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FBI Defend Raids On Texas Datacenter 115

Posted by timothy
from the we're-from-the-govt-and-we're-here-to-help dept.
Aryden writes "Wired Reports: 'The FBI on Tuesday defended its raids on at least two data centers in Texas, in which agents carted out equipment and disrupted service to hundreds of businesses. The raids were part of an investigation prompted by complaints from AT&T and Verizon about unpaid bills allegedly owed by some data center customers, according to court records. One data center owner charges that the telecoms are using the FBI to collect debts that should be resolved in civil court. But on Tuesday, an FBI spokesman disputed that charge.'"
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FBI Defend Raids On Texas Datacenter

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  • April 7, 2009 (Score:5, Informative)

    by Anonymous Coward on Monday December 20, 2010 @01:50AM (#34613096)

    I know Slashdot is sometimes slow to report on news, but come on...

  • Article is from 2009 (Score:5, Informative)

    by harmonise (1484057) on Monday December 20, 2010 @02:03AM (#34613142)

    This article is from April 7, 2009 and is old news. It's already been covered on Slashdot and other tech news sites a long time ago.

    Breaking news: Oracle has made an offer to purchase Sun Microsystems. Will it be approved by regulators? Stay tuned!

    • by fishexe (168879)

      This article is from April 7, 2009 and is old news. It's already been covered on Slashdot and other tech news sites a long time ago.

      No way, man! The summary clearly says it happened "on Tuesday"!

    • by anomaly256 (1243020) on Monday December 20, 2010 @04:37AM (#34613664)
      The raid was on April 7 2009.. The FBI just now publicly defended it on Tuesday just gone. And in another 2 years they will begin analyzing the equipment, and 4 years after that they may start returning it, provided anyone can remember to claim it.
      • Just in time to make the equipment totally valueless. The FBI did such a great job in helping economic recovery. They just scared legitimate business into looking for offshore data centers thereby contributing to further job loss and economic decline. If I were Faulkner, I too, would be looking for offshore data centers.
    • Breaking news: Oracle has made an offer to purchase Sun Microsystems. Will it be approved by regulators? Stay tuned!

      Well shit. I have a short memory and am too lazy to google it, but now I'm extremely curious as to whether or not it was. Fortunately, I won't be wondering for very long (short memory and all.)

    • by vegiVamp (518171)

      Oh, come on. The regulators'll never stand for it, Oracle would get way too much clout in the business that way.

    • by novalogic (697144)

      Well, a little bit more updated news.. (Jan 2010)

      http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/0109dnbusindict.5a69f16b.html?ocp=2#slcgm_comments_anchor [dallasnews.com]

      Seems one of the main people referenced in the story is dead trying to re-enter the US after he fled, the other is in Jail.

      At least we know what happened to the players.

  • by Lord Kano (13027) on Monday December 20, 2010 @02:05AM (#34613150) Homepage Journal

    This case is important because we're involved, if it wasn't important we wouldn't have gotten involved.
    -Why was it important?
    Because we were involved.
    -Why were you involved?
    Because it was important.

    rinse
    repeat

  • by wizardforce (1005805) on Monday December 20, 2010 @02:21AM (#34613198) Journal

    Liquid motors loses appeal after raid [wired.com]

    A condensed summary of what happened [reddit.com]

    There isn't much if anything about what happens after all of this, whether the case went to trial etc. just that Croydon technology's website hasn't been updated since.

    • by Cylix (55374) *

      I think the reason the website stopped being updated was due to him fleeing the country and subsequently being arrested.

      http://dallas.fbi.gov/pressrel/pressrel10/dl011510.htm [fbi.gov]

      It was neat to read the beginning, find the middle and end. However, it's a bit sad to see the date highlighted so quickly.

  • Though this is still almost a year old: Under the 'legal' heading. [cisco.com]
  • by Anonymous Coward

    Found this article here: Looks like the datacenter owner mysteriously disappeared or something?

    http://www.computerworld.com.au/article/332205/isp_operators_among_19_arrested_cyber-fraud_case/ [computerworld.com.au]

    What, it's 2010 already?!

