The Darkside of Electronic Commerce

SAN  FRANCISCO,  Aug. 25 -- Recently, a man walked into a smoking
room at San Francisco Airport. He  carried  an  encrypted  CD-ROM
disk  with  approximately 100,000 credit card numbers stolen from
companies doing business on the World Wide Web (WWW). The  secret
code  to decrypt the CD-ROM was based on the first letters of the
sentences in a specific paragraph on a  specific  page  in  Mario
Puzo's  The  Last  Don.  He thought he was going to walk out with
$260,000 in cash for the  CD-ROM.  Instead,  FBI  Special  Agents
placed him under arrest and took him into custody.

Crime  follows  money.  And  many hundreds of millions of dollars
have already flowed into cyberspace. According to  the  Forrester
Group  (Cambridge,  MA),  the  total  value of goods and services
traded between companies over the Internet will reach $8  billion
this  year  and  soar to $327 billion by 2002. But like the brown
bears descending on Yosemite valley camp sites, denizens  of  the
electronic  underground,  lured  by the scent of easy money, have
begun to paw at poorly protected commerce servers.  Consider  the
case of Carlos Salgado, Jr. (aka SMAK).

Today,  Salgado, 37-year-old Daly City man, has pleaded guilty to
four of five counts in  a  federal  indictment  accusing  him  of
hacking systems to gather credit card information for sale on the
black market. Salgado hacked several companies doing business  on
the  WWW,  including  an  Internet Service Provider (ISP) and two
other companies. Exploiting  known  operating  system  flaws  and
utilizing   commonly  available  hacking  tools,  Salgado  gained
unauthorized access to the companies' systems and harvested  tens
of  thousands  of  credit  card  records  from  them.  The arrest
thwarted potential losses of up to  $1  billion  in  credit  card
fraud.

The   details   of  Salgado's  digital  adventures  and  the  FBI
investigation that brought him to justice provide  a  fascinating
and  invaluable  glimpse  into the shadows of cyberspace and shed
light on to the dark side of the electronic commerce gold rush.

For information on how to obtain a copy of the CSI Special Report
on the Salgado Case by CSI Editorial Director Richard Power, call
415-905-2310.

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