Crime

A hacker who demanded $50,000 from Symantec to not release stolen computer code from the computer security firm says the company was tricked into offering the bribe and has since released some of the stolen code, The Washington Post reports.

The New York Times says one of the reasons why the two sides in the debate over online piracy legislation are having trouble finding a compromise is that they have yet to agree on the scope of the problem.

Sprint says it is close to shutting down parts of the Nextel network that have proved to be a costly distraction since the two companies merged seven years ago, CNET reports.

The wireless industry group CTIA in a blog post examines whether it's legal for political campaigns to call voters on their cell phones.

Fox News details why wireless carriers really don't like the iPhone.

In its first earnings report since going public, the online deal provider Groupon says it lost money in the last quarter of 2011, according to the Wall Street Journal.

Read all of today's e-Reads on our Tech page.

A day after major websites protested legislation aimed at online piracy, the Justice Department shut down one of the world's largest file-sharing sites and charged its executives with violating piracy laws.

Seven Megaupload employees, including founder Kim Dotcom, face charges ranging from conspiracy to money laundering. Dotcom and three others have been arrested in New Zealand, at the request of U.S. officials, according to a Justice Department statement.

According to the indictment, filed in the U.S. District Court of for the Eastern District of Virginia, Megaupload and a related website stole and distributed copyrighted content.

Megaupload had the support of many musicians, including Alicia Keys and Kanye West, according to the Associated Press.

Before Megaupload.com was taken down on Thursday, the company issued a statement disputing the charges.

"The fact is that the vast majority of Mega's Internet traffic is legitimate, and we are here to stay," the company said, calling the case "grotesquely overblown."

Senate Judiciary Chairman Patrick Leahy, D-Vt., who is fighting to have his anti-piracy Protect IP Act bill passed in the Senate, said the case underscores the need for his legislation, which targets foreign websites that offer counterfeit goods and pirated music, movies and other content.

"Today's action by the Department of Justice against the leaders of Megaupload.com shows what law enforcement can do to protect American intellectual property that is stolen through domestic websites," Leahy said in a statement. "Unfortunately, there are no tools in the arsenal to protect that same American intellectual property from theft by websites hosted and operated overseas."

As Britain continues to be embroiled by allegations of hacking and bribery at Rupert Murdoch's News Corp.,, Rep. Bobby Rush, D-Ill., says members of Congress should help ensure that American broadcasters serve the public interest.

"Media ownership in America is a privilege, not a right, and it's based upon trust and responsibility," he told communications staff on Tuesday. "First Amendment freedom of the press is critical to our democracy and must never be compromised by corrupt and illegal practices."

News Corporation, which owns Fox News, The Wall Street Journal, New York Post, and dozens of TV stations in America, is under fire after reporters at one of its London newspapers were accused of hacking the telephone voice mail accounts of thousands of people. The paper, The News of the World, has since been shut down but Murdoch and other top executives continue to face heat from lawmakers on both sides of the Atlantic.

Rush, who sits on the House Energy and Commerce Communications and Technology Subcommittee, said he is confident that the Federal Bureau of Investigation will determine whether any similarly illegal activity happened in the United States. "I am especially interested in knowing whether there was telephone and voicemail hacking in the U.S.," he said. "Were bribes paid to cover up hacking here?"

Although the FBI and other legal authorities will ultimately handle any questions of illegal activity, Rush said members of Congress need to ensure that broadcasters are acting in the best interest of the public.

"The public airwaves belong to the American people... And we are elected to make sure that those who are licensed to serve the public interest really do so and reflect who we are as a nation," he said.

Despite calls for regulators to break up News Corporation's vast international media holdings, Rush said consolidation doesn't automatically lead to corruption. The Federal Communications Commission, which regulates News Corporation's broadcast TV stations, has declined to wade into the controversy and analysts say it's unlikely that the media giant will lose its broadcast licenses.

The scandal over alleged phone hacking and bribery at one of Britain's largest newspapers grows stranger every day, even as the controversy sparks more questions in the United States.

According to the Guardian, a whistleblower involved in the case was found dead in his home on Monday. Sean Hoare was a former News of the World reporter and first claimed that the editor of the paper was aware of the phone hacking.

