                                ==Phrack Inc.==

                    Volume Three, Issue 30, File #12 of 12

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U.S. Inquiry Into Theft From Apple                            November 19, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
by John Markoff (New York Times)

A former Apple Computer Inc. engineer has said he was served with a grand jury
subpeona and told by an FBI agent that he is a suspect in a theft of software
used by the company to design its Macintosh computer.

In June a group identifying itself as the Nu Prometheus League mailed copies of
computer disks containing the software to several trade magazines and software
developers.

Grady Ward, age 38, who worked for Apple until January (1989), said that he
received the subpeona from an FBI agent, who identified himself as Steven E.
Cook.

Ward said the agent told him that he was one of five suspects drawn from a
computerized list of people who had access to the material.  The agent said the
five were considered the most likely to have taken the software.

A spokesman for the FBI in San Francisco said the agency would not comment on a
continuing investigation.

Ward said he had told the FBI he was innocent but would cooperate with the
investigation.

The theft of Apple's software has drawn a great deal of attention in Silicon
Valley, where technology and trade-secret cases have highlighted the crucial
role of skilled technical workers and the degree to which corporations depend
on their talents.

The case is unusual because the theft was apparently undertaken for
philosophical reasons and not for personal profit.

There is no indication of how many copies of the program were sent by Nu
Prometheus.

Software experts have said the programs would be useful to a company trying to
copy the distinctive appearance of the Macintosh display, but it would not
solve legal problems inherent in attempting to sell such a computer.  Apple has
successfully prevented many imitators from selling copies of its Apple II and
Macintosh computers.

The disks were accompanied by a letter that said in part:  "Our objective at
Apple is to distribute everything that prevents other manufacturers from
creating legal copies of the Macintosh.  As an organization, the Nu Prometheus
League has no ambition beyond seeing the genius of a few Apple employees
benefit the entire world."

The group said it had taken its name from the Greek god who stole fire from the
gods and gave it to man.

The letter said the action was partially in response to Apple's pending suit
against Microsoft Corp. and Hewlett-Packard Co., accusing them of copying the
"look and feel" -- the screen appearance -- of the Macintosh.

Many technology experts in Silicon Valley believe Apple does not have special
rights to its Macintosh technology because most of the features of the computer
are copied from research originally done at Xerox Corp.'s Palo Alto Research
Center during the 1970s.  The Macintosh was not introduced until 1984.

The theft came to light in June after Macweek, a trade magazine, published the
letter from Nu Prometheus.

At the time the theft was reported, executives at Apple, based in Cupertino,
California, said they took the incident seriously.

A spokeswoman said that Apple would not comment on details of the
investigation.

Ward said he had been told by the FBI agent that the agency believed Toshiba
Corp. had obtained a copy of the software and that copies of the program had
reached the Soviet Union.

The software is not restricted from export to the Communist bloc.  Its main
value is commercial as an aid in copying Apple's technology.

Ward said the FBI agent would not tell him how it believed Toshiba had obtained
a copy of the software.

Ward also said the FBI agent told him that a computer programmer had taken a
copy of the software to the Soviet Union.

Ward said the FBI agent told him he was considered a suspect because he was a
"computer hacker," had gone to a liberal college and had studied briefly at the
Massachusetts Institute of Technology's Artificial Intelligence Laboratory.

The term "hacker" was first used at MIT to describe young programmers and
hardware designers who mastered the first interactive computers in the 1960s.

Ward is the second person to be interviewed by the FBI in the investigation of
the theft.

Earlier Charles Farnham, a businessman in San Jose, California, said two FBI
agents came to his office, but identified themselves as reporters for United
Press International.

Farnham, a Macintosh enthusiast, has disclosed information about unannounced
Apple products, said that after asking him to come outside his office, the men
said they were FBI agents and proceeded to question him about Nu Prometheus
group.  He said he was not told that he was a suspect in the case.

UPI has complained to the FBI because of the incident.

Ward said he had joined Apple in 1979 and left last January to start his own
company, Illumind.  He sells computerized dictionaries used as spelling
checkers and pronunciation guides.

He said the FBI told him that one person who had been mailed a copy of the
Apple software was Mitchell Kapor, founder of Lotus Development Corporation.

Kapor returned his copy of the disk unopened, Ward said the agent told him.

Ward said the FBI had also said he was suspect because he had founded a group
for the gifted known as Cincinnatus, which the agent said had roots in Greek
mythology that were similar to the Nu Prometheus group.

Ward said the FBI was mistaken, and Cincinnatus is a reference from ancient
Roman history, not Greek mythology.
_______________________________________________________________________________

Data-Destroying Disc Sent To European Computer Users          December 13, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
by John Markoff (New York Times)

A computer disk containing a destructive program known as a Trojan horse has
been mailed to computer users in at least four European countries.

