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Subject: TELECOM Digest V23 #541

TELECOM Digest     Wed, 10 Nov 2004 23:07:00 EST    Volume 23 : Issue 541

Inside This Issue:                             Editor: Patrick A. Townson

    Cyber Crime Tools Could Serve Terrorists - FBI (Lisa Minter)
    Gmail Users Soon Able to Check E-Mail Via Outlook (Lisa Minter)
    FCC Puts VoIP Under Federal Jurisdiction (Lisa Minter)
    Re: "We're From the Government"; NSA Recs on Securing Mac (Kenneth Stox)
    Re: Does Vonage Service work Like SBC? (Tony P.)
    Congress Praises FCC VoIP Ruling (Lisa Minter)
    Special Report: The Phonemasters (Archives Reprint)

All contents here are copyrighted by Patrick Townson and the
individual writers/correspondents. Articles may be used in other
journals or newsgroups, provided the writer's name and the Digest are
included in the fair use quote.  By using -any name or email address-
included herein for -any- reason other than responding to an article
herein, you agree to pay a hundred dollars to the recipients of the
email.

               ===========================

Addresses herein are not to be added to any mailing list, nor to be
sold or given away without explicit written consent.  Chain letters,
viruses, porn, spam, and miscellaneous junk are definitely unwelcome.

We must fight spam for the same reason we fight crime: not because we
are naive enough to believe that we will ever stamp it out, but because
we do not want the kind of world that results when no one stands
against crime.   Geoffrey Welsh

               ===========================

See the bottom of this issue for subscription and archive details
and the name of our lawyer; other stuff of interest.  

----------------------------------------------------------------------

From: Lisa Minter <lisa_minter2001@yahoo.com
Subject: Cyber Crime Tools Could Serve Terrorists - FBI
Date: Wed, 10 Nov 2004 21:56:07 EST


MIAMI (Reuters) - The hacking and identity theft tools now earning big
money for mainly eastern European organized crime could be used by
terrorists to attack the United States, an FBI official said on
Wednesday.

FBI Deputy Assistant Director Steve Martinez said cyber crime was no
longer the domain of teenage geeks but had been taken over by
sophisticated gangs.

"Tools and methods used by these increasingly skilled hackers could be
employed to cripple our economy and attack our critical infrastructure
as part of a terrorist plot," Martinez told a conference in Miami on
Internet security.

People had to assume, he said, that terrorists would seek to hire
hackers to "raise money, aid command and control, spread terrorist
propaganda and recruit more into their ranks and, lastly and most
ominously, attack at little risk."

The seminar in Miami, hosted by Florida International University,
focused on the growing incidence of "phishing," in which hackers send
computer users e-mails to convince them to enter financial data or
passwords in fake Web sites.

Victims can compromise their credit cards, bank accounts and even
their identities.

Martinez, acting head of the FBI's Cyber Division, said the agency had
not seen traditional organized crime in the United States migrate to
the Internet but that eastern European gangs had embraced cyber crime
with enthusiasm.

"They're targeting your money, access to your personal information,
identity. They're doing it on a massive scale. The price of a credit
card number is dropping into the pennies now," he said.

The FBI was trying to convince foreign law enforcement agencies to
crack down on the culprits, he said.

In many former Soviet republics, laws covering cyber crimes were
inadequate and the U.S. Justice Department worked with foreign
governments to fill the legal gaps, he said.

In the meantime, he said the risk of cyber terrorism post-Sept. 11,
2001, should not be ignored.

The Internet could allow attackers to remain anonymous, to strike at
multiple targets from a distance, and escape detection. Critical
infrastructure such as water, power and transportation systems
remained vulnerable, Martinez said.

"In the future cyber terrorism may become a viable option to
traditional physical acts of violence," he said. "Terrorists have
figured out that we have a technological soft underbelly."
          