    • by JWSmythe (446288)

          Check your calendar. It's Dec 20, 2012. Hmmm, why is tomorrow circled in red?

  • by hyades1 (1149581) <hyades1@hotmail.com> on Monday December 20, 2010 @03:10AM (#34613376)

    They have data centres in Texas?

  • by hyades1 (1149581) <hyades1@hotmail.com> on Monday December 20, 2010 @03:14AM (#34613384)

    I guess that's what they call it when somebody brings the state library's book back.

    • by Anonymous Coward

      Never heard of a Texas datacenter? You've probably been to a site hosted in one.

      http://news.netcraft.com/hosting-analysis/ [netcraft.com]

      The Planet (recently bought by Softlayer) is the 5th largest web hoster in the world. Their datacenters are in Houston and Dallas. Also, there's this tiny little company called Rackspace based in San Antonio. Maybe you've heard of them.

      So yes, Virginia, there are datacenters in Texas. Big ones, because everything is bigger in Texas. (Yes, egos are bigger, too.)

      • I'm not saying our data centers are big, but I think they found a lost amazon tribe in the back of one. They use carts with indy 500 engines to get around inside them. And when one of the Texas data centers comes on line, the power flickers in several adjacent states and all of Mexico.

    • I guess that's what they call it when somebody brings the state library's book back.

      Hey, I live in Texas. I know for a fact we have more than just one library book. (I would give you an exact figure, but our math teachers aren't allowed to teach us numbers that big!)

      If I had to guess I'd say more than 665...

    • by GodfatherofSoul (174979) on Monday December 20, 2010 @05:08AM (#34613778)

      That's a flat out offensive lie. Tthere's an English *and* a Spanish bible.

      • by hyades1 (1149581)

        I've got some mod points, but I can't use them here, unfortunately. Yours is the funniest remark I've read in quite a while.

        Thanks for the morning laugh.

      • I was in a Texas library a few days ago and saw several books about Intelligent Design. These people must be pretty bright to find a way to fill more than one book on a subject I could only write a few sentences about, so don't underestimate them.
  • Deja vu.
  • in droves. im in the industry, and that is what i see. with hosting customers, i dont mean just people who are hosting a few websites. people who are running small hosting businesses with dedicated servers/clusters, or offering vpses, cloud services are running away to europe too. thanks to the draconian (and curiously numerous) internet control crap put out recently (acta, coica, this that) and the wikileaks incident. this, will only strengthen the trend.
    • by Hadlock (143607)

      What's the solution for customers who need low latency (> 120ms) hosting? Our (US-centric) retail website is slow enough; I hesitate to think what the customer's experience would be like with a 250ms round trip ping(!) Living in Dallas, I routinely connect to London and Paris dedicated servers and ping 160 and 180ms, respectively. I'm on a fast connection near InfoMart; I hesitate to wonder what people more than a few miles/hops from a backbone connection pings to those same servers.

      • by unity100 (970058)
        100-400 ms pings are not much of an issue when serving web pages. these pings create problems if you are hosting game servers or similar.

        if you need low latency, you will have to get a server in the physical location/backbone vicinity you are going to offer the server in. so, if you are gonna offer game servers in usa, you need a usa datacenter. if europe, eu datacenter.

        however if youre going to serve web pages (ie typical web hosting), us, eu, wont differ too much as long as the provider of your dedi
      • by gmack (197796)

        Try Canada. You can host in Vancouver, Montreal or Toronto and get good speed/low latency to the US mainland.

    • What good will going to Europe do for ACTA, which is the Anti-Counterfeiting Trade Agreement, an international treaty being negotiated by the European Union and Switzerland along with the US, Singapore, South Korea, Australia, Canada, Mexico, Morocco, New Zealand, Japan, and the US?

      Are they moving specifically to Serbia, Ukraine, Belarus, Liechtenstein, Norway, Monaco, San Marino, and Andorra? Pretty much every other European country is an EU member, a candidate EU member, or a "potential candidate member".

