Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Fri, 03 Oct 2003 12:38:18 +1200
From: Hugh Lilly <h.lilly@xxxxxxx>
Subject: Fwd: Mystery shrouds arrest of accused software pirate
To: Dave Farber <dave@xxxxxxxxxx>
---------- Forwarded Message: ----------
Subject: Mystery shrouds arrest of accused software pirate
Date: Thu, 02 Oct 2003 15:04
From: "cybercrime-alerts" <alerts@xxxxxxxxxxx>
To: cybercrime-alerts@xxxxxxxxxxxxx
** via http://techPolice.com
-
Mystery shrouds arrest of accused software pirate
By Mike Brunker, MSNBC
U.S. authorities are trying to reel in a rare fish -- an alleged software
pirate from the former Soviet Union who may be one of the biggest catches so
far in the war on cybercrime. But instead of trumpeting the arrest of Maksym
Kovalchuk, investigators and prosecutors have cast a net of secrecy around
the case and their efforts to extradite the 25-year-old Ukrainian from
Thailand.
THOUGH KOVALCHUK WAS described as a "kingpin" of international computer crime
at the time of his arrest, many details of the case against him remain
unclear more than four months after he was apprehended by Thai authorities
as he was downloading a frozen treat in a Bangkok ice cream parlor.
Kovalchuk's arrest on an international warrant obtained by U.S. authorities
was the result of a criminal complaint filed in Northern California. But
that complaint remains sealed, and officials with the U.S. Secret Service
and the U.S. Attorney's Office in San Jose declined to discuss the case in
response to interview requests from MSNBC.com.
One reason for the low-key approach is that U.S. authorities apparently hope
to use Kovalchuk's arrest to further penetrate the shadowy world of software
piracy in the Ukraine -- a global hot spot for intellectual property theft,
much of it orchestrated by organized crime syndicates.
'OTHER SUSPECTS' SOUGHT
"His extradition is still pending, and there are other suspects in the case,
so we really can't say anything at this point," said a U.S. Secret Service
spokeswoman.
A Thai court may rule as early as Wednesday on a U.S. extradition request for
Kovalchuk. If it turns him over, Kovalchuk apparently would be the first
person from the Ukraine -- and possibly any of the former Soviet Union
countries -- to stand trial in the United States on software piracy charges.
Most of what is known about the case is contained in a May 21 press release
announcing Kovalchuk's arrest issued by the U.S. Attorney's Office in the
Northern District of California on May 21.
In it, authorities said that Kovalchuk had been charged with criminal
copyright infringement, trafficking in counterfeit goods, money laundering
and possession of unauthorized credit card information.
The Ukrainian sold counterfeit versions of software from companies such as
Autodesk, Macromedia and Microsoft on eBay and other Web sites and laundered
the proceeds through numerous intermediaries in an effort to disguise its
destination, according to the press release. It said the software had a
retail value "in excess of $3 million."
A BIGGER PLAYER?
But there have been tantalizing hints in foreign media reports that Kovalchuk
may have been a bigger player in the rough-and-tumble world of Ukrainian
computer crime than U.S. authorities have let on:
The Ukrainian UNIAN news agency reported shortly after the arrest that he is
accused of causing $100 million in damage without specifying how that figure
was arrived at, and said he was accused of carrying out computer crimes
against U.S. banks, specifically forging credit cards.
Agence France Presse, which quoted an unidentified official at the U.S.
Embassy in Bangkok as describing Kovalchuk as a criminal "kingpin," reported
that the suspected software pirate also apparently was a hacker who built a
"back door" in the counterfeit software that enabled him to surreptitiously
gain access to purchasers' computers and steal financial data.
Russia's ITAR-Tass news agency reported that Kovalchuk was somehow able to
obtain a passport identifying him as Maksym Vysochansky shortly before
traveling to Thailand on vacation with his wife.
The Secret Service and the U.S. Attorney's Office in San Jose declined
comment on the reports.
Little is known about Kovalchuk, who reportedly is claiming that U.S.
authorities have the wrong man while fighting extradition.
ITAR-Tass reported that he grew up with three siblings in a modest, two-room
apartment in Ternopil in the western Ukraine. His mother, an employee at a
local museum, and father, a locally renowned painter, still live in the
apartment, with their sole visible asset a large library, the news agency
said. His parents refused to discuss their son's arrest.
The news agency said that friends and former teachers at the Institute of
Economics and Management of the Economics Academy, from which he graduated
with honors in 1998, recalled him as modest and "unconflicting."
