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GUIDE TO (mostly) HARMLESS HACKING

Computer Crime Law Issue #1

By Peter Thiruselvam <pselvam@ix.netcom.com> and Carolyn Meinel
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Tired of reading all those “You could go to jail” notes in these guides? Who
says those things are crimes? Well, now you can get the first in a series of
Guides to the gory details of exactly what laws we’re trying to keep you
from accidentally breaking, and who will bust you if you go ahead with the
crime anyhow.

This Guide covers the two most important US Federal computer crime statutes:
18 USC, Chapter 47, Section 1029, and Section 1030, known as the “Computer
Fraud and Abuse Act of 1986.”

Now these are not the *only* computer crime laws.  It’s just that these are
the two most important laws used in US Federal Courts to put computer
criminals behind bars.  

COMPUTER CRIMES: HOW COMMON? HOW OFTEN ARE THEY REPORTED?

The FBI’s national Computer Crimes Squad estimates that between 85 and 97
percent of computer intrusions are not even detected.  In a recent test
sponsored by the Department of Defense, the statistics were startling.
Attempts were made to attack a total of 8932 systems participating in the
test. 7860 of those systems were successfully penetrated.  The management of
only 390 of those 7860 systems detected the attacks, and only 19 of the
managers reported the attacks (Richard Power, -Current and Future Danger: A
CSI Primer on Computer Crime and Information Warfare_, Computer Security
Institute, 1995.) 

The reason so few attacks were reported was “mainly because organizations
frequently fear their employees, clients, and stockholders will lose faith
in them if they admit that their computers have been attacked.” Besides, of
the computer crimes that *are* reported, few are ever solved. 
 
SO, ARE HACKERS A BIG CAUSE OF COMPUTER DISASTERS?

According to the Computer Security Institute, these are the types of
computer crime and other losses:    
· Human errors - 55%  
· Physical security problems - 20%(e.g., natural disasters, power problems)
· Insider attacks conducted for the purpose of profiting from computer crime
- 10%
· Disgruntled employees seeking revenge - 9%
· Viruses - 4% 
· Outsider attacks - 1-3%

So when you consider that many of the outsider attacks come from
professional computer criminals -- many of whom are employees of the
competitors of the victims, hackers are responsible for almost no damage at
all to computers. 

In fact, on the average, it has been our experience that hackers do far more
good than harm.

Yes, we are saying that the recreational hacker who just likes to play
around with other people’s computers is not the guy to be afraid of. It’s
far more likely to be some guy in a suit who is an employee of his victim.
But you would never know it from the media, would you?

OVERVIEW OF US FEDERAL LAWS

In general, a computer crime breaks federal laws when it falls into one of
these categories:

· It involves the theft or compromise of national defense, foreign
relations, atomic energy, or other restricted information.
· It involves a computer owned by a U.S. government department or agency.
· It involves a bank or most other types of financial institutions.
· It involves interstate or foreign communications.
· it involves people or computers in other states or countries.

Of these offenses, the FBI ordinarily has jurisdiction over cases involving
national security, terrorism, banking, and organized crime.  The U.S. Secret
Service has jurisdiction whenever the Treasury Department is victimized or
whenever computers are attacked that are not under FBI or U.S. Secret
Service jurisdiction (e.g., in cases of password or access code theft).  In
certain federal cases, the customs Department, the Commerce Department, or a
military organization, such as the Air Force Office of Investigations, may
have jurisdiction.

In the United States, a number of federal laws protect against attacks on
computers, misuse of passwords, electronic invasions of privacy, and other
transgressions.  The Computer Fraud and Abuse Act of 1986 is the main piece
of legislation that governs most  common computer crimes, although many
other laws may be used to prosecute different types of computer crime. The
act amended Title 18 United States Code §1030. It also complemented the
Electronic Communications Privacy Act of 1986, which outlawed the
unauthorized interception of digital communications and had just recently
been passed. The Computer Abuse Amendments Act of 1994 expanded the 1986 Act
to address the transmission of viruses and other harmful code.

In addition to federal laws, most of the states have adopted their own
computer crime laws.  A number of countries outside the United States have
also passed legislation defining and prohibiting computer crime.

