Banks appease online terrorists 
                By Denise Shelton
                June 3, 1996, 1 p.m. PT 

                International terrorists are using the Internet to
                extort money from financial institutions, prompting
                at least some of those institutions to adopt
                appeasement policies. 

                Banks, brokerage houses, and investment firms in
                both the United States and the United Kingdon
                have paid off criminals who threatened to attack
                their computer systems, according to a report in
                the Times of London. The report says gangs of
                online terrorists have amassed up to 400 million
                pounds worldwide by issuing threats that they will
                destroy the computer systems of companies who
                don't meet their monetary demands. 

                The blackmailers demonstrate their ability to make
                good on their threats by using advanced
                information warfare techniques developed by the
                military, the report said. The National Security
                Agency says the criminals have invaded computer
                systems using coded devices called "logic bombs"
                that can be remotely detonated, electromagnetic
                pulses, and high-emission radio frequency guns.
                The terrorists have also reportedly left encrypted
                messages at the highest security levels that read,
                "Now do you believe we can destroy your
                computers?" 

                In four incidents reported to have occurred in
                London, the gangs threatened senior directors of
                financial institutions and demonstrated their ability
                to crash their systems. In each case, the firm
                transferred money to an offshore bank account,
                cash that the gang removed within minutes, the
                report said. In three of the cases, the blackmail
                demand was 10 million pounds. The fourth victim
                paid 12.5 million pounds. 

                Both the FBI and Scotland Yard are currently
                investigating incidents of computer extortion. But
                banking officials told the Times that they are
                reluctant to contact the police about the attacks
                because they fear the publicity would result in a
                loss of customer confidence in their ability to
                protect sensitive financial data. Instead, many
                companies seek help from private investigating
                firms that offer protection from the attacks. 

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