EXTRADITION SEEN AS LIKELY
Assuming they have solid evidence linking Kovalchuk to the counterfeit
software, U.S. authorities have a good chance of bringing the suspect to the
United States to stand trial, said Douglas McNabb, a Houston-based criminal
defense attorney who specializes in extradition cases.
"The treaty requires that there be dual criminality, where you've got a crime
in both countries that is analogous to a felony," he said. "?I'd be very
surprised if Thailand doesn't have a money-laundering statute at least that
corresponds closely to U.S. law."
No matter what the outcome, Kovalchuk's case illustrates that the United
States is getting serious about going after thieves and hackers in countries
with spotty or nonexistent enforcement records and getting increasing
cooperation even in countries where such criminals have long been
untouchable.
In Kovalchuk's case, for example, U.S authorities were able to identify the
suspect while he was in the Ukraine and then place him on an international
watch list in the event he left the country. When he did, they quickly
orchestrated his arrest, even though he was traveling under a different
name.
Sandy Boulton, director of piracy prevention for Autodesk, said that after
investigators at the company documented multiple sales of its AutoCad design
software on eBay and other Web sites for about one-eighth of its usual
retail price, $4,000, federal agents "followed the money" to its source to
identify Kovalchuk.
"It took some time to track because he set up some rather clever ways to
divert the cash," she said.
GOVERNMENT PROMISES CRACKDOWN
Vladimir Golubev, director of the Computer Crime Research Center in
Zaporozhye, Ukraine, also said there is evidence that the Ukrainian
government is getting serious about cracking down on the various forms of
computer crime that are rife within the Eastern European nation's borders.
"The Ukrainian government has passed ? changes in (the) National Security
Strategy, where computer crime and cyberterrorism were defined as
priorities," he wrote in an e-mail response to an inquiry. "And (the)
Security Service of Ukraine is charged to investigate computer crimes and
cyberterrorism."
But Ukrainian leaders need to do far more to combat copyright infringement
and counterfeiting, said Eric Schwartz, vice president and special counsel
of the International Intellectual Property Alliance (IIPA), which represents
more than 1,300 companies.
"The Ukrainian police began making raids (on piracy operations) two years
ago, but few prosecutions resulted and in the few cases where there were
convictions, they were overturned on technicalities or very meager
administrative penalties were assessed," he said.
The Business Software Alliance, another industry group, estimated that losses
to U.S. companies due to software piracy in the Ukraine amounted to $75.4
million in 2002.
The long-running dispute over the lax enforcement of intellectual property
laws by Ukrainian authorities culminated with the imposition of trade
sanctions by the United States on Dec. 20, 2001, specifically over the
inability of President Leonid Kuchma's government to crack down on a
thriving market in counterfeit optical disks.
The sanctions cost the country $40 million a year in trade benefits and also
resulted in tariffs against other goods and services.
The main obstacle to substantive reform and vigorous enforcement of
intellectual property laws is organized crime, which is responsible for much
of the counterfeiting and intellectual property theft in the Ukraine,
according to sources familiar with the situation.
'MOST LUCRATIVE INCOME SOURCE'
"They're involved in all sort of other operations, but their most lucrative
income source -- and the one they're least likely to be prosecuted for -- is
intellectual property crime," said one source.
In addition to levying punishing sanctions against the Ukraine and other
nations that fail to crack down on counterfeiting and copyright
infringement, U.S. and European leaders are trying to persuade governments
that intellectual property laws offer an effective way of cracking down on
organized crime.
"It's like Al Capone and taxes," said the IIPA's Schwarz. "You may not get
them running guns or drugs, but you can get them selling materials illegally
that come with forensic evidence ? that you can trace back to the master
replicator at the plant."
--
Article distributed for the purposes of education, discussion and review.
http://theMezz.com/forum
Unsubscribe:
http://www.freelists.org/cgi-bin/list?list_id=Cybercrime-alerts
Archives: http://theMezz.com/cybercrime/archive
Brought to you by: http://theMezz.com/lists
-------------------------------------------------------
--
(C) 2003 Hugh Lilly
mail: h.lilly@xxxxxxx
blog: http://hugh.orcon.net.nz
Registered Linux User # 295486, register @ http://counter.li.org
______________________________________________________
There's only so much stupidity you can compensate for;
there comes a point where you compensate for so much
stupidity that it starts to cause problems for the
people who actually think in a normal way.
-Bill, digital.forest tech support