THE BIG NO NO’S -- THE TWO MOST IMPORTANT FEDERAL CRIME LAWS

As mentioned above, the two most important US federal computer crime laws
are 18 USC: Chapter 47, Sections 1029 and 1030.
     
SECTION 1029

Section 1029 prohibits fraud and related activity that is made possible by
counterfeit access devices such as PINs, credit cards, account numbers, and
various types of electronic identifiers.  The nine areas of criminal
activity covered by Section 1029 are listed below.  All *require* that the
offense involved interstate or foreign commerce.

1.  Producing, using, or trafficking in counterfeit access devices.  (The
offense must be committed knowingly and with intent to defraud.)

Penalty:  Fine of $50,000 or twice the value of the crime and/or up to 15
years in prison, $100,000 and/or up to 20 years if repeat offense.

2.  Using or obtaining unauthorized access devices to obtain anything of
value totaling $1000 or more during a one-year period.  (The offense must be
committed knowingly and with intent to defraud.)

Penalty:  Fine of $10,000 or twice the value of the crime and/or up to 10
years in prison, $100,000 and/or up to 20 years if repeat offense.

3.  Possessing 15 or more counterfeit or unauthorized access devices. (The
offense must be committed knowingly and with intent to defraud.)

Penalty:  Fine of $10,000 or twice the value of the crime and/or up to 10
years in prison, $100,000 and/or up to 20 years if repeat offense.

4.  Producing, trafficking in, or having device-making equipment.  (The
offense must be committed knowingly and with intent to defraud.)

Penalty:  Fine of $50,000 or twice the  value of the of the crime and/or up
to 15 years in prison, $1,000,000 and/or up to 20 years if repeat offense.

5.  Effecting transactions with access devices issued to another person in
order to receive payment or anything of value totaling $1000 or more during
a one-year period.  (The offense must be committed knowingly and with intent
to defraud.)

Penalty:   Fine of 10, or twice the value of the crime and/or up to 10 years
in prison, 100,000 and/or up to 20 years if repeat offense.

6.  Soliciting a person for the purpose of offering an access device or
selling information that can be used to obtain an access device.  (The
offense must be committed knowingly and with intent to defraud, and without
the authorization of the issuer of the access device.)

Penalty:  Fine of $50,000 or twice the value of the crime and/or up to 15
years in prison, $100,000 and/or up to 20 years if repeat offense.

7.  Using, producing, trafficking in, or having a  telecommunications
instruments that has been modified or altered to obtain unauthorized use of
telecommunications services. (The offense must be committed knowingly and
with intent to defraud.)

This would cover use of “Red Boxes,” “Blue Boxes” (yes, they still work on
some telephone networks) and cloned cell phones when the legitimate owner of
the phone you have cloned has not agreed to it being cloned. 

Penalty:  Fine of $50,000 or twice the value of the crime and/or up to 15
years in prison, $100,000 and/or up to 20 years if repeat offense.

8.  Using, producing, trafficking in, or having a scanning receiver or
hardware or software used to alter or modify telecommunications instruments
to obtain unauthorized access to telecommunications services.

This outlaws the scanners that people so commonly use to snoop on cell phone
calls. We just had a big scandal when the news media got a hold of an
intercepted cell phone call from Speaker of the US House of Representatives
Newt Gingrich.

Penalty:  Fine of $50,000 or twice the value of the crime and/or up to 15
years in prison, $100,000 and/or  up to 20 years if repeat offense.

9.  Causing or arranging for a person to present, to a credit card system
member or its agent for payment, records of transactions made by an access
device.(The offense must be committed knowingly and with intent to defraud,
and without the authorization of the credit card system member or its agent.

Penalty: Fine of $10,000 or twice the value of the crime and/or up to 10
years in prison, $100,000 and/or up to 20 years if repeat offense.

SECTION 1030

18 USC, Chapter 47, Section 1030, enacted as part of the Computer Fraud and
Abuse Act of 1986, prohibits unauthorized or fraudulent access to government
computers, and establishes penalties for such access.  This act is one of
the few pieces of federal legislation solely concerned with computers.
Under the Computer Fraud and Abuse Act, the U.S. Secret Service and the FBI
explicitly have been given jurisdiction to investigate the offenses defined
under this act.

