The Hacker Chronicles - A…the Computer Underground/The Hacker Chronicles - A Tour of the Computer Underground (P-80 Systems).iso/cud1/cud116.txt

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              ***  Volume 1, Issue #1.16 (June 19, 1990)   **
       ** SPECIAL ISSUE: JUDGE BUA'S OPINION ON MOTION TO DISMISS **
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The defense in Craig Neidorf's case filed several motions on his
behalf, but all were dismissed by the presiding judge, Nicholas Bua.
Emmanuel Goldstein of 2600 MAGAZINE provided the following
transcript of the opinion.
----------------------------------

             UNITED STATES DISTRICT COURT
             NORTHERN DISTRICT OF ILLINOIS
              EASTERN DIVISION

 UNITED STATES OF AMERICA,     )
                               )
          Plaintiff,           )
               )  No. 90 CR 0070
     v.        )  Hon. Nicholas J. Bua,
               )  Presiding
 ROBERT J. RIGGS, also         )
 known as Robert Johnson,      )
 CRAIG NEIDORF, also known     )
 as Knight Lightning,          )
                               )
          Defendants.          )

              MEMORANDUM ORDER
      Over the course of the past decade, advances in technology and growing
 respect and acceptance for the powers of computers have created a true
 explosion in the computer industry. Quite naturally, the growth of computer
 availability and application has spawned a host of new legal issues. This
 case requires the court to wrestle with some of these novel legal issues
 which are a product of the marriage between law and computers.
      The indictment charges that defendants Robert J. Riggs and Craig
 Neidorf, through the use of computers, violated the federal wire fraud
 statute, 18 U.S.C. 1343, and the federal statute prohibiting interstate
 transportation of stolen property, 18 U.S.C. 2314. Neidorf argues that the
 wire fraud statute and the statute prohibiting interstate transportation of
 stolen property do not apply to the conduct with which he is charged.
 Therefore, he has moved to dismiss the charges against him, as set forth in
 Counts II-IV of the indictment, which are based on those statutes. EThe
 current indictment also contains three counts -- V, VI, and VII -- which
 set forth charges against Neidorf for violations of 1030(a)(6)(A) of the
 Computer Fraud and Abuse Act of 1986, 18 U.S.C. 1030(a)(6)(A). Although
 Neidorf also moves to dismiss those counts, the government has indicated
 that it is in the process of drafting a superseding indictment which may
 not contain any charges under the Computer Fraud and Abuse Act of 1986.
 Therefore, the court will reserve its ruling on Neidorf's motion to dismiss
 Counts V, VI, and VII until the superseding indictment is filed. The court
 will also reserve its ruling on Neidorf's motion for a bill of particulars,
 which by its terms pertains only to Counts V, VI, and VII.L Neidorf has
 also filed various other pretrial motions. For the reasons stated herein,
 Neidorf's motions are denied.
             I.   THE INDICTMENT
 A. Factual Allegations
      In about September 1988, Neidorf and Riggs devised and began
 implementing a scheme to defraud Bell South Telephone Company ("Bell
 South"), which provides telephone services to a nine-state region including
 Alabama, Georgia, Mississippi, Tennessee, Kentucky, Louisiana, North
 Carolina, South Carolina, and Florida. The objective of the fraud scheme
 was to steal Bell South's computer text file EA "computer text file" is a
 collection of stored data which, when retrieved from a disk or other
 computer storing device, presents typed English characters on a computer
 monitor, a printer, or other medium compatible with the computer storing
 the data.L which contained information regarding its enhanced 911 (E911)
 system for handling emergency calls to policy <sic>, fire, ambulance, and
 other emergency services in municipalities. The text file which Riggs and
 Neidorf planned to steal specifically details the procedures for
 installation, operation, and maintenance of E911 services in the region in
 which Bell South operates. Bell South considered this file to contain
 valuable proprietary information and, therefore, closely guarded the
 information from being disclosed outside of Bell South and its
 subsidiaries. Riggs and Neidorf wanted to obtain the E911 text file so it
 could be printed in a computer newsletter known as "PHRACK" which Neidorf
 edited and published.
      In about December 1988, Riggs began the execution of the fraud scheme
 by using his home computer in Decatur, Georgia, to gain unlawful access to
 Bell South's computer system located at its corporate headquarters in
 Atlanta, Georgia. After gaining access to Bell South's system, Riggs
 "downloaded" E"Downloading" is the process of transferring files, programs,
 or other computer-stored information from a remote computer to one's own
 computer. See Note, COMPUTER BULLETIN BOARD OPERATOR LIABILITY FOR USER
 MISUSE, 54 Fordham L. Rev. 439, 439 n.2 (1988). "Uploading" is the reverse
 process, i.e., transferring computer-stored data from one's own computer to
 a remote computer. Id.L the text file, which described in detail the
 operation of the E911 system in Bell South's operating region. Riggs then
 disguised and concealed his unauthorized access to the Bell South system by
 using account codes of persons with legitimate access to the E911 text
 file.
