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British teenager Ryan Cleary is released on bail following charges of hacking into a law enforcement agency’s website.

The group claiming to be behind attacks on Sony and CIA are anxious over anonymity but thrive on publicity as leaked chatroom logs show.

Leaked discussions between members of the internet hacking group LulzSec, seen and published by The Guardian, provide the first insight into the team behind a series of audacious online attacks.

LulzSec claims to have been behind attacks in recent weeks on websites around the world, including the UK’s Serious Organised Crime Agency (Soca), the US Senate and the CIA, as well as the games firms Nintendo and Sony.

Some of the imagery used by LulzSec online.Some of the imagery used by LulzSec online.

Leaked logs from LulzSec’s private chatroom reveal how one hacker known as “Sabu“, believed to be a 30-year-old security consultant, in effect controls the group of between six and eight people, keeping the others in line and warning them not to discuss their exploits.

Another, “Kayla“, provides a large botnet – a network of infected computers controlled remotely – to target websites with distributed denial of service (DDoS) attacks, which make those sites work inefficiently or not at all.

A third member, “Topiary“, manages the public image, including the LulzSec Twitter feed.

Bailed ... Ryan ClearyAccused … Ryan Cleary. Photo: AFP

The logs reveal that the members are obsessed with their coverage in the media, especially in physical newspapers, sharing pictures of coverage they have received in the Wall Street Journal and other papers. They also engineered a misinformation campaign to make people think they were a US-government-sponsored team.

Members express their enmity towards a rival called the Jester – an ex-US military hacker who usually attacks jihadist sites, but has become embroiled in a dispute with WikiLeaks, LulzSec and the notorious hacker group Anonymous over the leaked diplomatic cables and, more recently, LulzSec’s attacks on US government websites, including those of the CIA and Senate.

A lone-wolf hacker, originally thought to be the Jester, temporarily crippled LulzSec’s website at the weekend. Another activist known as Oneiroi later claimed responsibility for the attack but did not give an explanation.

Scary Crimes Uncovered by FBI

in Operation Smoking Dragon

May. 10 2011 – 9:24 am 
The Seal of the United States Federal Bureau o...Operation Smoking Dragon: The FBI gets the job done under the most difficult of circumstances.

From Bill Singer: I pride myself on staying on top of current events.  Everyday I scour the headlines and numerous websites for stories to report on.  If you’ve been following Street Sweeper, you know that I cast a very wide net — from serious to zany.  At times, my commentary is biting and intense.  I have never been one to suffer fools; particularly when they are in government, regulation, or law enforcement.

On the other hand, I detest hypocrisy.  When I take folks and institutions to task, which I frequently do, that imposes an obligation upon me to compliment those targets of my ire when their performance excels.  Now, I proudly stand up and applaud a job well done.

Disneyland – Fantasmic – New Fire Breathing Dragon

This morning, I read about a recent development in the Federal Bureau of Investigation’s “Operation Smoking Dragon,” in which assistance was provided by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the U.S. Immigration and Customs Enforcement; and the United States Secret Service.  On May 9, 2011, criminal defendant Yi Qing Chen, 49, of Rosemead, California, received a 300-month sentence following his conviction for a number of crimes, including an attempt to smuggle into the United States surface-to-air missiles.

If you don’t mind, let me repeat that: an attempt to smuggle into the United States surface-to-air missiles.

Despite federal budget constraints, a growing demand for the FBI’s services, and reports of low morale among many Special Agents (fueled by a ballooning caseload), the FBI is to be complimented for detecting Chen’s crimes — and the Department of Justice earns similar praise for its successful prosecution.

Notwithstanding my best efforts to write about this case, nothing that I rendered came close to the eye-opening, quite frightening prose that was presented in the FBI’s official Press Release.  I commend the verbatim release below to your consideration:

Department of Justice Press Release

For Immediate Release
May 9, 2011
United States Attorney’s Office
Central District of California
Contact:             (213) 894-2434

Southern California Man Sentenced to 25 Years in Prison for Convictions in Smuggling Schemes, Including Plot to Bring Surface-to-Air Missiles Into United States

LOS ANGELES—A Southern California man was sentenced this morning to 25 years in federal prison after being convicted on a series of federal charges related to schemes to smuggle many items into the United States, including surface-to-air missiles designed to shoot down aircraft.

Yi Qing Chen, 49, of Rosemead, California, received the 300-month sentence from United States District Judge Dale S. Fischer.

Last October, following a two-week trial, a federal jury convicted Chen of five felony counts—conspiracy to distribute methamphetamine and cocaine, distribution of cocaine, trafficking in counterfeit cigarettes (approximately 800,000 cases of cigarettes), trafficking in contraband cigarettes, and conspiracy to import missile systems designed to destroy aircraft.