It was not clear if any copies of the program had been mailed to people in the
United States.

The program, which threatens to destroy data unless a user pays a license fee
to a fictitious company in Panama City, Panama, may be a widespread attempt to
vandalize thousands of personal computers, several computer experts who have
studied the program said Tuesday, December 12.

Some computer experts said the disk was mailed by a "PC Cyborg" company to
subscribers of personal computer trade magazines, apparently using mailing
lists.

The disk is professionally packaged and accompanied by a brochure that
describes it as an "Aids Information Disk," the computer experts said.  But
when it is installed in the user's computer it changes several files and hides
secret programs that later destroy data on the computer disk.

Paul Holbrook, a spokesman for the Computer Emergency Response Team, a U.S.
government-financed security organization in Pittsburgh, said his group had
confirmed the existence of the program, but did not know how widely it had
spread.

Trojan horses are programs hidden in software that secretly insert themselves
in a computer when the software masking them is activated.  They are different
from other secret programs like viruses and worms because they are not
infectious:  They do not automatically copy themselves.

A licensing agreement that accompanies the disk contains threatening
information.

It reads in part:  "In case of your breach of this license, PC Cyborg reserves
the right to take any legal action necessary to recover any outstanding debts
payable to the PC Cyborg Corporation and to use program mechanisms to ensure
termination of your use of these programs.  The mechanisms will adversely
affect other programs on your microcomputer."

When it destroys data, the program places a message on the screen that asks
users to send $387 to a Panama City address.

John McAfee, a computer security consultant in Santa Clara, California, said
the program had been mailed to people in England, West Germany, France and
Italy.
_______________________________________________________________________________

The Executive Computer:  From Espionage To Using A Printer     October 27, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
by Peter H. Lewis (New York Times)

Those executives who pay attention to computers are more likely to worry about
grand issues like productivity and small ones like how to make their personal
printers handle envelopes than whether the KGB has penetrated their companies.
In a fresh crop of books, they will find lessons on all these matters.

Perhaps the most entertaining of the new books is "The Cuckoo's Egg" ($19.95,
Doubleday), by Dr. Clifford Stoll, an astronomer.

Because he was the rookie in the Lawrence Berkeley Laboratories in California,
he was asked to track down and fix a glitch in the lab's accounting software,
which had found a 75-cent discrepancy when it tried to balance the books.

"First-degree robbery, huh?" was Stoll's first reaction.  But by the time he
was done nearly a year later, he had uncovered a West German spy ring that had
cracked the security of American military and research computer networks,
gathering information that it sold to Moscow.

Beyond the entertainment value of this cat-and-mouse hunt, the book has lessons
for any corporate computer user.  The message is clear:  Most companies are
irresponsible about security.

The ease with which the "hacker" penetrated even military installations was
astonishing, but not as astonishing as the lack of concern by many of the
victims.

"The Cuckoo's Egg" follows the hunt for the unknown intruder, who steals
without taking and threatens lives without touching, using only a computer
keyboard and the telephone system.

The detective is an eccentric who sleeps under his desk, prefers bicycles to
cars, and suddenly finds himself working with the Federal Bureau of
Investigation, the Central Intelligence Agency and the National Security
Agency.

Although the criminal and the hunter deal in the esoteric realm of computer
code and data encryption, Stoll makes the technology accessible.

He also discovers that navigating the global electronic grid is less difficult
than navigating the bureaucracies of various government agencies.

And while he was a whiz at tracing the cuckoo's electronic tracks from Berkeley
to Okinawa to Hannover, West Germany, Stoll reveals himself to be helplessly
lost on streets and highways and befuddled by such appliances as a microwave
oven.

Besides the more than 30 academic, military and private government
installations that were easy prey for the spies, the victims included Unisys,
TRW, SRI International, the Mitre Corporation and Bolt Beranek & Newman Inc. --
some of the very companies that design, build and test computer systems for the
government.

"No doubt about it, the shoemaker's kids are running around barefoot," Stoll
writes.

One leading character in the book is Dr. Bob Morris, chief scientist for the
National Security Agency and the inventor of the security for the Unix
operating system.

An epilogue to the book, dealing with an unrelated computer crime, recounts the
discovery that it was Morris's son who wrote the rogue program that shut down a
national network for several days last year.

In "The Macintosh Way" ($19.95, Scott, Foresman & Co.), Guy Kawasaki, a former
Apple Computer Inc. executive who is now president of a software company, has
written a candid guide about management at high-technology companies.