      Pursuant to the scheme he had devised with Neidorf, Riggs then
 transferred the stolen computer text file to Neidorf by way of an
 interstate computer data network. Riggs stored the stolen text file on a
 computer bulletin board system EA computer bulletin board system is a
 computer program that simulates an actual bulletin board by allowing
 computer users who access a particular computer to post messages, read
 existing messages, and delete messages. The messages exchanged may contain
 a wide variety of information, including stolen credit card numbers,
 confidential business information, and information about local community
 events. See Note, COMPUTER BULLETIN BOARD OPERATOR LIABILITY FOR USER
 MISUSE, 54 Fordham L. Rev. 439, 439-41 & nn.1-11 (1988); see also Jensen,
 AN ELECTRONIC SOAP BOX: COMPUTER BULLETIN BOARDS AND THE FIRST AMENDMENT,
 39 Fed. Com. L.J. 217 (1987); Morrison, ELECTRONIC BULLETIN BOARD SYSTEM
 PROYER BBS, 13 Legal Econ. 44 (1987); Soma, Smith, & Sprague, LEGAL
 ANALYSIS OF ELECTRONIC BULLETIN BOARD ACTIVITIES, 7 W. New Engl. L.Rev. 571
 (1985).L located in Lockport, Illinois, so as to make the file available to
 Neidorf. The Lockport bulletin board system was used by computer "hackers"
 EFor a discussion of the definition of "hackers," see Part II, Subpart C,
 infra.L as a location for exchanging and developing software tools and
 other information which could be used for unauthorized intrusion into
 computer systems. Neidorf, a twenty-year-old student at the University of
 Missouri in Columbia, Missouri, used a computer located at his school to
 access the Lockport computer bulletin board and thereby receive the Bell
 South E911 text file from Riggs. At the request of Riggs, Neidorf then
 edited and retyped the E911 text file in order to conceal the fact that it
 had been stolen from Bell South. Neidorf then "uploaded" ESee supra note
 2.L his revised version of the stolen file back onto the Lockport bulletin
 board system for Riggs' review. To complete the scheme, in February 1989,
 Neidorf published his edited edition of Bell South's E911 text file in his
 PHRACK newsletter.
 B. Charges
      The current indictment asserts seven counts. Count I charges that
 Riggs committed wire fraud in violation of 18 U.S.C. 1343 by transferring
 the E911 text file from his home computer in Decatur, Georgia to the
 computer bulletin board system in Lockport, Illinois. Count II charges both
 Riggs and Neidorf with violating 1343 by causing the edited E911 file to be
 transferred from a computer operated by Neidorf in Columbia, Missouri, to
 the computer bulletin board system in Lockport, Illinois. Counts III and IV
 assert that by transferring the E911 text file via an interstate computer
 network, Riggs and Neidorf violated the National Stolen Property Act, 18
 U.S.C. 2314, which prohibits interstate transfer of stolen property.
 Finally, Counts V-VII charge Riggs and Neidorf with violating 1030(a)(6)(A)
 of the Computer Fraud and Abuse Act of 1986, 18 U.S.C. 1030(a)(6)(A), which
 prohibits knowingly, and with intent to defraud, trafficking in information
 through which a computer may be accessed without authorization.
               II.  DISCUSSION
 A. Motion to Dismiss Count II
      Neidorf claims that Count II of the indictment is defective because it
 fails to allege a scheme to defraud, one of the necessary elements for a
 wire fraud claim under 18 U.S.C. 1343. See LOMBARDO V. UNITED STATES, 865
 F.2d 155, 157 (7th Cir.) (holding that the two elements of a wire fraud
 claim under 1343 are a scheme to defraud and the use of wire communications
 in furtherance of the scheme), CERT. DENIED, 109 S.Ct. 3186 (1989). All
 Count II charges, says Neidorf, is that he received and then transferred a
 computer text file, not that he participated in any scheme to defraud.
      Unsurprisingly, Neidorf's reading of the indictment is self-servingly
 narrow. The indictment plainly and clearly charges that Neidorf and Riggs
 concocted a fraud scheme, the object of which was to steal the E911 text
 file from Bell South and to distribute it to others via the PHRACK
 newsletter. The indictment also clearly alleges that both Riggs and Neidorf
 took action in furtherance of the fraud scheme. Riggs allegedly used
 fraudulent means to access Bell South's computer system and then disguised
 his unauthorized entry. Neidorf allegedly furthered the scheme by redacting
 from the E911 text file references to Bell South and other information
 which would reveal the source of the E911 file, transmitting the redacted
 file back to the Lockport bulletin board for Riggs review, and publishing
 the redacted text file in the PHRACK newsletter for others' use. Moreover,
 both Neidorf and Riggs allegedly used coded language, code names, and other
 deceptive means to avoid the detection of their fraud by law enforcement
 officials. These allegations sufficiently set forth the existence of a
 scheme to defraud, as well as Neidorf's participation in the scheme. See
 MCNALLY V. UNITED STATES, 483 U.S. 350, 358 (1987) (where the Court,
 quoting HAMMERSCHMIDT V. UNITED STATES, 265 U.S. 182, 188 (1924), held that
 "to defraud" as used in the mail fraud statute simply means "wronging one
 in his property rights by dishonest methods or schemes" usually by "the
 deprivation of something of value by trick, deceit, chicane, or
 overreaching"); see also CARPENTER V. UNITED STATES, 108 S.Ct. 316, 320-21
 (1987) (applying MCNALLY to the wire fraud statute, the Court held that a
 Wall Street Journal columnist participated in a scheme to defraud
 chargeable under 1343 where he executed a plan under which he disclosed
 confidential financial information to an investor in exchange for a share
 of the investor's profits from that information).