    • I'm european. I used to buy my dedicated hosting in the U.S. for several reasons - Low latency to my lots of american users, good location for international routing, prices, etc. Then after a series of setbacks caused by companies with bad business practices (read extortion), increasing prices and, yes, scary laws, I finally relented and moved to europe. Never looked back! And I'm sorry to say I also regularly convince others to move from the U.S. to europe.

      • by Fnord666 (889225)

        I'm european. I used to buy my dedicated hosting in the U.S. for several reasons - Low latency to my lots of american users, good location for international routing, prices, etc. Then after a series of setbacks caused by companies with bad business practices (read extortion), increasing prices and, yes, scary laws, I finally relented and moved to europe. Never looked back! And I'm sorry to say I also regularly convince others to move from the U.S. to europe.

        Do you have any recommendations for good hosting providers? At this point I am looking to make a move.

  • Claim it will revolutionize the field of electronics. Slashdotters overwhelmingly skeptical.

  • by mr_mischief (456295) on Monday December 20, 2010 @03:49AM (#34613510) Journal

    This was not recent. This was not a debt collection, either.

    The guy's stuff wasn't grabbed by the FBI because he didn't pay his bills.

    The guy's stuff was grabbed because he never intended to pay his bills himself, and he committed fraud in order to get the colocation space and bandwidth in the first place.

    The guy got credit references from people who didn't exist. He forged receipts from other telecom companies. He altered documents to show he'd paid bills that other people had paid. He used a maze of twisty little business names, all different.

    He did all of that to secure credit from these folks to allow him to start service with them without a hefty deposit. Then he ditched the bills like they would have expected he might had he not forged the credit-worthiness paperwork.

    Fraud is not simple insolvency. It is a felony.

    There was every reason for this to be investigated and prosecuted as a criminal offense.

    There was also every reason for it to be newsworthy last year when it was news.

    • Re: (Score:1, Offtopic)

      by Elbereth (58257)

      Ha. All the slashdot "editors" should be fired, and you should be the first new hire. All in favor?

    • So, the fact that it happened last year justifies the FBI ignorance of shutting down and entire colocation facility and seizing the equipment of 300 some business just because it was "interconnected" (everything there had internet access ... duh)?

      • The guy had possession of the equipment. He was the colocation provider. The customers put the equipment in his hands for safekeeping. He was an alleged fraudster. The facility's lease was allegedly unpaid. The circuits the customers were connected to were allegedly unpaid.

        Why should the customers get service? Because they paid him? Right. And he should have been paying his bills. Then his customers could have maybe had service. As it was, his customers were getting scammed and so were his vendors (allegedl

        • Well, this is understood, but how do you do that?

          This guys was forging documents from his circuit agreements and things. You can't call Verizon to ask about someone else's account. You have to rely on the documentation the colo gives you.

          I would bet that at least one of those 300 customers had asked for proof of current accounts and things like that and was provided such (fradulently) by the colo owner.

          It's too bad they had to be pulled in. It seems to me that the FBI could have made an effort to clone t

    • by EdIII (1114411)

      I don't think your wrong about what started it. However, you are missing something very important here. They impacted hundreds of other unrelated businesses and thousands of customers due to the complete and utter stupidity of the FBI agent in charge.

      Lets me give you an analogy here.........

      I operate a meth lab out of my house. DEA comes into the entire neighborhood and arrests hundreds of people and confiscates all of their personal property and throws every child into social services.

      That does not make

      • by mr_mischief (456295) on Monday December 20, 2010 @09:47AM (#34614814) Journal

        The problem was they seized computers and networking equipment at his address that he was being paid to hold for others. If you are under investigation and a warrant is issued for all computer equipment and networking gear at your address to be seized as evidence, that is likely what will happen no matter what agent of what agency is in charge of the investigation.

        What would you have the FBI do? You want them to raid the guy's colo facility, take his stuff, and leave his customers' equipment running on unpaid circuits inside an unpaid leased room? You want them to tip off his customers to the raid before it is executed? There is no good solution here.

        The best one could hope for is that the customers did a little more due diligence for mission-critical applications like 911 service and credit card processing about the kind of colocation service they were getting and the integrity of the business.