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For more information go to:
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------------------------------

From: Lisa Minter <lisa_minter2001@yahoo.com>
Subject: Gmail Users Soon Able to Check E-Mail Via Outlook
Date: Wed, 10 Nov 2004 21:57:37 EST


SAN FRANCISCO (Reuters) - Web search leader Google Inc.  said on
Wednesday it will soon make it possible for users of its free Gmail
service to check their e-mail via Microsoft Outlook or on certain
handheld devices such as mobile phones.

Google said it is adding POP, or post office protocol, access to Gmail
for all users over the next couple of weeks. The move will enable
Gmail users to download a copy of their messages through other e-mail
programs, such as Outlook and Eudora, and devices that support POP.

Using POP access, Gmail users would also be able to view their
messages offline.

Google said it already provides free automatic forwarding, which
enables users to send incoming messages to the e-mail of their choice.

"We have no plans to charge for either feature," the company said. 

Google, which had its much anticipated initial public offering in
mid-August, recently has been adding address book and other features
to its advertising-supported Gmail service launched this spring.

Microsoft Corp.and Yahoo Inc.  which compete with Google in Web
search, also offer rival free e-mail services.

People can access POP mail accounts for free through Yahoo Mail, but
forwarding is available only as part of a premium mail service, a
company spokeswoman said.

Representatives of Microsoft's Hotmail service were not immediately
available to comment.

Google shares, which briefly topped 200 after debuting at 85, 
closed at 167.86 on the Nasdaq, off 84 cents, or 0.5
percent.

------------------------------

Date: Wed, 10 Nov 2004 14:20:37 EST
From: Telecom DailyLead From USTA <lisa_minter2001@yahoo.com>
Subject: FCC Puts VoIP Under Federal Jurisdiction


Telecom dailyLead from USTA
November 10, 2004
http://www.dailylead.com/latestIssue.jsp?i=17449&l=2017006

TODAY'S HEADLINES

NEWS OF THE DAY
* FCC puts VoIP under federal jurisdiction
BUSINESS & INDUSTRY WATCH
* Vodafone launches 3G service in Europe, Japan
* Speakeasy plans WiMAX network for downtown Seattle
* Verizon extends 3mbps DSL service
* Cisco, Cablevision report earnings
USTA SPOTLIGHT 
* Carrier Grade Voice Over IP -- Now at www.telecom-bookstore.com
EMERGING TECHNOLOGIES
* Siemens includes Skype VoIP software with Internet adapter
* 20th TV goes wireless with "24" spinoff
REGULATORY & LEGISLATIVE
* Editorial praises VoIP ruling
* Regulations in Brazil lead to cable pirating, companies say
EDITOR'S NOTE
* SmartBrief will not be published Thursday

Follow the link below to read quick summaries of these stories and others.
http://www.dailylead.com/latestIssue.jsp?i=17449&l=2017006

------------------------------

From: Kenneth P. Stox <stox@sbcglobal.net>
Organization: Imaginary Landscape, LLC.
Subject: Re: "We're From the Government...";  NSA Recs on Securing Mac OS
Date: Wed, 10 Nov 2004 18:40:38 GMT


Justin Time wrote:

> Nope.  Windows is the longest running Beta test in history.  Been
> going on for over 10 years now and they are still trying to stabilize
> version 1.0

10 years? Try close to 20 now. If memory serves correct, Microsoft 
announced Windows in late 1984.

------------------------------

From: Tony P. <kd1s@nospamplease.cox.reallynospam.net>
Subject: Re: Does Vonage Service work Like SBC?
Organization: ATCC
Date: Wed, 10 Nov 2004 17:15:31 -0500


In article <telecom23.535.7@telecom-digest.org>, zcarenow@yahoo.com 
says:

> I have SBC and I can go to any room in my house that has a phone jack
> and plug in my phones and it will work. My understanding from what
> I've read is that Vonage works by having you plug the phone cable into
> their Vonage device and plug the other end to your phone.  Now how
> will this allow me to talk to someone from a phone in my master
> bedroom as opposed to another room with a phone jack. Thanks in
> advance.