      Neidorf also argues that Count II is deficient because it fails to
 allege that he had a fiduciary relationship with Bell South. To support
 this position, Neidorf relies on cases such as UNITED STATES V. RICHTER,
 610 F. Supp. 480 (N.D. Ill. 1985), and UNITED STATES V. DORFMAN, 532
 F.Supp. 1118 (1981). In each of those cases, as well as other similar cases
 cited by Neidorf, the court held that where a wire fraud charge is based on
 the deprivation of an intangible right, such as the right to honest and
 fair government or the right to the loyal service of an employee, the
 government must allege the existence of a fiduciary relationship between
 the defendant and the alleged victim to state a charge under 1343.
      In the instant case, however, the wire fraud charge is not based on
 the deprivation of an intangible right. The government charges Riggs and
 Neidorf with scheming to defraud Bell South out of PROPERTY -- the
 confidential information contained in the E911 text file. The indictment
 specifically alleges that the object of defendants' scheme was the E911
 text file, which Bell South considered to be valuable, proprietary,
 information. The law is clear that such valuable, confidential information
 is "property," the deprivation of which can form the basis of a wire fraud
 charge under 1343. See CARPENTER, 108 S.Ct. at 320; see also KEANE V.
 UNITED STATES, 852 F.2d 199, 205 (7th Cir.), CERT. DENIED, 109 S.Ct. 2109
 (1989). Therefore, Neidorf's argument misconstrues the wire fraud charge
 against him. Cases such as RICHTER and DORFMAN are wholly inapposite.
 EMoreover, to the extent that prior case law such as DORFMAN and RICHTER
 held that a mail fraud or a wire fraud charge can be based on the
 deprivation of intangible rights so long as a fiduciary relationship exists
 between the victim and the defendant, those cases are no longer good law.
 The Supreme Court expressly rejected the notion that such a charge can be
 based on the deprivation of an intangible right -- fiduciary relationship
 or not -- in MCNALLY V. UNITED STATES, 483 U.S. 350 (1987). See CARPENTER
 V. UNITED STATES, 108 S.Ct. 316, 320 (1987). The MCNALLY Court ruled that a
 mail fraud charge must be based on the deprivation of PROPERTY. Id.
 However, the property which forms the basis for a wire fraud or mail fraud
 charge can be "intangible" property. See BATEMAN V. UNITED STATES, 875 F.2d
 1304, 1306 & n.2 (7th Cir. 1989); see also UNITED STATES V. BARBER, 881
 F.2d 345, 348 (7th Cir. 1989), CERT. DENIED, 109 L.Ed. 318 (1990). This
 distinction between intangible property and intangible rights has somewhat
 muddled the ruling in MCNALLY. Id.L
      As further support for his argument that fiduciary relationship
 between himself and Bell South must be alleged to state a wire fraud charge
 against him, Neidorf analogizes his role in the alleged scheme to that of
 an "innocent tippee" in the securities context, such as the defendants in
 DIRKS V. SECURITIES EXCHANGE COMMISSION, 463 U.S. 646 (1983), and CHIARELLA
 V. UNITED STATES, 445 U.S. 222 (1980). This analogy, however, is
 fallacious. Those cases involved individuals who come upon information
 LAWFULLY; the question in each of those cases was whether, once possessing
 that information, the individual had a duty to disclose it. In the instant
 case, in contrast, Neidorf is alleged to have planned and participated in
 the scheme to defraud Bell South. Although Riggs allegedly was the one who
 actually stole the E911 text file from Bell South's computer system, the
 government alleges that Neidorf was completely aware of Riggs' activities
 and agreed to help Riggs conceal the theft to make the fraud complete.
 Therefore, in no way can Neidorf be construed as being in a similar
 situation to the innocent tippees in DIRKS and CHIARELLA. ESimilarly, the
 case of UNITED STATES V. CHESTERMAN, No. 89-1276 (2d Cir. May 2, 1990),
 which Neidorf submitted to the court in a supplemental brief, does not lend
 any support to Neidorf's position.L As a result, the court rejects his
 argument that Count II is defective for failing to allege a fiduciary duty
 between himself and Bell South. Neidorf's motion to dismiss Count II is
 accordingly denied.
 B. Motion to Dismiss Counts III and IV
      Counts III and IV charge Riggs and Neidorf with violating 18 U.S.C.
 2314, which provides, in relevant part: "Whoever transports, transmits, or
 transfers in interstate or foreign commerce any goods, wares, merchandise,
 securities or money, of the value of $5000 or more, knowing the same to
 have been stolen, converted or taken by fraud . . . [s]hall be fined not
 more than $10,000 or imprisoned not more than ten years, or both." The
 government concedes that charging Neidorf under 2314 plots a course on
 uncharted waters. No court has ever held that the electronic transfer of
 confidential, proprietary business information from one computer to another
 across state lines constitutes a violation of 2314. However, no court has
 addressed the issue. Surprisingly, despite the prevalence of
 computer-related crime, this is a case of first impression. The government
 argues that reading 2314 as covering Neidorf's conduct in this case is a
 natural adaptation of the statute to modern society. Conversely, Neidorf
 contends that his conduct does not fall within the purview of 2314 and that
 the government is seeking an unreasonable expansion of the statute. He
 urges the court to dismiss the charge on two grounds.
