Feds Use Spyware & Hacking Tools Including Remote Activation Recordings Via Cell Phone Microphones to Target Suspects

Law-enforcement officials in the U.S. are expanding the use of tools routinely used by computer hackers to gather information on suspects, bringing the criminal wiretap into the cyber age.

Federal agencies have largely kept quiet about these capabilities, but court documents and interviews with people involved in the programs provide new details about the hacking tools, including spyware delivered to computers and phones through email or Web links—techniques more commonly associated with attacks by criminals.

People familiar with the Federal Bureau of Investigation's programs say that the use of hacking tools under court orders has grown as agents seek to keep up with suspects who use new communications technology, including some types of online chat and encryption tools. The use of such communications, which can't be wiretapped like a phone, is called "going dark" among law enforcement.

A spokeswoman for the FBI declined to comment.

The FBI develops some hacking tools internally and purchases others from the private sector. With such technology, the bureau can remotely activate the microphones in phones running Google Inc.'s GOOG +0.26% Android software to record conversations, one former U.S. official said. It can do the same to microphones in laptops without the user knowing, the person said. Google declined to comment.

The bureau typically uses hacking in cases involving organized crime, child pornography or counterterrorism, a former U.S. official said. It is loath to use these tools when investigating hackers, out of fear the suspect will discover and publicize the technique, the person said.

The FBI has been developing hacking tools for more than a decade, but rarely discloses its techniques publicly in legal cases.

Earlier this year, a federal warrant application in a Texas identity-theft case sought to use software to extract files and covertly take photos using a computer's camera, according to court documents. The judge denied the application, saying, among other things, that he wanted more information on how data collected from the computer would be minimized to remove information on innocent people.

Since at least 2005, the FBI has been using "web bugs" that can gather a computer's Internet address, lists of programs running and other data, according to documents disclosed in 2011. The FBI used that type of tool in 2007 to trace a person who was eventually convicted of emailing bomb threats in Washington state, for example.

The FBI "hires people who have hacking skill, and they purchase tools that are capable of doing these things," said a former official in the agency's cyber division. The tools are used when other surveillance methods won't work: "When you do, it's because you don't have any other choice," the official said.

Surveillance technologies are coming under increased scrutiny after disclosures about data collection by the National Security Agency. The NSA gathers bulk data on millions of Americans, but former U.S. officials say law-enforcement hacking is targeted at very specific cases and used sparingly.

Still, civil-liberties advocates say there should be clear legal guidelines to ensure hacking tools aren't misused. "People should understand that local cops are going to be hacking into surveillance targets," said Christopher Soghoian, principal technologist at the American Civil Liberties Union. "We should have a debate about that."

Mr. Soghoian, who is presenting on the topic Friday at the DefCon hacking conference in Las Vegas, said information about the practice is slipping out as a small industry has emerged to sell hacking tools to law enforcement. He has found posts and resumes on social networks in which people discuss their work at private companies helping the FBI with surveillance.

A search warrant would be required to get content such as files from a suspect's computer, said Mark Eckenwiler, a senior counsel at Perkins Coie LLP who until December was the Justice Department's primary authority on federal criminal surveillance law. Continuing surveillance would necessitate an even stricter standard, the kind used to grant wiretaps. But if the software gathers only communications-routing "metadata"—like Internet protocol addresses or the "to" and "from" lines in emails—a court order under a lower standard might suffice if the program is delivered remotely, such as through an Internet link, he said. That is because nobody is physically touching the suspect's property, he added.

An official at the Justice Department said it determines what legal authority to seek for such surveillance "on a case-by-case basis." But the official added that the department's approach is exemplified by the 2007 Washington bomb-threat case, in which the government sought a warrant even though no agents touched the computer and the spyware gathered only metadata.

In 2001, the FBI faced criticism from civil-liberties advocates for declining to disclose how it installed a program to record the keystrokes on the computer of mobster Nicodemo Scarfo Jr. to capture a password he was using to encrypt a document. He was eventually convicted.

A group at the FBI called the Remote Operations Unit takes a leading role in the bureau's hacking efforts, according to former officials.