The six areas of criminal activity covered by Section 1030 are:

1.  Acquiring national defense, foreign relations, or restricted atomic
energy information with the intent or reason to believe that the information
can be used to injure the United States or to the advantage of any foreign
nation.  (The offense must be committed knowingly by accessing a computer
without authorization or exceeding authorized access.)

2.  Obtaining information in a financial record of a financial institution
or a card issuer, or information on a consumer in a file of a consumer
reporting agency.  (The offense  must be committed intentionally by
accessing a computer without authorization or exceeding authorized access.)

Important note: recently on the dc-stuff hackers’ list a fellow whose name
we shall not repeat claimed to have “hacked TRW” to get a report on someone
which he posted to the list. We hope this fellow was lying and simply paid
the fee to purchase the report.

Penalty:  Fine and/or up to 1 year in prison, up to 10 years if repeat offense.

3.  Affecting a computer exclusively for the use of a U.S. government
department or agency or, if it is not exclusive, one used for the government
where the offense adversely affects the use of the government’s operation of
the computer.  (The offense must be committed intentionally by accessing a
computer without authorization.)

This could apply to syn flood and killer ping as well as other denial of
service attacks, as well as breaking into a computer and messing around.
Please remember to tiptoe around computers with .mil or .gov domain names!

Penalty:  Fine and/or up to 1 year in prison, up to 10 years if repeat offense.

4.  Furthering a fraud by accessing a federal interest computer and
obtaining anything of value, unless the fraud and the thing obtained
consists only of the use of the computer.  (The offense must be committed
knowingly, with intent to defraud, and without authorization or exceeding
authorization.)[The government’s view of  “federal interest computer” is
defined below]

Watch out! Even if you download copies of programs just to study them, this
law means if the owner of the program says, “Yeah, I’d say it’s worth a
million dollars,” you’re in deep trouble.

Penalty:  Fine and/or up to 5 years in prison, up to 10 years if repeat offense.

5.  Through use of a  computer used in interstate commerce, knowingly
causing the transmission of a program, information, code, or command to a
computer system. There are two separate scenarios:

     a.  In this scenario, (I) the person causing the transmission intends
it to damage the computer or deny use to it; and (ii) the transmission
occurs without the authorization of the computer owners or operators, and
causes $1000 or more in loss or damage, or modifies or impairs, or
potentially modifies or impairs, a medical treatment or examination.

The most common way someone gets into trouble with this part of the law is
when trying to cover tracks after breaking into a computer. While editing
or, worse yet, erasing various files, the intruder may accidentally erase
something important. Or some command he or she gives may accidentally mess
things up. Yeah, just try to prove it was an accident. Just ask any systems
administrator about giving commands as root. Even when you know a computer
like the back of your hand it is too easy to mess up.

A simple email bomb attack, “killer ping,” flood ping, syn flood, and those
huge numbers of Windows NT exploits where sending simple commands to many of
its ports causes a crash could also break this law. So even if you are a
newbie hacker, some of the simplest exploits can land you in deep crap!

Penalty with intent to harm:  Fine and/or up to 5 years in prison, up to 10
years if repeat offense.

b.  In this scenario, (I) the person causing the transmission does not
intend the damage but operates with reckless disregard of the risk that the
transmission will cause damage to the computer  owners or operators, and
causes $1000 or more in loss or damage, or modifies or impairs, or
potentially modifies or impairs, a medical treatment or examination.

This means that even if you can prove you harmed the computer by accident,
you still may go to prison.

Penalty for acting with reckless disregard:  Fine and/or up to 1 year in prison.

6.  Furthering a fraud by trafficking in passwords or similar information
which will allow a computer to be accessed without authorization, if the
trafficking affects interstate or foreign commerce or if the computer
affected is used by or for the government.  (The offense must be committed
knowingly and with intent to defraud.)

A common way to break this part of the law comes from the desire to boast.
When one hacker finds a way to slip into another person’s computer, it can
be really tempting to give out a password to someone else. Pretty soon
dozens of clueless newbies are carelessly messing around the victim
computer. They also boast. Before you know it you are in deep crud.