During this morning’s hearing, Judge Fischer said Chen “never saw a criminal scheme he didn’t want a part of.”

The evidence presented during the trial showed that Chen conspired to smuggle, among other things, Chinese-made QW-2 shoulder-fired missiles into the United States. The guilty verdict in the missile plot was the nation’s first conviction at trial under an anti-terrorism statute that outlaws the importation of missile systems designed to destroy aircraft. Enacted in December 2004, the statute carries a mandatory minimum penalty of 25 years in federal prison.

“Mr. Chen was the first person in the nation to be indicted for plotting to smuggle anti-aircraft missiles into the United States after the 9/11 attacks,” said United States Attorney André Birotte Jr. “The 25-year sentence imposed today appropriately reflects the severity of the threat this conspiracy posed to the security of the United States.”

The case against Chen is the result of Operation Smoking Dragon, an FBI-led undercover investigation into smuggling operations in Southern California. Smoking Dragon and a related investigation in New Jersey led to the indictment of 87 individuals on charges related to international conspiracies to smuggle counterfeit United States currency, drugs and other contraband into the United States. Operation Smoking Dragon resulted in four indictments and nearly three dozen convictions in Los Angeles. Chen is the final defendant to be sentenced in relation to Operation Smoking Dragon.

“Today’s sentencing of Mr. Chen is the result of eight years of investigative work by agents and prosecutors assigned to the Smoking Dragon case,” said Steven Martinez, Assistant Director in Charge of the FBI in Los Angeles. “The defendant’s willingness to smuggle surface-to-air missiles into this country or anywhere is a frightening concept because there can be no confusion as to the purpose of such contraband—nor to the potentially horrific consequences for innocent people.”

In 2006, a man who conspired with Chen pleaded guilty in relation to various smuggling plots, including the scheme to bring the surface-to-air missiles into the United States (see: That co-defendant, Chao Tung Wu, died while pending sentencing and before Chen was brought to trial.

The evidence in the case showed that Chen and Wu met with an undercover FBI agent and agreed to arrange the importation of shoulder-fired QW-2 missiles, as well as launch and operation hardware for the missiles, from the People’s Republic of China. The missiles were never delivered because Wu and Chen were arrested in 2005 before the deal was concluded.

“Recordings played during trial, of defendant [Chen] and Wu, included discussions that they had engaged in a wide range of criminal activity, including narcotics and counterfeit cigarette trafficking and shipping vehicles to China in containers where documents fraudulently identified their contents,” prosecutors wrote in papers filed in court prior to today’s sentencing. “It was undisputed that Wu never conducted any legitimate business during the relevant period of time.”

In addition to the 25-year prison term, Judge Fischer ordered Chen to pay $520,000 to Philip Morris for the counterfeit cigarettes he smuggled into the United States.

Operation Smoking Dragon was an investigation run by the Federal Bureau of Investigation, which received substantial assistance from the Bureau of Alcohol, Tobacco, Firearms, and Explosives and U.S. Immigration and Customs Enforcement. The United States Secret Service assisted in the investigation in relation to the smuggling of counterfeit $100 bills called “Supernotes” that are believed to have been manufactured in North Korea.

Assistant United States Attorney Mark Aveis
National Security Section
(213) 894-4477

Assistant United States Attorney Bonnie L. Hobbs
National Security Section
(213) 894-4447

June 7, 2011 7:06 AM PDT


25 percent of U.S. hackers

are FBI informants

by Don Reisinger

The FBI has a legion of reformed hackers working to stop cybercriminals, a new report claims.

According to the Guardian, 25 percent of all the hackers in the U.S. are actually informants for the federal government. The reason for that, the U.K. publication reports, citing Eric Corley, the publisher of hacker quarterly 2600, is that hackers have become quite easy to break when they’re faced with threats of long prison sentences for their alleged crimes. In fact, Corley told the Guardian that hackers “are rather susceptible to intimidation.” So rather than face those long stretches in jail, they secretly provide information to the authorities.

That revelation comes at a time when hacking has become an increasingly worrisome issue for companies and individuals around the world. In April, Sony’s PlayStation Network, Qriocity, and Online Entertainment services were breached, exposing the personal information of over 100 million customers, and hacker trouble continues to dog Sony. Famed hacking group Anonymous focused its efforts on Iran recently by exposing the e-mails of government officials. Google was forced to announce last week that the personal Gmail accounts of top U.S. government officials were targeted in a phishing attack.

All that action has made targeting–and turning–hackers an increasingly important goal of law enforcement. In fact, the Guardian is reporting that many turncoats are operating “marketplaces” where hackers typically exchange stolen personal information.