His death was not viewed as suspicious, but added a morbid twist to a controversy that has already led to the demise of the News of the World and the resignation of top British police officials and executives in Rupert Murdoch's News Corporation.

On Monday, Rep. Mary Bono Mack, R-Calif., sent a letter to five major telecom trade associations asking what steps are being taken to prevent similar hacking in the United States.

"Understanding that the events in the United Kingdom have not been connected to any activity within the United States, I nonetheless believe it's critically important to ask American industries involved in all parts of the communications stream of commerce - from device manufacturers to fixed wire and wireless providers - whether they are satisfied that sufficient safeguards are in place to prevent similar privacy breaches here in the United States," Mack wrote.

The supercharged controversy is threatening to complicate the Federal Communications Commission's media ownership review, which is expected to be released later this year.

Read more on the potential debate over media rules on our Tech page.

If you get stopped by the police in Houston, it will take them just 16 seconds to compare your fingerprints to the 2 million that are in a database of terrorists, sex offenders, criminals with outstanding arrest warrants and others.

The Repository for Individuals of Special Concern system is part of the FBI's new nationwide Next-Generation Identification system that eventually will employ a host of new technologies to more quickly and accurately identify criminal suspects, Nextgov.com reported.

"Most criminals don't carry IDs, or if they do, they're fake IDs," said John Traxler, NGI program manager at the FBI's criminal justice information services division. The new identification system enables police officers to use a handheld fingerprint reader to send prints through a squad car's radio to the FBI's database and learn almost instantly whether there is a match.

If not, don't relax yet. Your prints also can be compared to 70 million stored in a much larger database. That will take about 30 minutes.

For now, the NGI system, which began operating Feb. 25, handles fingerprints only. But during the next several years, new biometric capabilities will be added to make identification possible through facial recognition technology, iris patterns, and digital photographs of scars, tattoos and other physical markings. To read more, click here.

Internet crime has become increasingly pervasive and 2010 had the second-highest number of complaints of any year in the past decade, according to a new government report released Thursday.

Last year the Justice Department's Internet Crime Complaint Center, known as IC3, received 303,809 reports of Internet Crime. On Thursday the center released its 2010 Internet Crime Report, outlining the extent of online criminal activity.

"Internet crime has affected millions across the country, and the great thing about IC3 is that we have adapted our resources to meet this threat," said Don Brackman, director of the National White Collar Crime Center, which oversees IC3 in partnership with the FBI. "We have implemented new tools to help law enforcement bring online criminals to justice."

The most common complaint was non-delivery of payment or merchandise, while scams using the FBI's name and identity theft also accounted for many of the complaints. Americans reported an average of 25,317 crimes a month, with almost half of those complaints referred to law enforcement for further investigation, according to the report.

The full report is available online, with data on various crimes, victims and perpetrators, as well as state-specific data.

The FBI came to Congress Thursday to outline the problems law enforcement officials are increasingly facing in executing court ordered wiretaps, but did not offer a proposed solution for lawmakers to consider.

During a hearing before the House Judiciary Crime, Terrorism and Homeland Security Subcommittee, even critics acknowledged law enforcement faces a problem but there was much debate over what should be done to address it. Under the 1994 Communications Assistance for Law Enforcement Act, telecommunications companies are required to develop and deploy solutions to enable court-ordered wiretaps.

However, FBI General Counsel Valerie Caproni and Smithfield, Va., Police Chief Mark Marshall, who testified for the International Association of Police Chiefs, argued that they increasingly find that some telecom providers, particularly those not covered by CALEA, are unable to execute the requested wiretaps.

Caproni said law enforcement officers need to know that when they go to a communications provider with a wiretap order, that the provider will have the technical ability to carry out that court order. She said as technology has advanced, law enforcement has faced challenges getting even basic information sought by a pen register request, which seek the names and telephone numbers of suspected criminals.

When asked what specific changes the FBI is seeking, Caproni said the Obama administration is still developing its policy proposal and expects to release something soon. After the hearing, she said such a proposal may be done by spring.

