Wireless Advances the Criminal Enterprise
By Dave Mock, Fri Jun 28 00:00:00 GMT 2002

Early adopters of advanced wireless tools don't always fit the standard image of a clean-cut, corporate road warrior.

The curious teens packed closely around Scott in the hallway during a class break. They all wanted a glimpse of the electronic beeper, something they had only heard some rich lawyers and doctors used. How can Scott afford it? Those things cost hundreds of dollars. While a silent minority knew the truth, most students and faculty thought it was loaned to him by a rich uncle to keep abreast of an ailing father's medical needs.

The real story came to light only after a curious teacher eavesdropped on one of Scott's calls home. The ailing father turned out to be a director in the local drug ring, arranging drops of heroin and cocaine for eager customers. And Scott was not the only one - dozens of kids at several schools around the county were supplied beepers and cellular phones - high-class luxury items in the early 1980s. By the time authorities connected the dots, the drug ring had grown substantially and become more entrenched in the community.

What many people don't realize - and most wireless service providers don't publicize - is that a significant portion of wireless services are used to support varying levels of criminal activity. Commercial wireless equipment is quickly adopted as an indispensable "tool of the trade" for all levels of crime. While most people envision early adopters of new wireless tools as white-collar businessmen with deep pockets, the truth is closer to gangs and thugs eagerly dropping top dollar for something that will give them an edge against rivals and law enforcement.

ROI in the Criminal Enterprise

The commercial arrival of cellular phones and pagers provided much more practical ways to organize drug gangs and prostitution rings. Pimps now had a better way to "manage the supply chain" of his enterprise - having a more efficient means to locate and redirect his thinly dressed partners to meet customer's needs. Regional drug lords could quickly take market share from competitors by adopting wireless tools to improve CRM (Customer Relationship Management) through quicker order fulfillment. Ironically, while many wireless providers have tried for decades to convince legitimate businesses that wireless tools can improve their operations, just about every thug involved at any level of crime knows that mobility can provide a substantial return on investment.

Street vendors hawking a variety of legal and not-so-legal goods quickly adopted cellular phones to protect their black market activities. Once they made contact with a customer they deemed to be legitimate, a simple wireless call or message to a partner located in a nearby truck could provide the goods in a discreet and undetectable manner. Thus the most lucrative sales for these businessmen were preserved and now hidden from obvious view.

And once cellular phones became a common tool of even the most unorganized crime gangs, it did not take long for some to learn some very simple techniques to take it one step further. Early cellular transmissions were inherently insecure due to their analog nature, and ill-intended wrongdoers could easily find their way into someone else's call by using a radio frequency scanner to capture signals. The true danger here was not the loss of privacy when making a cellular call, but that the identity of any number of cellular phones could be stolen.

The Attack of the Clones

The theft of mobile phone identities - called cloning - has become a very big problem for law enforcement around the globe. To clone a cellular phone a thief only has to obtain the phone number and ESN (electronic serial number) of an activated phone and then have it programmed into another phone. Cloning became so rampant in the early 1990s that many countries outlawed the sale and use of scanners that could pick up cellular signal or even be easily modified to do so.

More technically savvy outlaws cleverly adapted these wireless tools to rapidly grow their business. In one notable case, a crafty drug dealer took advantage of a simple cellular scanner to eavesdrop on the communications of competing dealers in New York. By turning law enforcement on to these illegal activities, he quickly grew his business by taking over markets abandoned by incarcerated adversaries. A favored snitch, the dealer then had the impudence to trace the identities of the cellular phones and pagers of the detectives and police he worked with in order to ensure his own operation was not endangered.

Wireless service providers - who at first were making millions off criminals - were now eager to fund police sting operations to stem the fraud. One particular operation in Florida had a false retail location set up to capture and charge almost 100 criminals in a little over a month's time. In this period alone, the tracked outlaws racked up $165,000 in stolen airtime, giving a sense of the magnitude of the problem to mobile service providers. Police benefit from the arrangement since criminals caught in cloning stings are also often involved in a whole host of other misdemeanor and felonious activity - usually involving drugs, weapons and stolen property.

The dual effect of criminal behavior on balance sheet of wireless companies has left them in a quandary. While unethical and illegal activity makes up a substantial portion of revenue for service providers, it also accounts for the majority of fraudulent charges. The love-hate relationship with wireless companies and touchy subjects such as crime and pornography helps explain why companies contacted by The Feature about this article unanimously declined to comment.

The Criminal Fortune 40 Goes Wireless

Cloning is a tool that goes far beyond street crime though. The most sophisticated criminal organizations still use cloned cellular phones routinely in their operations today. A major Colombian drug cartel, for instance, is known to have had a telecommunications expert modify cellular phones so that multiple identities could be programmed into it. Before each call was made, the identity of the phone would be "tumbled" to a new number so that any law enforcement agency would have no idea what number to tap - all calls from the phone would look like a random list of legitimate users.