> [TELECOM Digest Editor's Note: The answer is yes and no. YES it will
> work if it is wired up correctly, but NO, it will not work and may 
> well fry your Vonage adapter if it accidentally comes in contact
> with the SBC (or for that matter, any telco) lines. Telephones do 
> send various amounts of voltage down the line; frequently it is very
> benign to human beings who happen to touch the wires, but it and 
> the voltage coming out of/going into a telephone adapter for VOIP
> do *not* get along. Make positively sure the lines from telco are
> totally isolated at the demarc (point of entry into your house) from
> your house wiring before you extend your Vonage adapter around the
> house through other connector boxes, etc. Read the message in this
> issue, some email correspondence I have had with another guy who
> 'just assumed' the wiring in his house was correct and found out
> the Vonage adapter box did not like it at all.  PAT]

In my case I just threw a splitter on the jack where I plugged the
VoIP line into and disconnected the NID by pulling out the RJ11 plug
that connects the home wiring to the network.

Of course tagging it also helps immensely when some lame brained tech 
comes out to install the neighbors phone; well you know the drill. 

------------------------------

From: Lisa Minter <lisa_minter2001@yahoo.com)
Date: Wed, 10 Nov 2004 19:28:12 -0500
Subject: Congress Praises FCC VoIP Ruling


http://www.wi-fiplanet.com/voip/article.php/3433931

By Roy Mark

Both sides of the Voice over IP (define) divide weighed in on
yesterday's Federal Communications Commission (FCC) ruling that
stipulates the interstate nature of VoIP services.

Two lawmakers were quick to agree with FCC Chairman Michael Powell who
said Tuesday's ruling "lays a jurisdictional foundation" for future
telecom reform. However, rural telecom and consumer groups saw little
to celebrate in the agency's decision.

[Jack Decker Comment: I have only heard of one or possibly two
misguided consumer groups, particularly the one in Ohio, that are
having a fit about this.  I'd still like to know where the group in
Ohio gets their funding.]

"I strongly support the FCC's decision to exempt Internet telephony
from state regulation," wrote U.S. Rep. Joe Barton (R-Tex.), chairman
of the House Energy and commerce Committee. "To subject this emerging
global technology to the quagmire of 51 possible sets of regulations
in the U.S. alone would suffocate both quality and cost-efficient
choice.

"With this decision, Congress and the FCC can work in the coming year
to allow VoIP services to become a viable alternative to traditional
telephone service," Barton added. "I look forward to creating clear
rules for all IP-enabled services."

In the Senate, New Hampshire Republican John Sununu, a member of the
Senate Commerce Committee, praised the FCC for "following the lead
established" by his legislation calling for the pre-emption of state
regulation of broadband voice services. Like Barton, Sununu predicted
more congressional action on the issue.

"Comprehensive federal legislation is needed now to deal with expected
legal challenges to this FCC decision, and to address other aspects
involving this technology," he said in a statement.

Full story at:
http://www.wi-fiplanet.com/voip/article.php/3433931

------------------------------

Date: Wed, 10 Nov 2004 22:42:56 EST
From: TELECOM Digest Editor <ptownson@telecom-digest.org>
Subject: The Phonemasters (Archives Reprint)


Five years ago in the Digest, we had an interesting report which
was filed in our security area of the archives. In view of all
the phishing expeditions we see these days, I thought this might
be worth reviewing once again. It was originally given to us by
Tad Cook (tad@ssc.com).

PAT

Subject: Special Security Report: The Phonemasters
Date: Sun, 03 Oct 1999 23:40:00 EDT
Sender: ptownson@massis.lcs.mit.edu

This TELECOM Digest special report is on the topic of the FBI
investigation of 'The Phonemasters', a recent group of hackerphreaks
who were investigated, arrested, put on trial and convicted. This will
be a permanent addition to the Telecom Archives in the
http://telecom-digest.org/archives/security-fraud area.