The New York Times reported last fall that the administration would like all communications providers whether it's a telephone company or Internet messaging service to be able to comply with a wiretap order seeking real-time access to communications.

While the administration has yet to detail a specific proposal, some Democratic members of the committee and others said they worry that the FBI wants to require telecom providers to build back-door access into their networks.

"Forcing telecom providers to build backdoors into their systems will actually make us less safe and less secure," House Judiciary ranking member John Conyers, D-Mich., said.

But when Rep. Ben Quayle, R-Ariz., questioned whether law enforcement is seeking a back-door to the Internet, Caproni said the administration does not want "wiretapping of the Internet. We just want the ability to serve a targeted order on a targeted person on a provider."

Caproni said the FBI would like to see a solution that would get at the bulk of the cases law enforcement investigates and acknowledged that cases involving the use of encryption or other sophisticated means of securing communications will require more technical solutions. "The reality is that ... criminals are sometimes lazy and often resort to what is easy," she said.

But Susan Landau, a fellow at Harvard University's Radcliffe Institute for Advanced Study and a former Sun Microsystems engineer, said any requirement that seeks to build access into a communication system would be vulnerable to hackers who could exploit the same access that the law enforcement is seeking.

She added that a system that would allow bulk access is likely to be exploitable.
"I don't think we can possibly build into various communications infrastructures wiretapping solutions that allow bulk access" that isn't also easy to subvert, Landau said.

Instead, she said the FBI needs to invest more in research into intercepting new technologies as they are being deployed in the marketplace and to share the expertise it does have with local law enforcement officials who may not have the budgets to tackle new technologies on their own.

The FBI announced Thursday that it has executed 40 search warrants throughout the country in connection with a series of coordinated cyber attacks against "major companies and organizations."

The search warrants appeared to be related to the flood of cyber attacks late last year executed against PayPal, Visa and other companies that had stopped doing business with WikiLeaks. The attacks allegedly were executed by a group known as "Anonymous" and were done to protest the companies' decisions to stop doing business with WikiLeaks.

Several U.S. lawmakers called on businesses that had been doing business with WikiLeaks to cut their ties with the anti-secrecy group after it released thousands of secret and classified U.S. documents.

In December, PayPal General Counsel John Muller said his company restricted WikiLeak's "account based on our Acceptable Use Policy review. Ultimately, our difficult decision was based on a belief that the WikiLeaks website was encouraging sources to release classified material, which is likely a violation of law by the source."

The FBI did not specifically say the search warrants were connected to the WikiLeaks attacks. However, the agency said the distributed denial of service attacks, which flood a computer network's ability to function with useless commands and information, were conducted by the group known as "Anonymous," which had claimed responsibility for the attacks in protest of the actions against WikiLeaks.

The FBI said Britain's Metropolitan Police Service "executed additional search warrants and arrested five people for their alleged role in the attacks."

Two men who set up an alleged online scheme to scare more than a million people into buying bogus software have agreed to pay more than $8 million in "ill-gotten gains," the Federal Trade Commission announced Thursday.

The men, a father and son, agreed to pay the money as part of a settlement after federal investigators accused them and five others of creating "scareware" to trick people into thinking their computers were infected.

According to the complaint, the defendants created several companies that "falsely claimed that scans had detected viruses, spyware, and illegal pornography on consumers' computers" then "conned more than one million consumers into buying their software products such as Winfixer, Drive Cleaner and Antivirus XP to remove the malware the bogus scans had supposedly detected."

In the wake of the 2008 investigation, two other people involved in the alleged scam have already settled and the FTC obtained default judgments against three others. Litigation is still pending against one person.

A House Judiciary subcommittee grappled Tuesday with the issue of whether Congress should require Internet service providers and possibly other online firms to retain data for a set time period for possible use by law enforcement, National Journal Daily reported.

Internet service providers are already required by law to preserve data once notified by law enforcement, but they don't have to retain it for a specific amount of time. "Not all ISPs retain this important data, and the length of time such data is retained often varies from one provider to the next," Crime, Terrorism, and Homeland Security Subcommittee Chairman Jim Sensenbrenner, R-Wis., said during a hearing on the issue before his panel. To read more, click here. (Subscription required)