      Neidorf's first argument is that the government cannot sustain a 2314
 charge in this case because the only thing which he allegedly caused to be
 transferred across state lines was "electronic impulses." Neidorf maintains
 that under the plain language of the statute, this conduct does not come
 within the scope of 2314 since electronic impulses do not constitute
 "goods, wares, or merchandise."
      The court is unpersuaded by Neidorf's disingenuous argument that he
 merely transferred electronic impulses across state lines. Several courts
 have upheld 2314 charges based on the wire transfer of fraudulently
 obtained money, rejecting the arguments of the defendants in those cases
 that only electronic impulses, not actual money, crossed state lines. For
 example, in UNITED STATES V. GILBOE, 684 F.2d 235 (2d Cir. 1982), CERT.
 DENIED, 459 U.S. 1201 (1983), the court held, in affirming a 2314
 conviction based on the wire transfer of funds: "The question whether
 [2314] covers electronic transfers of funds appears to be one of first
 impression, but we do not regard it as a difficult one. Electronic signals
 in this context are the means by which funds are transported. The beginning
 of the transaction is money in one account and the ending is money in
 another. The manner in which the funds were moved does not affect the
 ability to obtain tangible paper dollars or a bank check from the receiving
 account. If anything, the means of transfer here were essential to the
 fraudulent scheme." Id. at 238. Other circuits have followed the reasoning
 in GILBOE. See UNITED STATES V. KROH, 896 F.2d 1524, 1528-29 (8th Cir.
 1990); UNITED STATES V. GOLDBERG, 830 F.2d 459, 466-67 (3d Cir. 1987);
 UNITED STATES V. WRIGHT, 791 F.2d 133, 135-37 (10th Cir. 1986); see also
 UNITED STATES V. KENNGOTT, 840 F.2d 375, 380 (7th Cir. 1987) (citing GILBOE
 with approval). In all of these cases, the courts held that money was
 transferred across state lines within the meaning of 2314 because funds
 were actually accessible in one account prior to the transfer, and those
 funds were actually accessible in an out-of-state account after the
 transfer. The courts refused to accept the superficial characterization of
 the transfers as the mere transmittal of electronic impulses.
      Similarly, in the instant case, Neidorf's conduct is not properly
 characterized as the mere transmission of electronic impulses. Through the
 use of his computer, Neidorf allegedly transferred proprietary business
 information -- Bell South's E911 text file. Like the money in the case
 dealing with wire transfers of funds, the information in the E911 text file
 was accessible at Neidorf's computer terminal in Missouri before he
 transferred it, and the information was also accessible at the Lockport,
 Illinois computer bulletin board after Neidorf transferred it. Therefore,
 under GILBOE, KROH, WRIGHT, and GOLDBERG, the mere fact that the
 information actually crossed state lines via computer-generated electronic
 impulses does not defeat a charge under 2314.
      The question this case presents, then, is not whether electronic
 impulses are "goods, wares, or merchandise" within the meaning of 2314, but
 whether the proprietary information contained in Bell South's E911 text
 file constitutes a "good, ware, or merchandise" within the purview of the
 statute. This court answers that question affirmatively. It is well-settled
 that when proprietary business information is affixed to some tangible
 medium, such as a piece of paper, it constitutes "goods, wares, or
 merchandise" within the meaning of 2314. See UNITED STATES V. GREENWALD,
 479 F.2d 320, 322 (6th Cir.) (documents containing valuable chemical
 formulae are "goods, wares, or merchandise" under 2314), CERT. DENIED, 414
 U.S. 854 (1973); UNITED STATES V. BOTTONE, 365 F.2d 389, 393 (2d Cir.)
 (copies of documents describing a manufacturing process of patented drugs
 constitute a "good" under 2314), CERT. DENIED, 385 U.S. 974 (1966); UNITED
 STATES V. LESTER, 282 F.2d 750, 754-55 (3d Cir. 1960) (copies of
 geophysical maps identifying oil deposits come within the purview of 2314),
 CERT. DENIED, 364 U.S. 937 (1961); UNITED STATES V. SEAGRAVES, 265 F.2d 876
 (3d Cir. 1959) (same facts as in LESTER).
      Therefore, in the instant case, if the information in Bell South's
 E911 text file had been affixed to a floppy disk, or printed out on a
 computer printer, then Neidorf's transfer of that information across state
 lines would clearly constitute the transfer of "goods, wares, or
 merchandise" within the meaning of 2314. This court sees no reason to hold
 differently simply because Neidorf stored the information inside computers
 instead of printing it out on paper. In either case, the information is in
 a transferrable, accessible, even salable form.
      Neidorf argues in his brief that a 2314 charge cannot survive when the
 "thing" actually transferred never takes tangible form. A few courts have
 apparently adopted this position. EAlthough, contrary to Neidorf's
 arguments, neither the Supreme Court's decision in UNITED STATES V.