Although his book is intended for those who make and market computer goods, it
could prove helpful to anyone who manages a business.
_______________________________________________________________________________

Dialing Away U.S. Area Codes                                  November 13, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
by Laure O'Brien (Telephony Magazine)

The current endangered species in the news may not be an animal at all.  The
number of available area codes in the United States is dwindling rapidly.
Chicago consumed a new code on November 11, 1989 and and New Jersey will gobble
up another one on January 1, 1990.

There are only nine codes left, and they are expected to be used up by 1995,
said Robert McAlesse, North American Numbering Plan administrator and member of
Bellcore's technical staff.

"In 1947 (Bellcore) started with 86 codes, and they projected exhaustion in 100
to 150 years.  They were off by a few years," McAlesse said.

When the 152 available codes are exhausted, Bellcore will use a new plan for
creating area codes.

A total of 138 codes already are assigned.  Five of the remaining 14 codes are
reserved for service access codes, and 9 are for geographic area codes.

Under the current plan, a 0 or a 1 is used as the second digit while the first
and last digits can range between 2 and 9.  Under the new plan the first digit
will be between 2 and 9 and the following two digits will be numbers between 0
and 9, McAlesse said.

The new plan will create 640 potential area codes, he said.  Bellcore isn't
predicting when the newly created codes will run out.

"The growth in new services and increase in the number of telephones are
exhausting the codes.  The biggest increases are cellular telephones, pagers,
facsimile machines and new services that can have more than one number,"
McAlesse said.

The current unassigned codes include 210, 310, 410, 706, 810, 905, 909, 910 and
917.  The Chicago area took the 708 code, and New Jersey will take 908.

In the Chicago metropolitan area, the suburbs were switched from the 312 area
code to the new 708 code.  Residents and businesses within the city limits
retained the 312 code.

Illinois Bell started preparing for the change two years ago with the
announcements alerting business customers to change stationary and business
cards, said Gloria Pope, an Illinois Bell spokeswoman.  Now the telco is
targeting the residential market with billboard reminders and billing inserts.

The cost of technically preparing for the new code, including labor, is
expected to reach $15 million.  But Pope said that does not include mailings,
public relations efforts and business packages designed to smooth out the
transition.  The telco will absorb the cost with budgeted funds, and no rate
increase is expected, she said.

Modifying the network to recognize the new code started about six months ago
with translation work.  Every central office in the Chicago Metropolitan area
was adapted with a new foreign-area translator to accept the new code and route
the calls correctly, said Audrey Brooks, area manager-Chicago translations.

The long distance carriers were ready for the code's debut.  AT&T, US Sprint
and MCI changed their computer systems to recognize the new code before the
Chicago deadline.

"We are anticipating a pretty smooth transfer," said Karen Rayl, U.S. Sprint
spokeswoman.

Businesses will need to adjust their PBX software, according to AT&T technical
specialist Craig Hoopman.  "This could affect virtually every nationwide PBX,"
he said.  Modern PBX's will take about 15 minutes to adjust while older
switches could take four hours.  In many cases, customers can make the changes
themselves, he said.
_______________________________________________________________________________

A New Coating Thwarts Chip Pirates                             November 7, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
by John Markoff (New York Times)

Several years ago, clever high-technology pirates removed a chip from a
satellite-television descrambling device made by General Instrument
Corporation, electronically siphoned out hidden decryption software and studied
it to figure out a way to receive clear TV signals.

When the company later tried to protect the chips by coating them with epoxy,
the pirates simply developed a solvent to remove the protective seal, and stole
the software again.

Now government researchers at Lawrence Livermore National Laboratory, a weapons
and energy research center in Livermore, California, have developed a special
coating that protects the chip from attempts to pry out either the chip design
or the information it contains.  In the semiconductor industry, a competitor's
chip design can be copied through a process called reverse engineering, which
might include determining the design through an electron microscope or by
dissolving successive layers of the chip with a solvent.

Already a number of government military and intelligence agencies are using the
coating to protect circuits containing secure information.  The government has
qualified 13 U.S. chip makers to apply the coating to chips used by certain
government agencies.

The Lawrence Livermore research, known as the Connoisseur Project, has
developed a resin about the consistency of peanut butter that is injected into
the cavity surrounding the chip after it has been manufactured.  The coating is
heated and cured; The chip is then sealed with a protective lid.

The special protective resin is opaque and resists solvents, heat, grinding and
other techniques that have been developed for reverse engineering.

A second-generation coating is being developed that will automatically destroy
the chip when an attempt is made chemically to break through the protective
layer.