        • You know, I was really right along with you, until you started spouting this bullshit

          The best one could hope for is that the customers did a little more due diligence for mission-critical applications like 911 service and credit card processing about the kind of colocation service they were getting and the integrity of the business.

          of blaming the victims. How the fuck do you know how much due diligence they did? This dude apparently lied well enough that guys whose livelihood is made by checking out backgrounds were fooled.

          Have a little empathy, for christ's sake.

        • by EdIII (1114411)

          What would you have the FBI do? You want them to raid the guy's colo facility, take his stuff, and leave his customers' equipment running on unpaid circuits inside an unpaid leased room? You want them to tip off his customers to the raid before it is executed? There is no good solution here.

          Uhhhh, no. I would want the FBI agent to be smart enough to differentiate between all the servers, switches, etc. that are being used to service the customers and the customers equipment.

          If that was truly the situation. My understanding is that the company being raided did not own the colo facility. In any case, the FBI could have come in and seized all the company's equipment and then offered all the customers the chance to pick up their property.

          There is a difference between the FBI giving reasonable not

      • by mcgrew (92797) *

        That does not make a lot of sense does it? Kinda of reminds you of movies where the evil Nazi's occupying a village round up every villager and shoot a couple because the resistance threw a pie at the Colonel.

        Grammar "Nazi's"?

      • by Rudolf (43885)

        They impacted hundreds of other unrelated businesses and thousands of customers due to the complete and utter stupidity of the FBI agent in charge.

        In the article, some of those companies were complaining that they lost all their data and they couldn't get back online.

        So my question is: why no off-site backups, and why no off-site failover?

        What if it had been a tornado or earthquake that took the server, instead of the FBI? Did these companies have no contengency plan to get up and running again?

        • by EdIII (1114411)

          Some companies are just not that big yet you know. I started out with a small server colocated in Houston back in 96.

          Operating out of multiple facilities at the same time is not trivial either. Sure... if you have all the money in the world to spend on MS and a lot of clusters you could get the job done. However, a lot of people cannot justify the expenditure of tens of thousands of dollars for that. They could not be competitive in their spaces.

          Basically, we are talking about a steep barrier to entry fo

    • It is old news, yes. But tell that to the 300 OTHER businesses who had their equipment siezed, 100 of which subsequently went out of business, likely at least partially as a result of this FBI action.

      Seizing the power strips and cabinets and even the books full of system documentation from OTHER COMPANIES not involved in the fraud, other than to be physically located near the suspected fraud.

      That's the news, if you ask me.

    • And how are any of those things a felony?

  • A very interesting read for those who are interested in finding out what came of this:
    http://seclists.org/fulldisclosure/2010/Mar/142

    • From the second paragraph of that article:

      This deeply saddens n3td3v because
      we believe that MPAA and RIAA are forces of good. They saved millions of lives.
      (n3td3v has lobbied for corporal punishment for trolls and torrent downloaders)

      http://it.toolbox.com/blogs/managing-infosec/security-trolls-n3td3v-12460 [toolbox.com] states:

      N3td3v is/was a security troll that plagued the full disclosure list for quite a while, claiming to be a yahoo security engineer

      (from the start of an extensive article)

      The most complete copy I've found of Faulkner's lengthy initial posting on the matter is at:
      http://webcache.googleusercontent.com/search?q=cache:WnAbrdQbA30J:www.scribd.com/doc/13974347/mirror-of-wwwuwwwbcom-FBI-indiscriminate-actions-in-fascist-america+&cd=1&hl=en&ct=clnk [googleusercontent.com]

      Yep, the google cache of a page printed to PDF and uploaded to

      • by ogl_codemonkey (706920) on Monday December 20, 2010 @06:51AM (#34614122)

        Found a clean copy of the text; have restored the embedded links here:

        Hello, this is CygonX. Our Hosting Data Center has suffered a major disaster: Namely the FBI storming the Data Center and the company's owner's home (that's me). The FBI took an entire data center, hundreds of servers, routers, switches, UPS system, cabinets, monitors, printers, and even power strips...as evidence.

        You would expect this kind of totalitarian storm-trooper activity in the name of the war on drugs, the war on terror, or etc. But the United States Federal Bureau of Investigation actually did NO investigation in this particular case. They took the statements of an ex-employees of the company, which was fired for drug use.