To bolster its efforts, the FBI also takes over forums and other hacker hangouts to catch cybercriminals, the Guardian is reporting.

The FBI was not immediately available for comment on the Guardian report.

The idea of hackers changing sides is nothing new. Kevin Mitnick, one of the best-known hackers, was arrested in 1995 on wire and computer fraud charges related to his hacking activities. After being released from prison in 2002, he became a security consultant, helping to fight those that were engaging the same activities he did.

Speaking with CNET in 2009, Mitnick offered a word of caution to today’s hackers, saying that they should use their abilities to do good.

“Don’t follow in my footsteps,” Mitnick told budding hackers in the CNET interview. “There are definitely other roads or other opportunities and ways that people can learn and educate themselves about hacking, security, and pen testing. Today it’s a huge market. It’s become a huge issue within the federal government with critical infrastructure.

“Don’t break the law,” he continued. “Don’t intrude on other peoples’ property. It’s just the wrong thing to do. It’s unethical and immoral.”

Internet monitor ICANN (Internet Corporation for Assigned Names and Numbers) has appointed as chief security officer the founder of the Defcon hacker conference and advisor to the United States Department of Homeland Security, Jeff Moss.

Jeff Moss has an illustrious past and is well-connected in hacker communities, and well-respected by officials in the US government and security industry. He has been running Defcon for nearly 18 years, since the days when he was better known, at least online, as “Dark Tangent”. He also runs the Black Hat briefings security conferences held around the world and was appointed to the DHS Advisory Council two years ago.

Previously, he was a director at Secure Computing and worked at Ernst & Young. He received a bachelor’s degree in criminal justice from Gonzaga University and also serves on the Council on Foreign Relations.

“I can think of no one with a greater understanding of the security threats facing internet users and how best to defend against them than Jeff Moss,” ICANN president Rod Beckstrom said.

“He has the in depth insider’s knowledge that can only come from fighting in the trenches of the ongoing war against cyber threats.”

Paul Vixie, chairman and chief scientist at the Internet Systems Consortium, said that Moss has been in the information security community “since the dawn of time, and not only knows where the weak spots are, but also how they got that way” and what to do about them.

Moss will begin working out of ICANN’s Washington offices on Friday, the organisation said in a statement today.

FBI probes of some

cyber attacks face troubles

WASHINGTON | Wed Apr 27, 2011 1:31pm EDT

(Reuters) – FBI agents have had trouble investigating cyber attacks involving national security because they lack the needed technical expertise or are often transferred or diverted to other cases, according to a government report released on Wednesday.

Sensitive government computer networks are under regular attack from hackers seeking to steal classified material or to cripple critical operations. About 19 percent of the FBI’s cyber agents focus on national security cases.

Some cyber agents complained they did not have the proper experience to investigate such cases, were assigned to other matters or were rotated between offices too often, according to a report by the Justice Department’s inspector general.

“Because national security intrusion cases are highly technical and require a specific set of skills, new cyber agents are often not equipped to assume responsibility of a national security intrusion investigation,” the report said.

Further, field agents do not have enough tactical analytical support for those cases, “hampering their ability to connect the dots in an investigation and to determine those responsible for intrusions,” it said.

The FBI in 2007 issued a plan for agents to become experts for cyber security investigations with 12 core courses and expected them to complete it along with on-the-job training in five to seven years. The number of agents who have completed the coursework was not made public in the report.

The inspector general’s office tested 36 cyber agents it interviewed to see if they had the technical skills for national security cases and found that 64 percent did.

Five of the 36 field agents interviewed said that they did not think they were able to effectively investigate national security intrusions and were not qualified to do so, according to the inspector general’s report.

The FBI told the inspector general that it was looking into the concerns about transfers and that the cyber division has also begun realigning its career path program to ensure “field offices had qualified agents to investigate national security intrusion matters,” the report said.

The inspector general also recommended that the FBI create regional hubs with cyber agents who can deal with the national security cases, an idea the agency said it was considering.

(Reporting by Jeremy Pelofsky, editing by Jackie Frank)

Ombudsman to probe billions

of dollars thrown at IT projects

David Rood

April 18, 2011

VICTORIA’S [Australia] chief corruption and integrity watchdogs have launched a joint investigation into a string of failed state information technology projects, including myki and the police crime database, currently costing taxpayers billions of dollars.

Ombudsman George Brouwer has used his powers to launch his own inquiry into the handling of the projects following serial cost blowouts and mismanagement of technology programs under the former Labor government.

