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List:       isn
Subject:    [ISN] Russian economic crisis leads computer experts to piracy & hacking.
From:       mea culpa <jericho () dimensional ! com>
Date:       1998-12-28 23:12:00
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Forwarded From: William Knowles <erehwon@kizmiaz.dis.org>

MOSCOW (December 27, 1998 9:17 p.m. EST http://www.nandotimes.com) - They
are skilled, intelligent and sit quietly in front of a computer screen for
hours or even days on end. But security systems companies say Russia's
economic crisis could soon turn these unassuming information technology
experts into a threat to any firm in the world that uses a computer
system. 
 
Growing redundancies and low salaries mean they could soon follow the path
taken by many before them into Russia's flourishing world of hacking,
software theft and piracy. 
 
"Some time ago we lived through times when programmers were receiving
large amounts of money for their work," said Mikhail Salnikov, chief
editor of Compulog magazine. 
 
"It's hard these days to find honest work which pays money...Think of poor
people in (the central city of) Tula, students who have no prospects, then
you can understand why (they turn to hacking and software piracy)." 

Aladdin Software Security, the Russian branch of Aladdin Knowledge Systems
Ltd, said in a promotional brochure that the problem looked set to grow. 
 
"By the end of this year only 50 percent of Russian software companies
will survive. What will the qualified personnel who have been thrown onto
the streets do?" it asked. 

"It's clear that they are not going to start trading Pampers (disposable
nappies)." 

Aladdin said most will turn to software theft and piracy. 

PIRATES CAN MAKE MORE MONEY

A growing number of hackers have found a lucrative market for their wares
in Russia as licensed software sales have been hit by the economic crisis,
which has led to a ruble devaluation, job losses and inflation. 

People simply cannot afford to buy licensed software, according to experts
who discussed hacking and piracy at a recent meeting in Moscow. 

"They have put hacking on an industrial track," Sergei Gruzdev, director
of Aladdin Software Security said, adding that huge amounts of money could
be made from software piracy. 

Counterfeiters sell bogus software on the street and some personal
computer sellers pre-install unauthorized software on the hard drive,
leaving buyers to presume they have the genuine article. 

Gruzdev said the number of Russian Web sites offering cracked software and
hacking tools had risen this year. 

Only three sites offering pirate software existed last year. During the
last six months Aladdin had helped Internet providers find and close 15
sites run by pirates and crackers, he said. 

In Russia around 89 percent of all software used is pirated. 

BIGGER BUCKS CAN BE MADE

A greater fear gripping the computer world is that Russia's computer
specialists could turn to more sinister crimes to reap more profitable
rewards, experts said. 

Gruzdev grouped hackers into three categories: crackers who want to see if
they can get into programs, hooligans who leave viruses on programs and
the most dangerous group who want to find and use confidential information
and maybe commit fraud. 

Vladimir Levin, a computer expert from Russia's second city of St. 
Petersburg, used his skills for ill-gotten gains. 

He was caught stealing from Citigroup's Citibank in a fraud scheme and
said he used Citibank customer passwords and codes to transfer funds from
their accounts to others he controlled in Finland, the Netherlands,
Germany, Israel and the United States. 

The total transfers exceeded $3.7 million but Levin and his
co-conspirators were able to withdraw only $240,015 before they were
caught. 

He was sentenced to 36 months in prison and ordered to pay back the
$240,015 he admitted stealing. 

His case is not an isolated incident. 

A Moscow court recently handed hacker Pavel Sheyko one of the longest
sentences given to a super highway fraudster after finding him guilty of
bank swindling "on a particularly large scale." 

Sheyko received a five-year suspended sentence, but most computer experts
agree that computer crimes should be punished more severely. 

"The court did the right thing, hackers have to know that their gift
cannot be used in the criminal world," Salnikov said, adding that Sheyko
had been treated lightly. 

HACKERS ARE NOT ALL BAD

Some computer experts say, however, that hackers are not all bad, and that
they are more akin to artists than criminals. 

"There's been a huge furor in connection with hackers penetrating bank
systems, defense systems and the computer systems of big corporations,"
Salnikov said. 

"But in my opinion you cannot think all locksmen are criminals because it
is so easy for them to open a safe." 
 
Andrei Sebrant, marketing director of Russia Internet service provider
Glasnet, said most hackers crack into companies' files and programs to
increase their computer knowledge. 

"Hackers are like guys on Harley Davidsons cruising down free street," 
Sebrant said. 

But in these crisis ridden days the temptation is to profit from their
knowledge has become greater. 

"The threat is bigger than the positive side of hacking," warned Gruzdev.
"A kind hacker, like the ones you have been talking about, can soon turn
bad." 


-o-
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