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Los Angeles man pleads guilty in spyware ID theft case
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08:46, April 17, 2008

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A Los Angeles man Wednesday pleaded guilty to using spyware that turned thousands of computers across the United States into "zombies" so he could steal their owners' identities.

John Schiefer, 26, admitted using "botnets," or armies of infected computers, to steal the identities of victims throughout the country by extracting information from their personal computers and wiretapping their communications, according to the U.S. Attorney's Office.

A former computer security consultant, Schiefer was a well-known member of the "botnet underground" and his case is the first prosecution of its kind in the United States, prosecutors said.

Schiefer pleaded guilty to accessing protected computers to conduct fraud, disclosing illegally intercepted electronic communications, wire fraud and bank fraud. He is scheduled to be sentenced in August and faces as much as 60 years in prison and fine of 1.75 million dollars.

Prosecutors said Schiefer and his associates developed and distributed a malicious computer code to vulnerable computers, then used the code to assemble armies of up to 250,000 infected computers, which they used to engage in a variety of identity theft schemes.

The victims, who were unaware their computers had been turned into "zombies," continued to use their computers to engage in commercial activities, which were intercepted by Schiefer through software for stealing PayPal usernames and passwords.

This is the first time someone in the United States has been charged under the federal wiretap statute for conduct related to botnets, prosecutors said.

"While computer criminals have many technological resources at their disposal, we have our own technology experts, as well as a host of legal remedies to punish those who exploit the Internet for nefarious purposes," U.S. Attorney Thomas O'Brien said in a statement.

Schiefer allegedly signed up as a consultant with a Dutch internet advertising company in order to defraud it with his botnets. He promised to install the company's programs on computers only when the owners gave consent.

But instead, Schiefer and his associates installed that program on about 150,000 computers that were infected with their malware.


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