 DOWLING, 473 U.S. 207 (1985), nor the Seventh Circuit's decision in UNITED
 STATES V. KENNGOTT, 840 F.2d 375 (7th Cir. 1987), stand for the proposition
 that only tangible objects fall within the definition of "goods, wares, or
 merchandise" under 2314. The definition of the term "goods, wares, or
 merchandise" was not even at issue in either of those cases.L For example,
 in UNITED STATES V. SMITH, 686 F.2d 234 (5th Cir. 1982), the court held
 that a copyright does not fit within the definition of "goods, wares, or
 merchandise" under 2314. The court ruled that in order to come within that
 definition, "[t]he 'thing' or 'item' must have some sort of tangible
 existence; it must be in the nature of 'personal property or chattels.'"
 Id. at 241. Similarly, in BOTTONE, supra, where the court held that copies
 of documents describing a manufacturing process for a patented drug
 constitute "goods, wares, or merchandise" under 2314, the court opined: "To
 be sure, where no tangible objects were ever taken or transported, a court
 would be hard pressed to conclude that 'goods' had been stolen and
 transported within the meaning of 2314; the statute would presumably not
 extend to the case where a carefully guarded secret was memorized, carried
 away in the recesses of a thievish mind and placed in writing only after a
 [state] boundary had been crossed." 365 F.2d at 393.
      Nevertheless, this court is not entirely convinced that tangibility is
 an absolute requirement of "goods, wares, or merchandise" under 2314.
 Congress enacted 2314 to extend the National Motor Vehicle Theft Act to
 cover all stolen property over a certain value ($5000) which is knowingly
 transported across state lines. See UNITED STATES V. DOWLING, 473 U.S. 207,
 218-20 (1985). In line with this broad congressional intent, courts have
 liberally construed the term "goods, wares, or merchandise" as "a general
 and comprehensive designation of such personal property and chattels as are
 ordinarily the subject of commerce." See UNITED STATES V. WHALEY, 788 F.2d
 581, 582 (9th Cir.) (quoting SEAGRAVES, 265 F.2d at 880), CERT. DENIED, 479
 U.S. 962 (1986). Reading a tangibility requirement into the definition of
 "goods, wares, or merchandise" might unduly restrict the scope of 2314,
 especially in this modern technological age. For instance, suppose the
 existence of a valuable gas, used as an anesthetic, which is colorless,
 odorless, and tasteless -- totally imperceptible to the human senses. If
 this gas is stored in a tank in Indiana, and a trucker hooks up to the
 tank, releases the valuable gas into a storage tank on his truck, and then
 takes the gas to Illinois to sell it for a profit, is there no violation of
 2314 simply because the gas is not technically tangible? This court is
 reluctant to believe that any court would construe 2314 so narrowly.
      In any event, this court need not decide that issue to resolve this
 case, for even if tangibility is a requirement of "goods, wares or
 merchandise" under 2314, in this court's opinion the computer-stored
 business information in this case satisfies that requirement. Although not
 printed out on paper, a more conventional form of tangibility, the
 information in Bell South's E911 text file was allegedly stored on
 computer. Thus, by simply pressing a few buttons, Neidorf could recall that
 information from computer storage and view it on his computer terminal. The
 information was also accessible to others in the same fashion if they
 simply pressed the right buttons on their computer. This ability to access
 the information in viewable form from a reliable storage place
 differentiates this case from the mere memorization of a formula and makes
 this case more similar to cases like GREENWALD, BOTTONE, SEAGRAVES, and
 LESTER, where proprietary information was also stored, but in a more
 traditional manner -- on paper. The accessibility of the information in
 readable form from a particular storage place also makes the information
 tangible, transferable, salable and, in this court's opinion, brings it
 within the definition of "goods, wares, or merchandise" under 2314.
      In order to sustain a charge against Neidorf under 2314, however, the
 government cannot simply allege that Neidorf transferred "goods, wares, or
 merchandise" across state boundaries; the government must also allege that
 Neidorf executed the transfer knowing the goods were "stolen, converted or
 taken by fraud." This requirement forms the basis for Neidorf's second
 challenge to Counts III and IV. Relying on UNITED STATES V. DOWLING, 473
 U.S. 207 (1985), Neidorf maintains that the 2314 charges should be
 dismissed because the "things" he allegedly transferred are not the type of
 property which is capable of being "stolen, converted or taken by fraud."
      In DOWLING, the government charged the defendant with violating 2314
 by shipping "bootleg" and "pirated" EA "bootleg" phonorecord is an
 unauthorized copy of a commercially unreleased performance. A "pirated"
 phonorecord is an unauthorized copy of a performance already commercially
 released. DOWLING, 473 U.S. at 205-06 n.2.L phonorecords across state
 lines. Id. at 212. The government argued that the shipments came within
 2314 because the phonorecords embodied performances of copyrighted musical
 compositions which the defendant had no right to distribute. Id. at 214-15.
 The Court framed the issue in the case as follows: "Dowling does not
 contest that he caused the shipment of goods in interstate commerce, or
 that the shipments had sufficient value to meet the monetary requirement.
 He argues, instead, that the goods shipped were not 'stolen, converted or
 taken by fraud.'" "We must determine, therefore, whether phonorecords that
 include the performance of copyrighted musical compositions for the use of
 which no authorization has been sought or royalties paid are consequently
 'stolen, converted or taken by fraud' for purposes of 2314." Id. at 214-16.
