1995-09-11 -- Cybersnare Sting -- Arrests -- News Release





Six alleged computer "hackers" arrested in undercover

Secret Service investigation dubbed "Operation Cybersnare"



hack0911.rel

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.



                             --30--



hack0911.rel

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



.



- The revolution WILL be digitized. -

