LOS ANGELES TIMES: THURSDAY, NOVEMBER 3, 1994
As the global computer network grows so do the rings of thieves who use it to steal software.Frustrated security experts say they may have to resort to bounty hunters.
By: Adam S. Bauman (nickname "reporter") Contact: 1-800-528-4637 extension 73492
In the early hours of July 6, Jenny, head of a software piracy ring based in the Pacific Northwest, paced impatiently in front of a rack of high-speed personal computers, waiting for the phone call that would make her a superstar in the pirate underground.
It would come from an employee of LucasArts Entertainment Co. in San Rafael,who for $300 would supply Jenny's pirate group with one of the most anticipated games of the summer: "TIE Fighter," based on the "Star Wars" movie trilogy and priced at about $60 per copy.
At LucasArts, the employee attached a small cellular modem to the back of his PC - a technique that would keep any record of the call off the company telephone bill - and dialed. Within a few minutes, the program had arrived in Jenny's computer, lacking only the code keys that would make it possible to play the game without an owner's manual.
Jenny then dialed into the Internet, the global computer network, and after taking several deliberate electronic detours she connected with a small computer in Moscow. There, a programming whiz who goes by the name "Skipjack" quickly cracked the codes and sent the program back across the Internet to "Waves of Warez," a Seattle bulletin board popular with software pirates.
Within 24 hours, "TIE Fighter" would be available to thousands of software pirates in major cities around the world - days before its official release date of July 20.
Welcome to the underside of the Internet, where stealing software has become highly sophisticated and hotly competitive - pursued more for thrills than for money. It's a world where pirate groups build alliances, undertake mergers and sometimes launch all-out battles against rivals.
And, contrary to common stereotypes, it is populated not only by nerdy teen-age misfits, but by a curious cross-section of computer enthusiasts looking for some dangerous fun. Jenny, for example, is a woman whose hobbies include motorcycles and collecting rare birds. The head of a big East Coast-based ring is a commercial airline pilot. Another group leader is a junior studying chemical engineering at Carnegie Mellon University in Pittsburgh, Pa. Yet another is a grandmother, leader of an elite group called Nokturnal Trading Alliance.
Their activities are, of course, illegal, potential felonies in many cases. And to most denizens of cyberspace, who use the Internet for scientific research, legimate commerce and legal forms of entertainment, the pirates are common vandals at best.
Still, a number of pirates agreed to allow a reporter to observe their operations - both in person and via computer techniques that make it possible to monitor computer activities remotely - on the condition that their real names not be used.
The economic impact of the pirates' activities is difficult to measure. Electronic software theft via the Internet and other on-line services accounts for about one-third of the $2.2 billion lost in the United States last year as a result of piracy, according to the Business Software Alliance, a trade group. Pirates who mass-produce CD-ROM and floppy disks with stolen software pose a much bigger problem.
But Internet software theft is growing rapidly, along with the global network itself. Even major, mainstream software programs - like the new version of IBM's OS/2 operating system - are now routinely obtainable for free on the Internet.
And the pirates' activities have other consequences as well. They sometimes invade and effectively disable computers being used for scientific research, for example. And many in the information technology industries fear that software theft and other illegal activities are giving the Internet a bad name just when it is gaining unprecedented popularity.
Yet stopping the pirates turns out to be a very difficult task. Law enforcement agencies, software companies and even indignant individuals are stepping up efforts to hunt down electronic lawbreakers, but new methods of stealing and distributing stolen software are developed every day.
By design, the Internet lacks any central administrative authority, and security procedures aimed at thwarting pirates could interfere with the philosophy of free and open communications that is integral to the network. Some suggest the thievery won't be stopped until "bounty hunters" are recruited from the pirates' ranks and paid to hunt their former cohorts.
It may be small comfort to the victims, but most of the pirates interviewed for this story insisted they were not in it for the money.
"It was just for the thrill of getting free software or logging onto pirate bulletin boards that normal people don't know about," said Mike from Seattle, who says he has never earned a dime in his role as a "courier" for a pirate group.
During the interview, conducted in a tidy suburban home that he shares with friends, Mike uploaded a new program - "Lode Runner for Windows" by Sierra Games - to the Internet from his custom-built computer. He then typed e-mail messages to other couriers notifying them of the new game and instructing them to copy it to various pirate sites around the world.
There appear to be about 20 major groups dedicated to software piracy, a length Times investigation has found, with names such as Razor 1911, Tristar Red Sector Inc. (TRSi), Pirates With Attitude (PWA), Revolutionizing International Piracy (RIP), Legend, Malice and Anti Lamers Foundation (ALF). The groups vary in size from 20 to 100 members, and most have a similar hierarchy: group leaders, senior staff, regional coordinators, couriers and members.