 The Court ruled that while the holder of a copyright possesses certain
 property rights which are protectible and enforceable under copyright law,
 he does not own the type of possessory interest in an item of property
 which may be "stolen, converted or taken by fraud." Id. at 216-18. Thus,
 the Court held that 2314 does not apply to interstate shipments of
 "bootleg" and "pirated" phonorecords whose unauthorized distribution
 infringes on valid copyrights. Id. at 228-29.
      Neidorf also cites UNITED STATES V. SMITH, 686 F.2d 234 (5th Cir.
 1982), to support his argument. Like DOWLING, SMITH held that copyright
 infringement is not the equivalent of theft or conversion under 2314. Id.
 at 241. The instant case, however, is distinguishable from DOWLING and
 SMITH. This case involves the transfer of confidential, proprietary
 business information, not copyrights. As DOWLING and SMITH recognized, the
 copyright holder owns only a bundle of intangible rights which can be
 infringed, but not stolen or converted. The owner of confidential,
 proprietary business information, in contrast, possesses something which
 has clearly been recognized as an item of PROPERTY. CARPENTER, 108 S.Ct. at
 320; KEANE, 852 F.2d at 205. As such, it is certainly capable of being
 misappropriated, which, according to the indictment, is exactly what
 happened to the information in Bell South's E911 text file.
      In his final gasp, Neidorf points out that in DOWLING, the Court based
 its ruling partly on the fact that Congress passed the Copyright Act to
 deal exclusively with copyright infringements. The Court reasoned that
 applying 2314 to the infringement of copyrights would result in an
 unnecessary and unwarranted intrusion into an area already governed by the
 Copyright Act. 473 U.S. at 221-26. Neidorf makes a similar argument in this
 case. He notes that Congress has enacted a statute -- the Computer Fraud
 and Abuse Act ("CFAA"), 18 U.S.C. 1030 -- which is specifically designed to
 address computer-related crimes, such as unauthorized computer access.
 Neidorf claims that the enactment of the CFAA precludes a finding that 2314
 reaches his alleged conduct in this case.
      The problem with Neidorf's argument, however, is that he does not
 cite, and this court is unable to find, anything in the legislative history
 of the CFAA which suggests that the statute was intended to be the
 exclusive law governing computer-related crimes, or that its enactment
 precludes the application of other criminal statutes to computer-related
 conduct. Therefore, the court rejects Neidorf's claim that applying 2314 to
 the instant case would undermine the Congressional intent behind the CFAA.
 Similarly, the court rejects Neidorf's bald assertion that the legislative
 history behind 2314 supports his argument. Nothing in the legislative
 history of 2314 prevents the court from finding that the information in
 Bell South's E911 text file was "stolen, converted or taken by fraud" as
 that term is used in 2314. Accordingly, Neidorf's motion to dismiss Counts
 III and IV is denied.
 C. Motion to Strike Surplusage and Prejudicial Material
      Pursuant to Rule 7(d) of the Federal Rules of Criminal Procedure,
 Neidorf moves to strike certain words and phrases from the indictment which
 he claims are unnecessary and prejudicial. He first argues that the terms
 "hackers" and "computer hackers" should be stricken because those terms are
 likely to cause confusion and prejudice. He contends that the government
 uses those terms in the indictment to lure the jury into predetermining his
 character and motives.
      The court, however, is not convinced that the government's use of the
 term "hacker" in this case is unduly prejudicial. The government has
 specifically defined "hackers" in the indictment as "individuals involved
 with the unauthorized access of computer systems by various means." This
 definition is consistent with WEBSTER'S II NEW RIVERSIDE UNIVERSITY
 DICTIONARY (1984), which defines hacker as follows: "SLANG. One who gains
 unauthorized, usu[ally] non-fraudulent access to another's computer
 system." Id. at 557. The term "hackers" has also been understood to
 encompass both those who obtain unauthorized access to computer systems and
 those who simply enjoy using computers and experimenting with their
 capabilities as "innocent" hobbyists. See Staff of the Subcomm. on
 Transportation, Aviation & Materials of the House Comm. on Science &
 Technology, 98th Cong., 2d Sess., Report on Computer & Communications
 Security & Privacy 17 (Comm. Print 1984) (citing the testimony of Donn B.
 Parker, Senior Management Systems Consultant, SRI International, Computer
 Research Institute, wherein he stated, "Computer hackers are hobbyists with
 intense interest in exploring the capabilities of computers and
 communications and causing these systems to perform to their limits. . . .
 Hackers exhibit a spectrum of behavior from benign to malicious."); see
 also C. Stoll, THE CUCKOO'S EGG, at 10 (1989) ("The word hacker has two
 very different meanings. The people I knew who called themselves hackers
 were software wizards who . . . knew all the nooks and crannies of the
 operating system. . . . But in common usage, a hacker is someone who breaks
 into computers"). However, as pointed out in THE CUCKOO'S EGG, and as is
 evident from a review of the modern articles using the term, the definition
 set forth in the indictment is the one most commonly employed.
      The court finds that the use of the term "hackers" in the indictment
 does not unduly prejudice Neidorf; it is simply a succinct method of
 describing the alleged activities of the persons with whom Neidorf was
 associated during the time period charged in the indictment. The term is
 both relevant and material, and, contrary to Neidorf's claim that it will
 cause confusion, the term is likely to be somewhat helpful to the jury in
 understanding the charges in this case. Thus, the court refuses to strike
 the term "hackers" from the indictment. See UNITED STATES V.