Officers often install surveillance tools on computers remotely, using a document or link that loads software when the person clicks or views it. In some cases, the government has secretly gained physical access to suspects' machines and installed malicious software using a thumb drive, a former U.S. official said.

The bureau has controls to ensure only "relevant data" are scooped up, the person said. A screening team goes through all of the data pulled from the hack to determine what is relevant, then hands off that material to the case team and stops working on the case.

The FBI employs a number of hackers who write custom surveillance software, and also buys software from the private sector, former U.S. officials said.

Italian company HackingTeam SRL opened a sales office in Annapolis, Md., more than a year ago to target North and South America. HackingTeam provides software that can extract information from phones and computers and send it back to a monitoring system. The company declined to disclose its clients or say whether any are in the U.S.

U.K.-based Gamma International offers computer exploits, which take advantage of holes in software to deliver spying tools, according to people familiar with the company. Gamma has marketed "0 day exploits"—meaning that the software maker doesn't yet know about the security hole—for software including Microsoft Corp.'s Internet Explorer, those people said. Gamma, which has marketed its products in the U.S., didn't respond to requests for comment, nor did Microsoft.

Thanks to JENNIFER VALENTINO-DEVRIES and DANNY YADRON.

Tweet

John Whitehead Discusses "A Government of Wolves: The Emerging American Police State" on #CrimeBeatRadio

On August 8th, Mr. John Whitehead discusses his book "A Government of Wolves: The Emerging American Police State" on Crime Beat Radio.

Crime Beat is a weekly hour-long radio program that airs every Thursday at 8 p.m. EST. Crime Beat presents fascinating topics that bring listeners closer to the dynamic underbelly of the world of crime. Guests have included ex-mobsters, undercover law enforcement agents, sports officials, informants, prisoners, drug dealers and investigative journalists, who have provided insights and fresh information about the world’s most fascinating subject: crime.

Tweet

Three Somali Pirates Sentenced to Life in Prison for Murders of Four Americans Aboard SV Quest

Somali nationals Ahmed Muse Salad, a/k/a “Afmagalo,” 25; Abukar Osman Beyle, 20; and Shani Nurani Shiekh Abrar, 29, who were previously found guilty by jury of all 26 counts charged, to include piracy, conspiracy to commit kidnapping, hostage taking resulting in death, kidnapping resulting in death, and multiple firearms offenses, were sentenced by a federal jury. The three defendants were sentenced to life in prison for their roles in the February 22, 2011 murders of four Americans aboard the sailing vessel Quest. The victims included Scott Underwood Adam, Jean Savage Adam, Phyllis Patricia Macay, and Robert Campbell Riggle.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; George Venizelos, Assistant Director in Charge (ADIC) of the FBI’s New York Field Office; Royce E. Curtin, Special Agent in Charge (SAC) of the FBI’s Norfolk Field Office; and Michael Monroe, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS), made the announcement after the sentence was accepted by Chief United States District Court Judge Rebecca Beach Smith.

“Four Americans were taken hostage, terrorized, and then murdered. Life in prison is reserved for those who commit heinous crimes—and the jury today decided the execution of four innocent Americans on the high seas meets that high bar,” said United States Attorney Neil H. MacBride. “Scott Adam, Jean Adam, Phyllis Macay, and Robert Riggle lost their lives, and their families lost their loved ones. Nothing can make this right; nothing can make their families whole again—but we hope today’s verdict and sentences will bring some closure to their nightmare that began two years ago on the Indian Ocean.”

“This case exemplifies the ongoing, outstanding cooperation between federal law enforcement and federal prosecutors,” said Norfolk SAC Royce Curtin. “Today’s sentencings should send a clear message to anyone committing acts of criminal violence against American citizens at sea that they will be prosecuted to the fullest extent of the law.”

Assistant Director in Charge Venizelos stated, “Pirates armed with AK-47s and rocket-propelled grenades took four innocent Americans hostage aboard their own vessel. When negotiations reached an impasse, one pirate launched a grenade at a nearby U.S. Navy ship while others murdered four Americans aboard the Quest. Today’s life sentences provide a vigorous deterrent for armed bandits roaming our seas. The FBI’s commitment to stopping this scourge of violence is unwavering.”