Another project at the laboratory is exploring even more advanced protection
methods that will insert ultra-thin screens between the layers of a chip,
making it harder to be penetrated.
______________________________________________________________________________

U.S. Firm Gets Hungarian Telephone Contract                    December 5, 1989
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Taken from the St. Louis Post-Dispatch (via New York Times News Service)

U.S. West Inc., one of the seven regional Bell telephone companies, announced
that it had signed an agreement with Hungary to build a mobile cellular
telephone system in Budapest.

The Hungarian cellular system will be the first such telephone network in
Eastern Europe.

Because of the shortage of telephones in their country, Hungarians are expected
to use cellular telephones for basic home service, as well as mobile
communications.

For Hungary and the other Eastern European countries that have antiquated
telephone systems, it will be faster and cheaper for the Government to deliver
telephone service by cellular networks than it would be to rebuild the nation's
entire telephone apparatus.

A cellular telephone network transmits calls on radio waves to small receiving
antennas, called "cell" sites, that relay calls to local phone systems.  The
system to be built in Hungary will transmit calls from cellular phone to
cellular phone and through the existing land-based telephone network.

The system, which is scheduled to begin operation in the first quarter of 1991,
will initially provide cellular communications to Budapest's 2.1 million
residents.  Eventually, the system will serve all of Hungary, a nation of 10.6
million.

Hungary has 6.8 telephone lines for every 100 people, according to The World's
Telephones, a statistical compilation produced by AT&T.  By comparison, the US
has 48.1 lines for every 100 people.
_____________________________________________________________________________

1.  Phone Fun (November/December) -- Some students at Columbia University in
    New York City have added a twist to that ancient annoyance, the chain
    letter.  The students have taken advantage of the school's newly installed,
    $15 million IBM/Rolm phone system's ability not only to store messages like
    an answering machine, but also to take and receive messages and send them
    -- with comments -- to a third party.

    Last spring, brothers Anil and Ajay Dubey, both seniors, recorded a parody
    of rapper Tone Loc's Top 10 single "Funky Cold Medina" and sent it to some
    buddies.  Their friends then passed the recording along with comments, to
    some other pals, who passed it on to other friends...  and so on, and so
    on, and so on.  Eventually, the message ran more than ten minutes and
    proved so popular that the phone mail system became overloaded and was
    forced to shut down.
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2.  Get a "Sprint" VISA Card Today (November 14, 1989) -- U.S. Sprint will
    begin mailing in December, a a Sprint VISA card, which will combine the
    functionality of a long distance calling card, a credit card and an ATM
    card.  Sprint will market the card which will be issued by State Street
    Bank and Trust, in Boston.

    Business travelers will receive a single bill that list all their travel
    related expenses:  Hotel, meals and phone calls.  While payment for the
    phone charges will be done through the regular Visa bill, call detail
    reports will appear on Sprint's standard FONcard bill.  Taken from
    Communications Week.
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3.  The Harpers Forum -- Harpers Magazine came up with an idea for how to
    gather information about the phreak/hack modem community.  They set up shop
    on The Well (a public access Unix and bulletin board) and invited any and
    all hackers to join in their multiple discussion subboards.

    The hackers involved were Acid Phreak, Bernie S., Cap'n Crunch, Cheshire
    Catalyst, Emmanuel Goldstein, Knight Lightning, Michael Synergy (of Reality
    Hackers Magazine), Phiber Optik, Piper, Sir Francis Drake, Taran King, and
    many old TAP subscribers.

    The Well is accessible through CompuServe's data network.  All charges for
    using The Well by hackers were absorbed by Harpers.

    There were many people on The Well posing as hackers to try and add to the
    discussion, but it turns out that some of them like Adel Aide, were shoe
    salesmen.  There were also a few security types, including Clifford Stoll
    (author of The Cuckoo's Egg), and a reporter or two like Katie Hafner (who
    writes a lot for Business Week).

    The contents of the discussion and all related materials will be used in an
    article in an upcoming issue of Harpers Magazine.
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4.  Phrozen Ghost has supposedly been arrested for crimes relating to hacking,
    telecommunications fraud, and drugs.  No other details are known at this
    time.  Information sent to PWN by Captain Crook.
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5.  SurveillanceCon '89 -- Tuc, Susan Thunder, and Prime Suspect all attended a
    Security/Surveillance Convention in Washington DC recently at which both
    Tuc and Susan Thunder gave presentations about computer security.  Tuc's
    presentation dealt largely with bulletin boards like Ripco in Chicago and
    newsletters like Phrack Inc.  Audio cassettes from all the speakers at this
    convention are available for $9.00 each, however we at PWN have no
    information about who to contact to purchase these recordings.
_______________________________________________________________________________