   Subject: The Phonemasters
   Date: Sun, 3 Oct 1999 19:25:36 -0700 (PDT)
   From: tad@ssc.com (Tad Cook)


How an FBI Cybersleuth Busted a Hacker Ring

By JOHN SIMONS
Staff Reporter of THE WALL STREET JOURNAL

DALLAS -- In a federal courtroom here, Calvin Cantrell stands
silently, broad shoulders slouched. His lawyer reads from a short
letter he has written:

"My parents taught me good ethics, but I have departed from some of
these, lost my way sometimes," the letter states. "I was 25 and living
at home. No job, and no future. All I ever really wanted was to
work with computers."

Mr. Cantrell certainly did work with computers -- both his own, and,
surreptitiously, those of some of the largest companies in the
world. He was part of a ring of hackers that pleaded guilty here to
the most extensive illegal breach of the nation's telecommunications
infrastructure in high-tech history.

And sitting behind him in court as he was sentenced two weeks ago was
the accountant-turned-detective who caught him: Michael Morris. A
decade earlier, Mr. Morris, bored with accounting work, left a $96,000
job at Price Waterhouse and enrolled in the FBI academy, at $24,500 a
year. Mr. Cantrell's sentencing was the final act in a five-year drama
for Mr. Morris, and secured his reputation as the FBI's leading
computer gumshoe.

The tale of Mr. Morris and Mr. Cantrell is among the first cops-and-
robber stories of the New Economy, involving, among other things, the
first-ever use of an FBI "data tap." It illustrates how the nation's
law-enforcement agencies are scrambling to reinvent their profession
in a frantic effort to keep pace with brilliant and restless young
hackers.

The story also shows that hacking's potential harm is far more ominous
than theft of telephone credit-card numbers. Mr. Cantrell was part of
an eleven-member group dubbed "The Phonemasters" by the FBI. They were
all technically adept twenty-somethings expert at manipulating
computers that route telephone calls.

The hackers had gained access to telephone networks of companies
including AT&T Corp., British Telecommunications Inc., GTE Corp., MCI
WorldCom (then MCI Communications Corp.), Southwestern Bell, and
Sprint Corp. They broke into credit-reporting databases belonging to
Equifax Inc. and TRW Inc. They entered Nexis/Lexis databases and
systems of Dun & Bradstreet, court records show.

The breadth of their monkey-wrenching was staggering; at various
times, they could eavesdrop on phone calls, compromise secure
databases, and redirect communications at will. They had access to
portions of the national power grid, air-traffic-control systems and
had hacked their way into a digital cache of unpublished telephone
numbers at the White House. The FBI alleges, in evidence filed in
U.S. District Court for the Northern District of Texas, that the
Phonemasters had even conspired to break into the FBI's own National
Crime Information Center.

Unlike less-polished hackers, they often worked in stealth, and
avoided bragging about their exploits. Their ultimate goal was not
just fun, but profit. Some of the young men, says the FBI, were in the
business of selling the credit reports, criminal records, and other
data they pilfered from databases. Their customers included private
investigators, so-called information brokers and -- by way of
middlemen -- the Sicilian Mafia.  According to FBI estimates, the gang
accounted for about $1.85 million in business losses.

"They could have -- temporarily at least -- crippled the national
phone network. What scares me the most is that these guys, if they had
had a handler, whether criminal or state-sponsored, could have done a
lot of damage," says Mr. Morris. "They must have felt like cyber-gods."

With the exception of Mr. Cantrell, none of the defendants in the
Phonemasters case would comment on the matter. Others are thought to
remain at large. This is the story of Mr. Cantrell and two accomplices,
largely put together from federal district court records and FBI interviews.

Mr. Morris first learned of the group in August 1994, when he got a
phone call from a Dallas private investigator, saying Mr. Cantrell had
offered to sell him personal data on anyone he wished. He even offered
a price list: personal credit reports were $75; state motor-vehicle
records, $25; records from the FBI's Crime Information Center, $100. 
On the menu for $500: the address or phone number of any "celebrity/
important person."

