unauthorized entry into computer systems operated by cellular
telephone providers and stolen blocks of ESNs and MIN pairs,
according to court documents.
After an active ESN and MIN pair is stolen, it may be programmed
into a cellular telephone such that this "cloned" telephone may
be used to make unauthorized telephone calls that will be charged
to the account of the individual whose cellular telephone
legitimately possesses the ESN and MIN pair. Such fraud is
generally not discovered until the legitimate owner reviews his
or her monthly bill and discovers the unauthorized telephone
calls reflected on it. The cellular industry has estimated that
it suffers losses in excess of $1 million per day as a result of
cellular telephone fraud.
Cavicchia credited the cooperation provided by AT&T Wireless
Communications; The Cellular Telecommunications Industries
Association; and numerous cellular telephone providers and
landline companies for their cooperation during the
investigation.
The United States is represented in court by Assistant U.S.
Attorneys Donna Krappa and Elliot Turrini, of the U.S. Attorney's
Criminal Division in Newark.
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Cybersnare Sting -- Arrests
News Release -- 1995-09-11
U.S. Attorney for the District of New Jersey
Faith S. Hochberg, United States Attorney
970 Broad Street, Seventh Floor
Newark, New Jersey 07102
Main Office Number: 201-645-2700
Public Affairs Office: 201-645-2888
Dick Lavinthal: Spokesman and Public Affairs Specialist
Jennifer Salvato: Public Affairs Specialist
DOJ Eagle: ANJ01(PUBAFAIR)
Internet Mail -- rlavinth@justice.usdoj.gov
World Wide Web -- http://www.usdoj.gov/press.html
Gopher -- gopher://gopher.usdoj.gov