The defendants were previously indicted on July 8, 2011, by a federal grand jury on 26 counts, which included conspiracy to commit hostage taking, conspiracy to commit kidnapping, kidnapping resulting in death, conspiracy to commit violence against maritime navigation resulting in death, piracy, and firearms offenses. The defendants were convicted on all 26 counts on July 8, 2013. According to court records and evidence at trial, Salad, Beyle, Abrar, and others—armed with firearms and a rocket-propelled grenade (RPG)—boarded the Quest while the four Americans slept on February 18, 2011. They gained control of the vessel and took the four American citizens as hostages. Their plan was to take the hostages to Somalia, where they and their additional co-conspirators in Somalia could commence ransom negotiations. While they sailed toward Somalia, the three defendants and their co-conspirators were taking turns standing armed guard over the hostages; at the same time, United States Navy ships headed towards the Quest to aid the hostages and prevent the Quest from proceeding to Somalia.

Beginning on February 19, 2011, communications had been established, and the United States Navy and the FBI began negotiating with the pirates to secure the safe release of the hostages. On February 21, 2011, two co-conspirators representing the pirates onboard the Q, were transferred to the USS Sterett to negotiate. The negotiations reached an impasse when the co-conspirators were told that they were not going to be allowed to take the hostages ashore in Somalia. The decision was made to detain the co-conspirators after they refused to release the hostages and threatened to kill them if they were not allowed to return to Somalia.

Testimony revealed that Abrar fired a shot over the head of Scott Adam and instructed Adam to tell the U.S. Navy that if the military came any closer, the conspirators would kill the hostages.

On February 22, 2011, without provocation and before the hostages could be rescued by members of the military, a co-conspirator fired an RPG in the general direction of the USS Sterett. Witnesses testified that sustained firing came from the Quest and that glass could be seen breaking on the starboard side of the Quest. Witnesses also testified that Salad, Beyle, and Abrar were the shooters and responsible for the deaths of Scott Adam, Jean Adam, Phyllis Macay, and Robert Riggle. After the gun fire died down, the navy dispatched SEALS to the Quest. The pirates aboard the Quest began surrendering, and some were seen throwing AK-47 rifles into the water.

This case was investigated by the FBI and the Naval Criminal Investigative Service. Assistant United States Attorneys Joseph DePadilla, Brian J. Samuels, and Benjamin L. Hatch prosecuted the case on behalf of the United States.

Tweet

Tomorrow, @PeterLance to Discuss #DealwiththeDevil at @TheMobMuseum, Details Greg Scarpa Sr.'s Relationship with the #FBI

On Saturday, Aug. 3, award-winning author Peter Lance will deliver a presentation and sign his book, “Deal with the Devil” at The Mob Museum, the National Museum of Organized Crime and Law Enforcement. His presentation, to be aired as part of C-SPAN-Book-TV regular programming, will take place at 1 p.m. with the book signing scheduled to follow at 2:30 p.m.

Since 2001, Lance has been writing investigative books regarding the FBI’s counter-terrorism and organized crime track records. He is a five-time winner of the News & Documentary Emmy award and recipient of the Robert F. Kennedy Journalism award. In addition to “Deal with the Devil,” Lance has written three books for HarperCollins regarding international terrorism and the Green Berets.

Lance’s book details how the government’s relationships with organized crime went all the way to the Kennedy presidency. In more than four decades as a violent gangster, Gregory Scarpa, Sr., served only 30 days in jail during the years when he was "closed" as an FBI source. For more than 30 of those years, a series of FBI agents intervened to keep the so-called Mad Hatter on the street. But that was not the most disturbing aspect of Scarpa's relationship with the government. In light of the 1,150-plus pages of the recently accessed FBI files on Scarpa, Sr., Lance argues the FBI's very playbook against La Cosa Nostra was defined and shaped by what the elder Scarpa fed them-particularly in the years from 1961 to 1972, when J. Edgar Hoover himself was on the receiving end of 34's Airtels. Drawing on secret FBI Airtels never before seen outside the Bureau, it is revealed how Gregory Scarpa, Sr., then a young capo for the Profaci crime family, led J. Edgar Hoover himself into the inner sanctum of the underworld. Once that alliance began, there seemed to be no turning back for the Bureau.