Mr. Morris immediately opened an investigation. Only 33 years old at
the time, he had taken an annual pay cut to join the FBI just five
years earlier.  He had been a tax consultant at Price Waterhouse, and
despised the work. "I was young and making the big bucks, but every
morning I would think 'God, I don't want to go to work.' "

Tall, square-jawed and mustachioed, Mr. Morris began working white-collar
crimes when he arrived at the Dallas FBI field office. He took on a
few hacker cases and realized he liked the challenge. "These guys are
not the kind who'll rob the convenience store then stare right into
the security camera," he says. "Trying to be the Sherlock Holmes of
the Internet is hard when the fingerprints on the window can be so
easily erased."

Mr. Morris convinced the private investigator to meet with Mr. Cantrell
while wearing an audio taping device. After reviewing the tapes, he
was certain that he was onto something big. He applied for and received
court authority to place a digital number recorder on Mr. Cantrell's
phone lines, which would log numbers of all outgoing calls. It showed
that Mr. Cantrell frequently dialed corporate telephone numbers for
AT&T, GTE, MCI, Southwestern Bell and Sprint. Mr. Cantrell had also
placed calls to two unlisted numbers at the White House, which further
piqued Mr. Morris's interest.

So, late that summer, Mr. Morris took an unprecedented step. He began
writing a 40-page letter to the FBI's Washington headquarters, the
Department of Justice and the federal district court in Dallas. Recording 
Mr. Cantrell -- now his central suspect -- while on the phone wasn't
sufficient for the job that faced him, he believed. Instead, he needed
new federal powers. He asked for Washington's permission to intercept
the impulses that traveled along Mr.  Cantrell's phone line as he was
using his computer and modem.

"It's one of the hardest techniques to get approved, partly because it's 
so intrusive," says Mr. Morris, who spent the next month or so consult-
ing with federal authorities. "The public citizen in me appreciates
that," he says.  Still, the long wait was frustrating. "It took a lot
of educating federal attorneys," he says.

Once authorities said yes, Mr. Morris faced another obstacle: The
equipment he needed didn't exist within the FBI. Federal investigators
had experimented with a so-called data-intercept device only once
before in a New York hacker case a year earlier. It had failed miserably.

Mr. Morris and technicians at the FBI's engineering lab in Quantico,
Va., worked together to draft the specifications for the device Mr. 
Morris wanted.  It would need to do the reverse of what a computer's
modem does. A modem takes digital data from a computer and translates
it to analog signals that can be sent via phone lines. Mr. Morris's
device would intercept the analog signals on Mr. Cantrell's phone line
and convert those impulses back to digital signals so the FBI's
computers could capture and record each of a suspect's keystrokes.

While waiting for the FBI to fit him with the proper gear, Mr. Morris
contacted several of the telephone companies to alert them that they
had been victimized. The reception he got wasn't always warm. "It's
kind of sad. Some of the companies, when you told them they'd had an
intrusion, would actually argue with you," he said.

GTE was an exception. Mr. Morris discovered that Bill Oswald, a GTE
corporate investigator, had opened his own Phonemasters probe. Mr.
Oswald and Mr.  Morris began working together and uncovered another of
Mr. Cantrell's schemes: He and some friends had managed to get their
hands on some telephone numbers for FBI field offices. They entered
the telephone system and forwarded some of those FBI telephones to
phone-sex chat lines in Germany, Moldavia and Hong Kong. As a result
of the prank, the FBI was billed for about $200,000 in illegal calls.

Mr. Morris also learned that on Oct. 11, 1994, Mr. Cantrell hacked
GTE's computer telephone "switch" in Monticeto, Calif., created a fake
telephone number and forwarded calls for that number to a sex-chat
line in Germany. The FBI isn't sure how Mr. Cantrell convinced people
to call the number, but court records show that Mr. Cantrell received
a payment of $2,200 from someone in Germany in exchange for generating
call traffic to the phone-sex service.

In early December 1994, Mr. Morris's "analog data intercept device"
finally arrived from the FBI's engineering department. It was a $70,000 
prototype which Mr. Morris calls "the magic box."