The groups divide into two broad types: releasing groups, which arrange for software to be supplied and transferred to local computer bulletin board systems, and courier groups, which have a worldwide network of members who quickly transfer software from local bulletin boards to the Internet for instantaneous worldwide distribution.
Operators generally pay a pirate group a "donation" of $50 to $200 per month to carry that group's software on their bulletin boards. The more successful groups boast as many as several dozen affiliated bulletin boards.
The logistics of coordinating these far-flung networks are daunting, but the pirates are resourceful. One crucial communications method is the Internet Relay Chat (IRC) system, a kind of citizens' band of cyberspace that connects thousands of computer users in 21 countries. A particular series of channels, known as "warez" channels, are used both for conversation between software pirates and the on-line trading of freshly stolen software.
But the IRC has its limits, and even computer hackers sometimes need to talk with each other.
One method they have developed involves a "beige box," or custom-built telephone. The pirate travels a distance from his or her home and taps into the exterior wiring of an apartment building or house to arrange a conference call, possibly involing 20 people or more in several countries, via an AT&T Alliance Teleconferencing opertor.
The pirate controls the conference call from a pay phone. But at the end of the month, the person whose line was tapped receives the bill - which can run well into five figures.
Several leaders of software pirating groups also descrived a method to avoid charges that involves a special compute rprogram, a pay phone and a recordable Hallmark greeting card that contains a small computer memory. The electronic sounds a quarter makes when dropped in a pay phone are recorded on the memory chip, then are played back into the phone in lieu of depositing money.
Despite the seeming case with which many pirates stay one step ahead of law enforcement, there are plenty of risks - especially for those who work in the computer industry.
On Aug. 3, Cupertino-based Symantec Corp., best known for its line of Norton Utility software backup and securityproducts, discovered an employee in its Baton Rouge, La., facility running a pirate site on a company computer. A Symantec source says the company took the unusual step of packing the offending computer inside a chilled and shielded container and flying it to corporate headquarters in Cupertino for laboratory analysis. The employee - who the source said was motivated by "the thrill of being part of the pirate scene" - was fired.
Last month, Dr. William L Sebok, an astronomer at the University of Maryland, announed he had shut down a large pirate site that contained more than 500 megabytes of stolen software - enough to fill half a dozen personal computer hard disks. The site had been running on a laboratory computer used for processing images from the recent collision of Jupiter and the Shoemaker-Levy comet. The illegal use was detected three weeks ago when processing on the computer inexplicably slowed to a crawl.
Maryland officials tried to trace the thieves back through the Internet, but met with little success: Many pirates were found to have used computer accounts belonging to university students in Switzerland, Spain and Slovenia who were unaware their accounts were being used for illicit purposes.
Still, Sebok says the time he spent tracking the pirates was well justified.
"I figured by shutting their site down, I would create a stir for [the pirates] that would be worth it for me. I didn't want to see the cockroaches tunneling through our computer system any more," he said. Law enforcement officials have grown more vigilant about computer crime of all types. A group of special FBI agents now cruises the Internet, and many local and state law enforcement agencies have been training investigators to root out computer crime. But software piracy - especially involving games - takes a back seat to credit card theft and other more destructive crimes.
Dr.G Gene Spafford, an associate professor at Purdue University and a computer security expert, says software manufacturers and trade groups like the Software Publishers Assn. may have to resort to frontier justice to stem the tide of illicit software being transferred over the Internet.
"Some of these same guys who are out pirating right now could very easily turn in the rival groups for a buck or more, and they'll be very willing to do so," Spafford said. He expects to see bounty hunters who get paid based on damages recovered or convictions of software pirating groups.
"We are already seeing private detective agencies investigating computer break-ins, because the local law enforcement agencies arn't equipped," he added.
Robert Roden, general counsel at LucasArts, said the growth of the Internet has made it much easier for people to steal and distribute games around the world. Usually a company sends out cease and desist letters to pirates if it can find them, but that has become harder, Roden said.
"If they're stealing 'TIE Fighter' because they love the game, the irony in all of it is that they're harming the thing they love," Rodden added. "They're making it more difficult for software companies to make these products and survive in the market."
But the pirates arn't much impressed with that argument. On July 14, a 20-year-old pirate nicknamed Drizzt took a morning drive from his home in the San Fernando Valley to Babbage's computer retail store at the Glendale Galleria. He wanted to check if LucasArts' "TIE Fighter" game had come yet.
Glancing inside, Drizzt could see the game had not arrived. On a shelf near the front of the store stood empty "TIE Fighter" boxes, gaily decorated with ribbons that said "coming soon." Drizzt recalls laughing at the sight of those empty boxes. "The funny thing was," he later told a reporter, "I'd been playing that game for the last seven days. I'd downloaded it off the Internet, I didn't have to pay for it, I was up to the sixth mission and it worked great."