Hackers Underworld 2: Forbidden Knowledge/Hackers Underworld 2: Forbidden Knowledge.iso/LEGAL/BLUE.TXT

Text File | 1994-07-17 | 28KB | 530 lines

DEATH OF THE BLUE BOX

This article is reprinted from Full Disclosure. Copyright (c) 1991 Full
Disclosure. Permission granted by publisher to reprint when subscription
information provided: Full Disclosure, Box 903-R, Libertyville, Illinois
60048, Phone: [phone], Fax: [phone], BBS: [phone], Toll
free: [phone]. Subscriptions: $18 for 12 issues.

This article will provide an historical review of the problem of ``Blue Box''
telecommunications fraud. A blue box being the street name of one, of several
electronic devices designed to allow the user to place free, long distance
telephone calls. The information presented here consists of excerpts from the
1970's National Wiretap Commission Hearings. In some cases, answers that had
clarifying questions interspersed have been merged together without the
extraneous questions for clarity and space reasons.

The excerpts from the following witnesses are used here: Neil Beller,
Division Attorney, Central Telephone Company of Nevada; Michael Simon,
Special Agent, Federal Bureau of Investigation, Las Vegas; and Karl
Berolzheimer, Central Telephone Utilities and Utilities Corporation Counsel;
William Caming, Attorney, American Telephone and Telegraph. Other individuals
are members of the Commission.

Mr. Feldman: Mr. Beller, would you tell us how many investigations you were
involved in and the approximate period of time?

Mr. Beller: From April 22, 1973, to October 15 of 1973, we gave approximately
32 numbers to the FBI.

Mr. Feldman: . . . What does that indicate?

Mr. Beller: We had reason to believe individuals were using some sort of
device on their telephones.

Mr. Feldman: Would you state on what basis you had that belief?

Mr. Beller: We have a computer print out, a copy of which I have here, which
was for selected numbers. These are toll-free network numbers, and studying
these numbers and ascertaining where the called number was, we had reason to
believe that the person was using a foreign device.

The reason for that is that some of the numbers that were called were
numbers, for example, to New York information, or the information office at
TWA. And it is not logical for a person to talk to TWA for 20 minutes or a
half-hour.

Based upon that, we would put either a brush recorder or at a later date we
subsequently acquired another device, which emitted a tape such as this. And
from that we were able to ascertain that the person was, in fact, using a
foreign device on the telephone line.

Mr. Feldman: Agent Simon, how many cases ultimately resulted from the
information provided you?

Mr. Simon: The resulting investigative cases? We had five cases that were
brought to indictment and subsequent prosecution. We had seven other cases
that, because of the United States Attorney's position, prosecution was
declined. And I will give you one specific example, where an individual made
a blue box which was very unsophisticated in comparison to what Mr. Caming
showed us. This box was approximately two-and-a-half feet long by two feet
wide and about 18 inches tall.

This man made it at home from various electronic parts, and his wife used the
device to call her mother once a week in Miami, Florida.

You have to understand, of course, that we did conduct extensive
investigation to obtain all the facts we could before we presented them to
the United States Attorney.

There were other telephone numbers referred to us by Mr. Beller where we
subsequently obtained affidavits in support of a search warrant and
subsequent search warrant were executed and we had what is known as a ``dry
hole.'' The device was not there.

As we progressed with these investigations we became more sophisticated. We
learn with each one.

Mr. Feldman: If we could concentrate on the successful investigations, I
believe that information came to you as to the FBI from a number of different
sources, indicating that various defendants we using electronic toll fraud
devices. I wonder if I you can state the different ways in which this
information came to your attention.

Mr. Simon: There were three different ways. Mr. Beller would furnish us with
a computer tape printout, and after the issuance of a federal grand jury
subpoena directed to Mr. Beller or his designee, he would furnish us with the
name and address of the individual.

We would then conduct a physical surveillance to determine if that person
actually existed. It is always possible to have aliases. We did run into a
number of instances where an individual who was subscribing to the telephone
company service was not, in fact, the name that was on that card.

So once we established this, and after obtaining a search warrant, we would
notify Mr. Beller.

Mr Beller, in turn, would notify one of the technicians who would tell us
that were was, in fact, a device being utilized on that telephone.

Mr. Simon: The second thing we had was confidential sources of information.
[these were FBI informants who would provide information that electronic toll
fraud was occurring just the same as they'd advise of a gambling offense].
And Mr. Moore was first brought to our attention by a confidential source who
furnished the information to an agent of the FBI, Mr. J. Lawrence Sullivan.
Mr. Moore did not have any of these devices even though he was selling them
in Las Vegas. We were able to pick up Michael Raymond Tullis who was
subsequently tried and convicted for fraud by wire based on the confidential
source information.

Mr. Feldman: So you have computer printout information and informant
information. Was there any other?

Mr. Simon: Yes. On Frank Joseph Masterana -- he had been the subject of a
number of legal Title III wire interceptions by not only the Law Vegas
Division, but other Divisions of the FBI. He was at one time in Macon,
Georgia, for sentencing on one of the gambling cases, at which time
confidential source information was received that he was using in Macon,
Georgia, at that time, a blue box to call Las Vegas.

So bearing in mind and having additional information, two of our Las Vegas
FBI agents, in August of '73, observed Masterana in an open pay telephone
booth making a telephone call with what appeared to be a blue box. But they
couldn't get close enough because he was quite surveillance conscious.

Based up on that and subsequent investigations, we were able to assume that
he was using a blue box, but we couldn't put it all together factually.

In conjunction with advice furnished by Strike Force Attorney James Buff, who
is assigned to the Las Vegas & California, Strike Force Office, we together
with the telephone company, worked out a program whereby if we were able to
come up with the various telephones that Masterana was using to make these
alleged calls, Mr. Duff would give us authority to make an immediate arrest,
providing the telephone company could verify the fact that Masterana was
using an electronic device or a blue box.

Mr. Simon: These were pay telephone booths. What was required was to send
agents out in the field and survey Masterana on a continuous basis to find
out what telephone exchanges he was using.

After several days' work we were able to determine he was using three or four
different exchanges. He was very careful. He would use an open pay phone in a
drug store, for example, that was inside of the drug store, where he could
view the exterior entrances into the drug store, watching for agents. And
because of the size of the city of Las Vegas, it didn't take him very long to
find out who we were. So it was difficult to surveil him.

[Description of methods by phone company to verify use of toll fraud devices
ommitted]

Mr. Feldman: Mr. Beller, once you had verified to your own satisfaction,
using the electronic equipment, that, in fact, electronic toll fraud was
committed on the lines, what did you do?

Mr. Beller: Concurrent with the subpoena from the FBI, we'd typically put on
the recorder