On Dec. 20, Mr. Morris and other agents opened up their surveillance
in an unheated warehouse with a leaky roof. The location was ideal
because it sat between Mr. Cantrell's home and the nearest telephone
central office. Mr.  Morris and nine other agents took turns overseeing
the wiretap and data intercepts. The agents often had to pull a tarp
over their workspace to keep rain from damaging the costly equipment.

As middle-class families go, the Cantrells seem exemplary. Calvin's
father, Roy, was a retired detective who had once been voted "Policeman 
of the Year" in Grand Prairie, the suburb west of Dallas where they
live. His mother, Carol, taught Latin and English at Grand Prairie
High School, where Calvin graduated in 1987 with above-average
grades. As a student, he was no recluse.  He had a small circle of
friends who shared his love of martial arts, video games, and spy
movies. Mr. Cantrell's longtime friend, Brandon McWhorter, says Calvin
was always a fun-loving guy, but there was one thing about which he
was very serious.

"He would always talk to me about religion," says Mr. McWhorter. "He
held very strong religious beliefs."

After high school, Mr. Cantrell continued to live at home while taking
classes at the University of Texas at Arlington and a local community
college.

He held a series of odd jobs and hired himself out as a deejay for
weddings and corporate parties. Mr. Cantrell balanced, school, work,
family and friends even as he began hacking more often. His parents
became suspicious, but said nothing. The family had three phones;
Calvin stayed on his 15 hours a day.

"They'd go in my room and see all the notes and the phone numbers.
Even though they couldn't put it together technically, they knew
something was up," says Mr. Cantrell. "They were kind of in denial. My
parents were pretty soft."

Mrs. Cantrell says Calvin had been so well behaved that she never
suspected his computer activities were more than fun and games. "I
wish I had known what was going on. Unfortunately, my son was smarter
than I was." (Calvin's father passed away last year.)

At 8:45 on the night of Dec. 21, just four days before Christmas, Mr.
Cantrell went online. Using an ill-gotten password, he entered a
Sprint Corp.  computer, where he raided a database, copying more than
850 calling-card access codes and other files, court records in the
case show. The Phonemasters often got passwords and other key inform-
ation on companies in a low-tech approach called "Dumpster diving,"
raiding the trash bins of area phone firms for old technical manuals,
phone directories and other company papers. This often allowed
Mr. Cantrell to run one of his favorite ruses -- passing himself off
as a company insider.

"I'd call up and say, 'Hi, I'm Bill Edwards with systems administration.' 
I'd chat with them for a while, then I'd say 'We're doing some network
checkups today. Can you log off of your computer, then tell me every
character you're typing as you log back on?' A lot of people fell for
that," Mr. Cantrell says.

After hacking into the Sprint database that evening, Mr. Cantrell
talked to another hacker, Corey Lindsley, over the phone. He'd 'met'
Mr. Lindsley, and another hacker, John Bosanac, in 1993 while surfing
the murky world of hacker bulletin boards. Mr. Cantrell then sent the
copied files to Mr. Lindsley, who was a student at the University of
Pennsylvania in Philadelphia.

Mr. Morris's equipment captured everything -- voice and data. It was
an FBI first. "We're sitting in this place that looked liked a bomb
pit, but the atmosphere was really exciting," says Mr. Morris. "We
were ecstatic."

As the days passed, the FBI wiretap generated stacks upon stacks of
audiotapes and data transcripts. Some was just idle talk among
friends, the occasional call to finalize dinner plans, lots of
workaday chatter. But the incriminating evidence mounted. "It's great,
you know. I really love fraud," joked Mr. Bosanac, a Californian who
was musing with Mr. Cantrell about the various technical methods of
using other people's cellular telephone accounts to place free
calls. "Fraud is a beautiful thing."