"They enlisted a hyper-violent killer to stop much less capable murderers," says Ellen Resnick, defense attorney, whose work helped expose this unholy alliance. "It was the ultimate ends-justify-the-means relationship."

The event is free with Museum admission but reservations are encouraged and may be made by calling (702) 229-2734 or via www.TheMobMuseum.org.

Tweet

Northwestern University Does Not Admit Liability, Yet will Pay Nearly $3 Million to the United States to Settle Cancer Research Grant Fraud Claims

Northwestern University will pay the United States $2.93 million to settle claims of cancer research grant fraud by a former researcher and physician at the university’s Robert H. Lurie Comprehensive Center for Cancer in Chicago. Northwestern agreed to the settlement in a federal False Claims Act lawsuit that was unsealed after the government investigated the claims made by a former employee and whistleblower who will receive a portion of the settlement.

Northwestern allegedly allowed one of its researchers, Dr. Charles L. Bennett, to submit false claims under research grants from the National Institutes of Health. The settlement covers improper claims that Dr. Bennett submitted for reimbursement from the federal grants for professional and consulting services, subcontracts, food, hotels, travel, and other expenses that benefited Dr. Bennett, his friends, and family from January 1, 2003, through August 31, 2010.

The allegations were made in a civil lawsuit filed under seal in 2009 by Melissa Theis, a former employee of the Lurie Cancer Center, who will receive $498,100 in settlement proceeds. Her allegations were investigated by the U.S. Department of Health and Human Services Officeof Inspector General, the Federal Bureau of Investigation, the National Institutes of Health, and the U.S. Attorney’s Office, resulting in the settlement announced today by Gary S. Shapiro, United States Attorney for the Northern District of Illinois. At the same time, the whistleblower lawsuit that initiated the case was unsealed. United States, et al., ex rel. Melissa Theis v. Northwestern University, Dr. Charles L. Bennett, et al., No. 09 C 1943 (N.D. Ill.).

Northwestern, which fully cooperated during the investigation, did not admit liability as part of the settlement.

“Allowing researchers to use federal grant money to pay for personal travel, hotels, and meals and to hire unqualified friends and relatives as ‘consultants’ violates the public trust and federal law,” Mr. Shapiro said. “This settlement, combined with the willingness of insiders to report fraud, should help deter such misconduct, but when it doesn’t, federal grant recipients who allow the system to be manipulated should know that we will aggressively pursue all available legal remedies,” he added.

“The mismanagement or improper expenditure of grant funds is unacceptable and will not be tolerated,” said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General-Chicago Region. “The OIG will continue to diligently investigate allegations of this nature to ensure that taxpayer dollars are being properly utilized.”

Cory B. Nelson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation, said, “The FBI takes allegations of fraud seriously, especially those allegations from insiders who are often in the best position to detect wrongdoing long before it would otherwise come to the attention of law enforcement.”

Northwestern agreed to pay the settlement within 14 business days. The agreement covers allegations that the university submitted false claims to NIH for costs that Dr. Bennett incurred on his grant-funded research projects involving adverse drug-events, multiple myeloma drugs, a blood disorder known as thrombotic thrombocytopenic purpura, and quality of care for cancer patients. Dr. Bennett allegedly billed those federal grants for family trips, meals and hotels for himself and friends, and “consulting fees” for unqualified friends and family members, including his brother and cousin. At Dr. Bennett’s request, Northwestern also allegedly improperly subcontracted with various universities for services that were paid for by the NIH grants.

The United States was represented by Assistant U.S. Attorney Kurt N. Lindland.

Under the federal False Claims Act, defendants may be liable for triple the amount of actual damages and civil penalties between $5,500 and $11,000 for each violation. Individual whistleblowers may be eligible to receive between 15 and 30 percent of the amount of any recovery.

Tweet