Chapter 10: The Criminal Face of the Internet Age

By Ira Winkler

May 4, 2005 12:00 PM ET

Computerworld - This excerpt from Chapter 10 of Spies Among Us is reprinted with the permission of Wiley Publishing, copyright 2005.
I considered dozens of cases for inclusion in this book. The cases described up to this point demonstrate some compromise of computer systems, but only as part of a more coordinated attack that represents the most costly kind. Although attacks that focus on computer hacking via the Internet are clearly the most numerous, they are not the most devastating. However, there are such cases that do result in large losses and demonstrate great technical expertise.
Back in the late 1990s, news stories started reporting that banks were being extorted by computer hackers. The stories described how criminals would contact banks and provide them proof that they had administrator access to their system. The criminals then demanded money for not disclosing the attacks and for not creating damage to the systems in the future. In the new millennium, more e-commerce sites came online, and the attacks started targeting these new sites that popped up out of nowhere and thought little about security.
So, when it came time to choose a case of a computer-based attack, I wanted one that demonstrated both clear criminal activity and as many aspects of computer crime as possible. The fact that the case covered here also included the hacking of banks and the indictment of an FBI undercover agent made it all the better.
I tracked down Alexey Ivanov, who together with his partner, Vasily Gorshkov, extorted tens of thousands of dollars, if not more, from companies processing financial transactions throughout the United States. They had at least 56,000 credit card numbers in their possession at the time of their arrest. The judge determined that they caused more than $25,000,000 in damage to organizations that included at least one bank, eBay, Amazon.com, PayPal, and a wide variety of Internet service providers (ISP) and credit card processors. Alexey accomplished a great deal in his life for a 20-year-old from Russia.
The Making of a Criminal
Alexey grew up in Chelyabinsk, Russia, which has the reputation of being one of the most polluted cities in the world. This industrial city has a population of about 1.2 million people. Alexey began playing with computers in 1993 at the age of 13. I had to admit that I was taken aback when he said that he was most interested in computer viruses because of their ability to take on a life of their own. Although he said he wrote viruses as

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