Family conversations even entered the investigation. On Jan. 7, for
instance, Mr. Cantrell called his mother from a friend's house and
asked her find an MCI Corp. manual on his shelf. He then asked her to
read him a set of directions for accessing MCI's V-NET computer
system. Mrs. Cantrell read the material but asked her son whether he
was supposed to have the book, citing warnings that stated its
contents were restricted to MCI employees. Mr.  Cantrell just avoided
his mother's question. The FBI data-tap captured every word.

Still, the process took its toll on the FBI team, especially coming
during the holidays. "It was stressful that the wiretap was going 24
hours a day, seven days a week. I had to write up the legal documents
and it's tough making people work through Christmas," Mr. Morris
said. On top of that, he had to keep records of his findings, and
every ten days he had to reapply to the court to prove that his
wiretap was yielding evidence.

By late January, the FBI had begun to get a clear profile of Mr. 
Cantrell and his hacker friends. Mr. Lindsley, it appeared, was the
group's acerbic leader, directing much of the hacking activity. Over
phone lines, the FBI heard him bragging about how he had given a
Pennsylvania police department "the pager treatment" in retaliation
for a speeding ticket he received. Mr. Lindsley had caused the police
department's telephone number to appear on thousands of pagers across
the country. The resulting flood of incoming calls, Mr. Lindsley
bragged, would surely crash the department's phone system.

They also enjoyed collecting information about film stars, musicians
and other famous people. Mr. Cantrell has admitted that he broke into
President Clinton's mother's telephone billing records in Arkansas to
obtain a list of unpublished White House numbers. The men, says the
FBI, even made harassing phone calls to rock star Courtney Love and
former child actor Danny Bonaduce using pilfered numbers.

They weren't without fear of getting caught. On the evening of Jan. 17,

for instance, there was a clicking on the phone line as Messrs. Bosanac,
Cantrell, and Lindsley shared a three-way conference call. "What the
hell happened?" asked Mr. Bosanac, according to an FBI transcript of
the conversation.

"That was the FBI tapping in," laughed Mr. Cantrell.

"Do you know how ironic that's gonna be when they play those tapes in
court?"  Mr. Lindsley said. "When they play that tape in court and
they got you saying it was the FBI tapping in?"

On Jan. 18, the FBI overheard Messrs. Cantrell, Bosanac and Lindsley
on another conference call. With the other two men giving directions,
Mr.  Cantrell dialed his computer into Southwestern Bell's network and
copied a database of unlisted phone numbers. The three men then
discussed plans to write a computer program that could automatically
download access codes and calling-card numbers from various telephone
systems. They also talked about the chance that the FBI would one day
track them down.

"Just remember, nobody f-- rats anybody out," said Mr. Lindsley to the
others. "No deals."

"Yeah, no deals is right," replied Mr. Bosanac.

"No deals. I'm serious. I don't care what your f-- lawyers tell you,"
said Mr. Lindsley.

Mr. Cantrell said nothing.

Later that morning, between 5:09 a.m. and 7:36 a.m., Mr. Cantrell
entered Sprint's computer system and downloaded about 850 Sprint
calling-card codes.  He then transferred those codes to a man in
Canada. The codes would allow anyone who purchased them to place free
international phone calls. Mr. Morris would later learn that a contact
in Canada paid Mr. Cantrell $2 apiece for each code, court records
show. The Phonemasters most likely did not know -- or care -- where
the codes ended up, but the FBI traced them and found some ended up in
the hands of a Sicilian Mafia operative in Switzerland.

On Jan. 23, while probing a U S West telephone database, Mr. Cantrell,
Mr.  Bosanac, Mr. Lindsley and others stumbled over a list of telephone
lines that were being monitored by law enforcement. On a lark, they
decided to call one of the people -- a suspected drug dealer, says
Mr. Morris -- and let him know his pager was being traced by the police.

On Jan. 27, the group was clearly feeling paranoia about being caught,
prompting Mr. Lindsley to tell his accomplices to pull as many Sprint
codes as quickly as they could. Mr. Cantrell began to have reservations.

"What if I stopped before all of y'all?" Mr. Cantrell asked Mr. Lindsley.
"Would you applaud my efforts?"