The Age has learnt the investigation was triggered by the disappointment felt by both the Ombudsman and Auditor-General Des Pearson that major information technology projects continued to run over budget and have not delivered on their goals, although the two bodies have consistently warned about the problems. 

Insiders have told The Age that the Ombudsman and Auditor-General are also frustrated by a lack of accountability for project failures and cost over-runs.

There is also concern about the ability of the public service to manage multimillion-dollar projects and learn from their mistakes.

A Victorian Treasury report, released last week, listed myki, the HealthSmart hospital computer system and the new police crime database as key factors in a predicted $2 billion hit to the state budget.

With the government still to decide on the fate of the trouble-plagued myki ticket system, the cost of the project has already blown out by $350 million, with a current price tag of $1.35 billion to create and run the system. Some estimates put the final cost at $1.5 billion for myki. State Treasury has put the cost overrun of the new HealthSmart system at at least $80 million, which would bring the total project cost to approximately $430 million.

The original 2005 budget for the new LINK police database to log, track and analyse crime was $61 million. The project was due to be completed by 2010 but was suspended in March last year, with a reported new cost of approximately $85 million.

Last week, The Age revealed that the child protection information technology system was threatening the care of vulnerable children and putting case workers at risk.

Premier Ted Baillieu said the projects had been left in a shambles, with massive cost blowouts that had contributed to a $2 billion budget black hole.

“This will be an important investigation which will assist the government in identifying how these massive losses and mismanagement occurred, and how we can ensure they are not repeated,” he said.

Opposition spokesman for finance Tim Holding said Mr Baillieu had inherited a triple-A credit-rated budget and his government had invented so-called black holes in a dishonest attempt to justify slashing jobs and breaking promises.

”Last week’s discredited economic statement failed to contain any costings or almost 90 per cent of Treasurer Kim Wells’s so-called black holes,” Mr Holding said.

Since 2005, the Ombudsman and Auditor-General have investigated more than 10 IT systems or projects including the LEAP police data base, Victorian crime statistics, the child protection IT system, HealthSmart and myki.

Yemeni ‘thugs’ kill 30 protesters

yemeni thugs

Anti-government protestors react as they gather at a field hospital to check on friends and relatives during clashes with security forces in Yemen. Picture: AP Source: The Australian

MORE than 30 anti-regime protesters were shot dead and over 100 wounded last night during a demonstration in the Yemeni capital.

Pro-regime “thugs” opened fire from houses close to the square at Sanaa University on protesters calling for the ousting of President Ali Abdullah Saleh, witnesses said.

Medics said more than 30 were killed and more than 100 wounded. “Most of the wounds were to the head, neck and chest,” one medic said.

Thousands have camped out in the square since February 21 demanding the departure of Mr Saleh, who has been in power since 1978.

Yesterday’s bloodbath came after five Yemeni protesters were wounded in an attack on Wednesday night by masked men on the Sanaa University sit-in.

Anti-government activists said that the attackers, wielding guns, clubs and daggers, were thugs loyal to the regime.

On Sunday, witnesses said, dozens were injured when police and loyalists of the ruling General People’s Congress party attacked protesters in the square with live rounds and tear gas .

On Thursday, security forces and government loyalists struck protest camps across Yemen, hurling rocks, beating protesters with sticks and firing rubber and live bullets, hoping to break the will of thousands camped in squares for more than a month.

The violence underscored the attrition tactic of Mr Saleh, who does not appear to have the will – or perhaps the capabilities – to disperse the demonstrators conclusively.

In the past few weeks, he has unleashed fiery assaults on protesters in different cities using a mix of security forces and paid thugs, apparently hoping to wear them out.

It is just one of the problems this extremely poor, tribal country faces. Even before protests began in the middle of last month, Yemen’s government was struggling to confront one of the world’s most active al-Qa’ida branches, a secessionist rebellion in the south and a Shia uprising in the north.

Mr Saleh is a key ally in the US campaign against the al-Qa’ida terror network. On Thursday, al-Qa’ida militants ambushed police as they ate lunch at a checkpoint. In a gunfight, three militants and three police were killed, said a security official in Marib province.

In the southern province of Taiz, police hurled canisters of choking gas to break up a rally of several thousand. Government loyalists joined in, attacking protesters with iron rods, sticks and knives, witnesses said.

“Thugs – security forces in plain clothes – attacked us,” said demonstrator Bushra al-Maqtari.

Several hours later, police and paid thugs rushed at the demonstrators again, adding rubber bullets and live fire to violently disperse the crowd. Medics said about 80 protesters were injured, at least four with gunshot wounds.

Over the past month, security forces have killed 78 demonstrators, according to a Yemeni rights group. Most of those were in the port-side province of Aden.

Sourced & published by Henry Sapiecha


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