 CHAVERRA-CARDONA, 667 F. Supp. 609, 611 (N.D. Ill. 1987) (information
 relevant to the charges and helpful to the jury's understanding of those
 charges should not be stricken from an indictment).
      Neidorf also claims that references to the "Legion of Doom," a
 computer hacker group, should be deleted from the indictment. Neidorf,
 however, allegedly had close ties to the Legion of Doom and disseminated
 the E911 text file to some of its members. Therefore, references to the
 Legion of Doom are highly relevant to the charges in this case. Neidorf
 claims the name "Legion of Doom" "invites images of cult worshippers,
 satanism, terrorism or black magic," but this is a gross exaggeration of
 the potential effect of the term. The indictment clearly sets forth the
 purposes and activities of the group, none of which include the slightest
 reference to any type of satanism or the like. Thus, there is no reason to
 strike references to the "Legion of Doom."
      Neidorf further contends that the court should strike the following
 portions of the indictment: (1) the second sentence of paragraph 8, which
 reads: "The Lockport [computer bulletin board system] was also used by
 computer hackers as a location for exchanging and developing software tools
 for computer intrusion, and for receiving and distributing hacker tutorials
 and other information." (2) the underlined <capitalized here> words in
 paragraph 21, which reads: "It was further part of the scheme that the
 defendants Riggs and Neidorf would publish information to other computer
 HACKERS WHICH COULD BE USED TO GAIN UNAUTHORIZED ACCESS TO EMERGENCY 911
 COMPUTER SYSTEMS IN THE UNITED STATES AND THEREBY DISRUPT OR HALT 911
 SERVICE IN PORTIONS OF THE UNITED STATES." and (3) the underlined
 <capitalized here> parts of paragraph 3, which reads in part: "The E911
 Practice was a HIGHLY proprietary AND CLOSELY HELD computerized text file
 belonging to the Bell South Telephone Company and stored on the company's
 AIMSX computer in Atlanta, Georgia. The E911 Practice described the
 computerized control and maintenance of the E911 system and CARRIED WARNING
 NOTICES THAT IT WAS NOT TO BE DISCLOSED OUTSIDE BELL SOUTH OR ANY OF ITS
 SUBSIDIARIES EXCEPT UNDER WRITTEN AGREEMENT." Each of these allegations,
 however, are directly relevant to Neidorf's knowledge of the proprietary,
 confidential nature of the information in Bell South's E911 file and to
 Neidorf's motive and ability to aid in the misappropriation of that
 information. Therefore, those allegations are pertinent to the elements of
 the offenses charged and are not properly stricken. Neidorf's motion to
 strike is accordingly denied.
 D. Motion For A Santiago Hearing
      In order to offer the statements of a defendant's alleged
 co-conspirators into evidence against the defendant pursuant to Fed. R.
 Evid. 801(d)(2)(E), the government must make a preliminary showing, by a
 preponderance of the evidence, that: (1) a conspiracy existed; (2) the
 defendant and the declarant were members of the conspiracy when the
 statements were made; and (3) the statements were made during the course of
 and in furtherance of the conspiracy. BOURJAILY V. UNITED STATES, 483 U.S.
 171 (1989); UNITED STATES V. SANTIAGO, 582 F.2d 1128, 1135 (7th Cir. 1978).
 Neidorf has moved for an order requiring the government to file a statement
 setting forth its evidence in support of each of the above factors. The
 government, however, filed a SANTIAGO proffer subsequent to Neidorf's
 motion. Therefore, Neidorf's motion for a SANTIAGO proffer is denied as
 moot. Moreover, after reviewing the government's case as detailed in its
 proffer, the court finds that the government has set forth sufficient
 evidence to support a preliminary finding of the admissibility of the
 statements of Neidorf's alleged co-conspirators. Therefore, this court will
 conditionally admit those statements, offered pursuant to Rule
 801(d)(2)(E), subject to proof by a preponderance of the evidence at trial
 that the SANTIAGO factors are satisfied.
 E. Motion For Discovery and Disclosure
      In this motion, Neidorf asks the court to issue an order requiring the
 government to comply with seven specific discovery requests, which Neidorf
 labels A-G. In large part, Neidorf's motion is moot. The government
 responds that it has already complied with each of Neidorf's requests, or
 will soon turn over the information sought, with only one exception -- the
 government objects to request "F." In that request, Neidorf seeks evidence
 of specific instances of misconduct which the government plans to offer for
 impeachment purposes.
      The court finds that the government's refusal to comply with request
 "F" is justified, since the government has no obligation to turn over the
 impeachment evidence sought in that request. See UNITED STATES V. BRAXTON,
 877 F.2d 556, 560 (7th Cir. 1989). Accordingly, Neidorf's motion for
 discovery and disclosure is denied.
 F. Motion For Immediate Disclosure of Favorable Evidence
      Pursuant to BRADY V. MARYLAND, 373 U.S. 83 (1963), and GIGLIO V.
 UNITED STATES, 405 U.S. 150 (1972), Neidorf moves for an order requiring
 the government to disclose all evidence of which the government is aware
 that is favorable to him. Neidorf has made specific BRADY and GIGLIO
 requests, which he has numbered 1-11.