"No," said Mr. Lindsley. "I don't think there's any reason to stop. 
What are you worried about?"

"Uh, I'm not worried about anything. I'm just saying, uhm. There might
 ...  There might come a time here where I don't have time for this."

He added a little later: "I, you know, really like it. But, I don't
know, I just ... Eventually, I don't see myself doing a lot of illegal
things."

Mr. Lindsley continued to prod Mr. Cantrell to speed up the download
of stolen codes by spending more time online and using two phones.

"I'm telling you, you run two lines around the clock," Mr. Lindsley
said.

"You can't run them around the clock," said Mr. Cantrell.

"Why not?"

"Oh, come on. I think that's pushing it too hard."

"I think you just got a weak stomach there, boy."

By late February, things began to get tense. One of Mr. Cantrell's
hacker friends informed him that his number had shown up in a database
of phone numbers being monitored by the FBI. In all the excitement of
burglarizing databases and rerouting phone calls, the Phonemasters had
neglected to check their own phone lines for any signs that law enforce-
ment might be listening in.

Mr. Morris hastily arranged for an FBI raid. On Feb. 22, 1995, agents
raided Mr. Cantrell's home, Mr. Lindsley's college dorm room, and
burst into Mr. Bosanac's bedroom in San Diego.

For Mr. Morris, the climactic raid was only the start of a long battle
to bring the hackers to justice. Because of the complicated nature of
his evidence gathering, it took him more than two years to compile the
most salient portions of the wiretap transcripts and data-tap evidence.
"All the documents and tapes from this case could fill a 20-by-20
room," Mr. Morris explains. "And at the time, I was the only computer
investigator for all of Texas."

In the meantime, as federal prosecutors slowly geared up for a trial,
Mr. Cantrell tried to get on with his life. "I spent the first few
weeks after the raid being paranoid and wondering what would happen,"
he says.  Occasionally, Mr. Morris and other agents would call him,
asking questions about some of the systems he had hacked. By the
summer of 1995, at the urging of his mother, Mr. Cantrell started
attending church again. He scored the first in a string of professional
computing jobs, doing systems-administration work for a company called
Lee Datamail in Dallas. He neglected to tell his employers about the
FBI case. "It's been mental torture for the last four years, not
knowing," says Mr. Cantrell. "Can I go to school, move to another
state? That kind of thing messes with your head."

Over time, Mr. Cantrell says he had come to seriously regret what he
had done and the $9,000 he says he made from selling codes wasn't
worth the trouble.  "Looking back, it was all crazy. It was an
obsession. I wanted to see how much I could conquer and a little power
went to my head." Mr. Cantrell notes that he has since tried to make
amends, even helping the phone companies plug their security holes and
helping the FBI gather more information on some of the group's members
who haven't yet been apprehended.

The matter finally seemed near conclusion this March when Mr. Morris
was able to play "a couple of choice tapes" in separate meetings with
Messrs.  Cantrell, Bosanac and Lindsley. Afterward, all three agreed
to plead guilty to federal charges of one count of theft and possession 
of unauthorized calling-card numbers and one count of unauthorized
access to computer systems. Chief Judge Jerry Buchmeyer ordered a
presentencing investigation.

During a hearing on the matter, Mr. Lindsley's attorney tried to argue
that the FBI had wildly overstated the $1.85 million in losses that
her client's hacking had allegedly caused. But in the end, Judge
Buchmeyer rejected the argument and sentenced him to 41 months in
prison. Mr. Bosanac, in the meantime, has asked that his sentencing
hearing be moved to San Diego, where he lives.

As for Mr. Cantrell, Judge Buchmeyer lauded his "acceptance of guilt."
He could have been sentenced to three years in federal prison; instead
he was given two. He reports to federal prison in January of next
year.

Mr. Morris, meanwhile, has used his data-tap method in several other
cases; he also travels around the country and the world advising
law-enforcement agencies on how to conduct state-of-the-art investi-
gations of hacker crimes.

------------------------------

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