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Three Former US Intelligence Community and Military Personnel Agree to Pay Over $ 1.68 Million to Solve Criminal Charges Arising from Providing Hack-Related Services to Foreign Government | Takeover bid




On September 7, US citizens Marc Baier, 49, and Ryan Adams, 34, and former US citizen Daniel Gericke, 40, all former employees of the US Intelligence Community (USIC) or the US Army, entered into a Deferred Prosecution Agreement (DPA) that restricts their future operations and employment and requires the payment of $ 1,685,000 in penalties to resolve a Department of Justice investigation into violations of US laws on export controls, computer fraud and access device fraud. The department filed the DPA today, along with a criminal brief alleging that the defendants conspired to violate these laws.

According to court documents, the defendants worked as senior executives at a United Arab Emirates (UAE) -based company (UAE CO) that supported and conducted computer network operations (CNE) operations (i.e. say hacking) for the benefit of the UAE government. between 2016 and 2019. Although they were informed on several occasions that their work for UAE CO, under the International Traffic in Arms Regulations (ITAR), constituted a defense service requiring a license from the Directorate of Traffic Control. Defense Trade of State Departments (DDTC), the defendants began to provide such services without a license.

These services included the provision of support, direction and supervision in the creation of sophisticated systems for hacking and clickless intelligence gathering, that is, that could compromise a device without any target action. UAE CO employees whose activities were supervised by and known to the defendants subsequently exploited these clickless exploits to illegally obtain and use credentials to access online accounts issued by US companies, and to gain unauthorized access. licensed to computers, such as cell phones, worldwide. , including in the United States.

This agreement is the first of its kind to resolve an investigation into two distinct types of criminal activity: the provision of unauthorized export-controlled defense services in support of the operation of computer networks, and a commercial company creating , supporting and operating systems specifically designed to allow others to gain unauthorized access to data from computers around the world, including the United States, said Acting Deputy Attorney General Mark J Lesko for the National Security Division of the Ministry of Justice. Hackers and those who otherwise support such activities in violation of US law should fully expect to be prosecuted for their criminal conduct.

If unregulated, the proliferation of offensive cyber capabilities undermines privacy and security around the world. Under our international arms trafficking regulations, the United States will ensure that U.S. nationals only provide defense services in support of these capabilities in accordance with appropriate licensing and oversight, the prosecutor said. Acting American Channing D. Phillips of the District of Columbia. A status of an American person as a former employee of the United States government certainly does not give them a free pass in this regard.

The FBI will thoroughly investigate individuals and businesses who profit from illegal criminal cyber activity, said Deputy Director Bryan Vorndran of the Cyber ​​Division of the FBI. This is a clear message to anyone, including former U.S. government employees, who had considered using cyberspace to mine export-controlled information for the benefit of a foreign government or an organization. foreign trading company. There is a risk, and there will be consequences.

Today’s announcement highlights the illegal activities of three former members of the intelligence community and the United States military, said deputy director in charge Steven M. DAntuono of the FBI’s Washington field office. These individuals have chosen to ignore the warnings and use their years of experience to support and enhance the offensive cyber operations of a foreign government. These charges and the associated sanctions make it clear that the FBI will continue to investigate these violations.

Applicable conduct of defendants

After leaving US government employment, Baier, Adams, and Gericke worked for a US company (US Company One) that provided e-services to a UAE government agency in accordance with ITAR under an assistance agreement. technical document (TAA) issued by the DDTC and signed by the United States. Company One, the government of the United Arab Emirates and its relevant intelligence agency. US Company Ones TAA specifically required parties to comply with US export control laws; obtain the prior approval of a US government agency before disclosing information regarding cryptographic analysis and / or the operation or attack of a computer network, and; do not target or exploit any person from the United States (i.e., US citizens, permanent resident aliens, or US companies or entities, or other persons in the United States). . . While employed by US Company One, the defendants received recurrent ITAR and TAA training.

In January 2016, after receiving an offer for higher compensation and an expanded budget, the defendants joined UAE CO as senior managers of a team known as Cyber ​​Intelligence-Operations (CIO). Prior to their departure, US Company One repeatedly informed its employees, including the defendants, that the services they provided constituted defense services under ITAR, and that US nationals could not legally provide such services. services to UAE CO without obtaining a separate TAA. After joining UAE CO, the defendants requested continued access to US Company Ones’ ITAR-controlled information, including from US Company One employees, in violation of the TAA and ITAR.

Between January 2016 and November 2019, the defendants and other employees of the UAE CIO CO expanded the scope and sophistication of CNE operations that the IOC provided to the UAE government. For example, over an 18-month period, CIO employees, with the support, direction and supervision of the defendants, created two similar hacking and click-less intelligence systems that operated servers in the United States. owned by an American technology company (US Company Two) to gain unauthorized remote access to one of the tens of millions of smartphones and mobile devices using an operating system provided by US Company Two. The defendants and other IOC employees colloquially referred to these two systems as KARMA and KARMA 2.

CIO employees whose activities were supervised by and / or known to the defendants used KARMA systems to obtain, without authorization, the login credentials of targeted individuals and other authentication tokens (i.e. unique digital codes issued to authorized users) issued by U.S. companies, including email vendors, cloud storage providers, and social media companies. CIO employees then used these access devices to, again without authorization, log into target accounts to steal data, including from servers in the United States.

US Company Two updated the operating system of its smartphones and other mobile devices in September 2016, reducing the usefulness of KARMA. As a result, CIO created KARMA 2, which relied on a different feat. In the summer of 2017, the FBI informed the American company Two that its devices were vulnerable to the exploit used by KARMA 2. In August 2017, the American company Two updated the operating system of its smartphones and others. mobile devices, limiting the functionality of KARMA 2. However, KARMA and KARMA 2 remained effective against the two American company’s devices that used older versions of its operating system.

DPA conditions

Under the DPA, Baier, Adams and Gericke agreed to pay $ 750,000, $ 600,000 and $ 335,000, respectively, over a three-year period, an amount they cannot repay without the express approval of the US government. In addition to financial sanctions, within the framework of the DPA, the defendants agreed to cooperate fully with the relevant components of the department and the FBI; the immediate abandonment of any foreign or US security clearances; a lifetime ban on future US security clearances; and certain future employment restrictions, including an employment ban involving CNE activity or the export of defense articles or the provision of defense services under ITAR (e.g. CNE), and employment restrictions for some organizations in the United Arab Emirates.

The investigation was conducted jointly by the United States Attorneys Office for the District of Columbia, the National Security Division of the Department of Justice (NSD) and the FBI Field Office in Washington.

Assistant U.S. Prosecutors Demian Ahn and Tejpal Chawla of the District of Columbia’s Office of U.S. Attorneys and Cyber ​​Investigations Legal Advisor Ali Ahmad and Attorney General Scott Claffee of the NSD Counterintelligence and Export Control Section led the investigation for the government.




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