Penalty:  Fine and/or up to 1 year in prison, up to 10 years if repeat offense.

Re:  #4   Section 1030 defines a federal interest computer as follows:

1.  A computer that is exclusively for use of a financial
institution[defined below] or the U.S. government or, if it is not
exclusive, one used for a financial institution or the U.S. government where
the offense adversely affects the use of the financial institution’s or
government’s operation of the computer; or 

2.  A computer that is one of two or more computers used to commit the
offense, not all of which are located in the same state.

This section defines a financial institution as follows:

1.  An institution with deposits insured by the Federal Deposit Insurance
Corporation(FDIC).

2.  The Federal Reserve or a member of the Federal Reserve, including any
Federal Reserve Bank.

3.  A credit union with accounts insured by the National Credit Union
Administration.

4.  A member of the federal home loan bank system and any home loan bank.

5.  Any institution of the Farm Credit system under the Farm Credit Act of 1971.

6.  A broker-dealer registered with the Securities and Exchange
Commission(SEC) within the rules of section 15 of the SEC Act of 1934.

7.  The Securities Investors Protection Corporation.

8.  A branch or agency of a foreign bank (as defined in the International
Banking Act of 1978).

9.  An organization operating under section 25 or 25(a) of the Federal
Reserve Act.

WHO’S IN CHARGE OF BUSTING THE CRACKER WHO GETS A BIT FROGGY REGARDING
SECTION 1030?

(FBI stands for Federal Bureau of Investigation, USSS for US Secret Service)

Section of Law	Type of Information	Jurisdiction

1030(a)(1)     National Security	     FBI  USSS JOINT

			National defense         X
1030(a)(2)	Foreign relations	     X
			Restricted atomic energy	X

1030(a)(2)	Financial or consumer
			
			Financial records of 	X
			  banks, other financial 
			  institutions
			Financial records of 
			  card issuers			      X
			Information on consumers 
			  in files of a consumer 
			  reporting agency			 X
			Non-bank financial 
			  institutions					 X

1030(a)(3) Government computers
			National defense         X
		     Foreign relations		X
			Restricted data			X
			White House					 X
			All other government 
			  computers			     X

1030(a)(4) Federal interest computers:
       		Intent to defraud		 		 X

1030(a)(5)(A) Transmission of programs, commands:	
			Intent to damage or deny use		 X

1030(a)(5)(B) Transmission off programs, commands:					Reckless disregard				 X

1030 (a)(6) Trafficking in passwords:					
			Interstate or foreign commerce	 X
               Computers used by or for 
			  the government				 X


Regarding 1030 (a)(2):  The FBI has jurisdiction over bank fraud violations,
which include categories (1) through (5) in the list of financial
institutions defined above.  The Secret Service and FBI share joint
jurisdiction over non-bank financial institutions defined in categories (6)
and (7) in the list of financial institutions defined above.

Regarding 1030(a)(3)  Government Computers:  The FBI is the primary
investigative agency for violations of this section when it involves
national defense. Information pertaining to foreign relations, and other
restricted data.  Unauthorized access to other information in government
computers falls under the primary jurisdiction of the Secret Service.

MORAL:  CONFUCIUS SAY:  “CRACKER WHO GETS BUSTED DOING ONE OF THESE CRIMES,
WILL SPEND LONG TIME IN JAILHOUSE SOUP.”

This  information was swiped from _Computer Crime: A Crimefighter’s
Handbook_ (Icove, Seger & VonStorch. O’Reilly & Associates, Inc.)
_________________________________________________________
Want to see back issues of Guide to (mostly) Harmless Hacking? See either
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Want to share some kewl stuph with the Happy Hacker list? Correct mistakes?
Send your messages to hacker@techbroker.com.  To send me confidential email
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and be sure to state in your message that you want me to keep this
confidential. If you wish your message posted anonymously, please say so!
Please direct flames to dev/null@techbroker.com. Happy hacking! 
Copyright 1997 Carolyn P. Meinel. You may forward  or post on your Web site
this GUIDE TO (mostly) HARMLESS HACKING as long as you leave this notice at
the end..
________________________________________________________
Carolyn Meinel
M/B Research -- The Technology Brokers