Organized crime around the globe also lived up to its sophisticated methods by using wireless communications to cover tracks of illegal gambling, kidnappings, money laundering and other felonies. In today's wireless world, even capturing the head of organized crime gangs sometimes does little to curtail their activity. Babloo Srivastava, a notorious Indian crime boss, used a cellular phone to continue kidnappings and extortion from the safety of his cell in Tihar Jail. It was not until authorities tapped the phone of an outstanding accomplice that they realized he was communicating from the jail.

Terrorists are also unpopular benefactors of wireless communication. Crude timers set to detonate bombs at specific times were quickly replaced with an off-the-shelf cellular phone with the ringer tied to the detonator. Now human tragedy could be accurately choreographed to instill as much fear as possible by simply dialing a number at the appropriate time. Some have even speculated that Pan Am 103 was destroyed over Lockerbie by a "radio bomb" detonated when the pilot crew switched to a predetermined radio frequency channel rather than the popular belief that it was set off by timer or altimeter.

The Smoking Gun

But police and state authorities adjust quickly, and they have learned to adapt the very methods criminals use to track and capture them. As the popularity of wireless communications in criminal acts exploded, police forces began educating themselves and hiring reformed bad guys to get in on the wireless action. In the very same way that computer security firms were hiring hackers to boost their capabilities to fend off cyber attacks, law enforcement was tapping the knowledge of wireless experts and convicts to even the playing field.

Personal cellular phones used by criminals usually led an extensive electronic and paper trail for investigators to follow. Simply recovering a cellular phone from a suspect could provide law enforcement with a virtual Rolodex of criminal contacts - something that days of coercion, interrogation or even torture may not reveal. Very quickly, wireless communications were becoming more of a hangman's noose than a secure communication tool.

Many recent, high profile criminal cases have been solved thanks to the radio fingerprints left behind by wireless technology. Kevin Mitnick, one of the world's most notorious computer hackers, was finally tracked and caught in 1995 as he logged onto a computer network through a cellular phone. While he had employed cloned phones to hide his network intrusions, the tenacious US Secret Service actually turned the tables and used his cellular signal to locate and apprehend him.

Only a few years before, the infamous Medellin drug lord Pablo Escobar was tracked and killed with the help of the CIA by homing in on his cellular phone signal. In late 2001, cellular phones left in backpacks by suicide attackers of the Indian Parliament House were instrumental in connecting the mass murder to Pakistan.

Terrorists have also taken a dose of hard medicine served up by increasingly sophisticated government agencies. In 1996, Hamas leader Yahya Ayyash was slipped a cellular phone with explosives hidden inside. The functional unit was supposedly tracked by Israeli Intelligence, who listened in on conversations and detonated the unit when it was up to Yahya's ear, taking most of his head off and killing him instantly. The same year, Chechen president Dzhokar Dudayev found himself on the wrong end of a missile that was directed to his location by the satellite phone he was talking on at the time. Osama bin Laden is also said to have narrowly escaped death traps that were set by information tapped from conversations on his Inmarsat satellite phone.

Encryption - The Unbeatable Opponent?

Since the 1998 bombing of his bases in Sudan and Afghanistan, Bin Laden has reportedly been much more careful about the wireless equipment he uses. Some have even said that he strictly forbids any radio use in his inner circle of commanders, fearing the advanced detection capabilities of the U.S. National Security Agency (NSA). But others believe he has simply stepped up to the latest advance in secure communication - encryption.

To evade the new tools in the hand of law enforcement and government agencies, criminals have started adopting advanced encryption methods in increasing numbers. Very sophisticated yet simple to use encryption such as PGP and "secure phones" are now common in communications between organized gangs and terrorists. This new threat is something law enforcement is once again struggling to keep up with today. The most advanced supercomputers and decoders still often take too long to break codes - by then the information is useless or redundant.

So once again law enforcement is at a disadvantage with sophisticated encryption technologies in the hands of devious criminals. While some well-funded government agencies such as the NSA may be making headway against these new high-tech threats, the average local police department still struggles with resourceful, mobile cons adopting new technology. Just as the mass consumer market follows the lead of early adopters, so will law enforcement continue to take cues from the criminal enterprise in an effort to keep up.

Dave Mock is author of "Tapping Into Wireless", a hardcover book from McGraw-Hill covering investing in the wireless market. A freelance writer and consultant, he has also published numerous eBooks for investors and industry staff that are available through his website and all major eBook retailers. He can be reached at dave@davemock.com.