        What were they looking for? Well that’s a tricky question, and I am not even sure they know, but the short answer is $6.1 Million Dollars. Hang in there, the story gets more interesting.

        As many of you may know I have played the role of Administrator for the UWWWB forum, AKA CygonX for many years. Truthfully, CygonX was a lot like Santa Claus, and has actually been played by many people over the years in order to manage the site, but I am the original and current owner. My real name is Mike Faulkner, and I have hosted the Network Security forum and community at this domain name since sometime in early 2002.
        I was the CEO of a small tech company when I took over the site, and I hosted it off my own network on a pair of T1s. That company went under, taking most of my money with it, and UWWWB was actually hosted off a cable modem for a period of time from an equipment rack in my home. This is my forum and community that I have nourished for years.

        Over the years, I have bought, sold, and built a large number of small tech companies. I worked my way up, with 100 hour work weeks, and by taking almost no money out personally for many years. For the past few years I have been a very active venture capitalist. Investing in various small technology businesses, and using them to support each other. My VoIP Companies used my Hosting Companies, which leased space in my Data Centers, and etc. This was the Crydon Capital Corporations family of companies.
        Crydon Technology, was the data center and hosting company that the FBI raided in Dallas March 12th, 2009. UWWWB was tucked away on a tiny server in the data center for years, and we never even got a single complaint from RIAA, or MPPA, or anyone. This is not just about UWWWB, although the FBI certainly is holding it against me for running a security site.

        Here's what happened: March 12th, 2009, at about 5:AM in the morning, my home alarm system went off. I get up to see what’s going on, on maybe 3 hours of sleep, and my wife points out there are two people with flash lights in my back yard. Now, this may not be unusual for everyone, but I lived in a fairly nice home in Southlake Texas, the United States highest per-capita income city for 2008. A very nice community, virtually no crime, and excellent schools. That is to say, I did not live in a shack in the hood, this is nice suburbs, and not where the FBI usually does raids.
        So I run out the back door of my home, thinking I was about to confront some crackheads trying to steal the copper off my AC unit or something. And although I couldn’t quite see them yet I heard the very authoritative voice of what appeared to be law enforcement officers, with the radio noise to go with them. They proceeded with the expected dialogue, "stop", "show me your hands", "hands in the air" etc. They didn't shoot me, and sadly that really was the highlight of my day. I assumed my alarm had triggered by itself and the cops had been called, as we had problems with the alarm system before. They handcuffed me, while I was telling them I was the home owner. No big deal, they’ll figure it out in a second, right?
        It wasn't a false alarm on my home security system, the FBI had cut my phone lines.

        When they brought me around to the front of my house, there was a very

  • Update on the Case (Score:5, Informative)

    by BBCWatcher (900486) on Monday December 20, 2010 @05:54AM (#34613930)
    Michael Blaine Faulkner, his wife, and others allegedly fled to Mexico shortly after the 2009 raid. A federal grand jury handed down several felony indictments in January, 2010 (or possibly late 2009). Mexican authorities captured Faulkner and his associates in January, 2010, in Cancun where allegedly they were living under assumed names. They were extradited back to Texas. Faulkner petitioned for release pending trial, but that request was denied in March. The trial date was set for October, 2010, but I've seen no information on any trial yet.
  • Had backup files somewhere in Texas after all...
  • Wow the FBI gets pissed if someone cons money. Maybe they should focus their attention on banks.
  • by Anonymous Coward

    Cisco does the same thing.

    They farm out production to China to save some money. The reason they save money is because of the cheap labor, lack of oversight, and weak regulation. Cisco and everyone else in the world that farms out production to China knows that. They also know that the Chinese may steal some of the technology as well. So.. those companies in China have some overruns, those overruns hit the "black market" and make their way into the US. Cisco cries fowl and gets the FBI/CIA involved bec

  • Don't outsource your data center. It may be wise to store backup copies in such places, but if you want to protect your data, keep it IN HOUSE.

Nothing is more admirable than the fortitude with which millionaires tolerate the disadvantages of their wealth. -- Nero Wolfe

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