      The government responds that it has complied and will continue to
 comply with its obligation to turn over exculpatory evidence pursuant to
 BRADY. However, the government has objected to Neidorf's Request No. 1,
 which seeks any information the government has regarding "any person whose
 testimony would be favorable to defendant in any way." The court agrees
 with the government that this request is too overbroad to fall within the
 scope of BRADY. See UNITED STATES V. ROBINSON, 585 P.2d 274, 281 (7th Cir.
 1978), CERT. DENIED, 441 U.S. 947 (1979). Therefore, the government's
 objection to that request is valid.
      Neidorf acknowledges that the remainder of his requests seek material
 pursuant to GIGLIO. In Request No. 2, Neidorf seeks the statements of
 individuals which would contradict the testimony of any government
 witnesses, regardless of whether the government intends to call the
 individuals as witnesses. To the extent such information is not within the
 scope of BRADY, however, it is not discoverable. See UNITED STATES V.
 MARQUEZ, 686 F.Supp. 1354, 1358 (N.D. Ill. 1988); see also UNITED STATES V.
 COLE, 453 F.2d 902, 904 (8th Cir.), CERT. DENIED, 406 U.S. 922 (1972).
 Therefore, the government's objection to Request No. 2 is justified.
      In Request No. 3, Neidorf seeks immediate disclosure of any
 documentary evidence which contradicts or is inconsistent with the expected
 testimony of any government witness. The government has objected to this
 request only to the extent that it demands such information immediately.
 This objection is clearly reasonable, since there is no requirement that
 GIGLIO material be produced well in advance of trial. See UNITED STATES V.
 WILLIAMS, 738 F.2d 172, 178 (7th Cir. 1984).
      Requests Nos. 4 and 5 seek "the name, address, and statement . . . of
 any individual who has been interviewed by the government who had knowledge
 of the activity alleged in the indictment" and "any and all books, papers,
 records, or documents which contain evidence favorable to defendant."
 Request 11 seeks "any illegal or unauthorized activity engaged in by
 government agents in connection with this indictment or related activity."
 The court agrees with the government that these requests are too vague and
 overbroad to fall within BRADY or GIGLIO. See ROBINSON, 585 F.2d at 281.
      Finally, the government objects to Requests 6-10 only to the extent
 that Neidorf seeks the material set forth in those requests immediately. As
 noted above, nothing requires the government to turn over GIGLIO evidence
 well in advance of trial. Accordingly, Neidorf's motion for immediate
 disclosure of favorable evidence is denied.
 G. Motion For Pretrial Production of Jencks Material
      Neidorf's final motion requests the court to order the government to
 produce material pursuant to the Jencks Act, 18 U.S.C. 3500, thirty or
 sixty days prior to trial. ECuriously, the first sentence of Neidorf's
 motion asks for production thirty days prior to trial, while the last
 sentence of the motion asks for production sixty days prior to trial.L By
 its express terms, the Jencks Act generally does not provide the defendant
 with an opportunity to obtain the statements of a government witness until
 after the witness has testified on direct examination. 18 U.S.C. 3500(a).
 Neidorf, however, claims that he will not be able to adequately use the
 Jencks material unless it is provided to him in advance of trial.
 Therefore, he maintains that pretrial production of the Jencks material is
 required in order to afford him his rights to due process of law and to
 effective assistance of counsel.
      In some cases, courts have held that pretrial production of Jencks
 materials is required in order to avoid long delays during trial and to
 provide the defendant with ample opportunity to review the material and
 make appropriate use of it. See, e.g., UNITED STATES V. HOLMES, 722 F.2d
 37, 40-41 (4th Cir. 1983); UNITED STATES V. NARCISCO, 446 F.Supp. 252, 271
 (E.D. Mich. 1976). Those cases, however, are rare. They generally involve
 an overwhelming volume of Jencks material of a particularly complex nature.
 There is no indication that this case involves that type of complexity or
 volume. The court will assure that Neidorf's counsel has sufficient
 opportunity to review the Jencks material to be able to make substantive
 use of it, and the court is confident that providing Neidorf's counsel with
 that opportunity will not produce inordinate delays during trial.
 Therefore, Neidorf's constitutional rights to due process and effective
 assistance of counsel will not be implicated by the government's production
 of Jencks material at trial. Neidorf's motion for early production of that
 material is accordingly denied.
            CONCLUSION
      For the foregoing reasons, Neidorf's pretrial motions are denied,
 except for his motion to dismiss Counts V-VII and his motion for a bill of
 particulars, which are held in abeyance pending the filing of the
 superseding indictment.
      IT IS SO ORDERED.

                  ___________________________________
                  Nicholas J. Bua
                  Judge, United States District Court

 Dated: June 5, 1990

Topic  60:  2600 Magazine Reports on Secret Service Hacker Raids of 1990
#213: Tom Mandel (mandel)      Sun, Jun 17, '90  (08:48)       2 lines


 It does sound like Neidorf may need a better lawyer.

Topic  60:  2600 Magazine Reports on Secret Service Hacker Raids of 1990
#214: Leo L. Schwab (ewhac)      Sun, Jun 17, '90  (12:45)       5 lines

   Agreed.


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