Everyday, the crimes that will be targeted by CHIP units result in tremendous
financial losses to consumers, businesses, universities and government agencies.
What is more damaging, however, is the perception of lawlessness that computer
crime creates. These new teams will prosecute vigorously those responsible
for cybercrime. As a result we hope to reinforce the message to would-be
criminals that there are no free passes in cyberspace. Crimes will be investigated
and criminals will be prosecuted to the fullest extent of the law.
The new CHIP units will be established in eight cities in addition to
San Francisco, where the CHIP concept was pioneered and has proven itself
as an effective method of prosecuting cybercrime and intellectual property
crime. Los Angeles, San Diego, Atlanta, Boston, New York (Brooklyn and Manhattan),
Dallas, Seattle and Alexandria, Virginia will all host CHIP teams. These
cities were chosen based on a number of factors including:
In total, 10 units will be created, staffed with a total of 77 personnel,
of which 48 will be prosecutors. U.S. law enforcement has been at the forefront
of worldwide efforts to fight crime in the digital age, and the Department
of Justice has been a major contributor to that effort. The Computer Crime
and Intellectual Property Section of the Department is a highly specialized
team of over two dozen attorneys. These dedicated men and women focus on
computer crime and intellectual property crime. They provide expert assistance
and training to the United States Attorneys offices, everyone of which has
designated at least one prosecutor as a specialist in computer crime.
In addition, the Federal Bureau of Investigation has squads of specially
trained agents in sixteen cities focusing on high tech crime as part of
its National Infrastructure Protection Center. And in every FBI field office
in the country there is at least one agent with computer crime training.
Despite these significant measures, however, the rapid advancement of
technology has created new means and new opportunities for criminals to
victimize companies and consumers. A survey of U.S. corporations and government
agencies conducted earlier this year by the FBI and the Computer Security
Institute gives a sense of the extent of cybercrime in America today. A
full 85 percent of respondents said they had detected computer security
breaches in their systems within the past 12 months. Sixty-four percent
acknowledged financial losses due to computer breaches.
Price Waterhouse-Coopers reports that businesses spent $300 billion to
fight hackers and computer viruses last year. And these costs, while already
significant, are doing nothing but rising. In 1999 the "Melissa"
computer virus did damage totaling about $80 million to 100,000 or so computer
users. In contrast, last years "I love you" virus attacked
users worldwide with an estimated cost of $10 billion.
The growing frequency, sophistication and cost of computer crime means
that law enforcement must constantly rededicate itself to the vital mission
of keeping cyberspace safe for all Americans. The formation of these ten
CHIP units is an important step in improving our nations response
to the many and varied challenges of the digital age. CHIP team members
will strengthen the highly trained network of cybercrime prosecutors at
the Department of Justice in the Computer Crime and Intellectual Property
section and the U.S. Attorneys offices.
A great deal of credit for this initiative goes to FBI Director designee
Robert Mueller and the U.S. Attorneys Office in San Francisco which
established the first of these units. Since its inception, the CHIP unit
in Northern California has been a leader in prosecuting computer intrusion
and intellectual property cases. To their great credit, their successful
efforts are the model for the program I am announcing today.
The Northern California CHIP team successfully prosecuted one cybercriminal,
for example, who illegally hacked into critical computer systems of the
United States government, including the U.S. Department of Energy, NASA,
the Department of Transportation and seven U.S. Department of Defense Air
Force Base systems. He is currently serving a sentence of 18 months in prison.
The San Francisco CHIP team also prosecuted a large-scale conspiracy of
cybercriminals that included armed robberies of shipments of computer components,
the international sale of these components and then the money laundering
of the proceeds. All eight defendants were convicted and received prison
terms ranging from 2 ½ years to 13 years.
In another recent case, the team achieved what is believed to be the first
ever criminal forfeiture of a web site in an intellectual property case.
A group of individuals was charged with selling copyrighted software over
the internet at a web site called "software-inc.com." After they
were apprehended and pled guilty to criminal copyright infringement and
conspiracy to commit wire fraud, the cybercriminals agreed to forfeit not
just the $900,000 they made as the result of their illegal scheme, but the
domain name for "software-inc.com" as well. When the site becomes
the official property of the United States government, prosecutors intend
to keep it up on the internet. Visitors will see a warning that the site
has been seized by law enforcement and get the clear message that cybercrime
carries real penalties for offenders.
Computer and software companies, some of whom were initially skeptical
of the federal governments commitment to mount an aggressive effort
against cybercrime, have found themselves on the winning side of successfully
prosecuted cases. Smaller companies that were the victims of cybercrime
have told prosecutors that the recovery of stolen data by law enforcement
allowed their companies to stay in business. They are grateful, theyve
said, that the team took the time to prosecute crimes against smaller companies
as well as crimes against the computer and software giants. And as a result
of these successes, the mutual trust that is essential to combating crime
has taken root and begun to grow between private industry and law enforcement.
In addition to prosecuting cases, these new CHIP teams will focus on the
prevention of cybercrime by working with local industry to anticipate future
trends, identify vulnerabilities and stop cybercrime before it occurs. In
addition, CHIP team members will offer regional training programs to increase
expertise among federal, state, and local prosecutors and investigators
in the special skills needed to address these crimes.
To do this job and to do it right, however, we need the help of the high
tech community. Our experience tells us that when a bank is robbed, bank
officials call the police. But when valuable commercial information is stolen
from high tech companies, victims are often reluctant to refer their cases
to law enforcement. We know from speaking with business managers that they
are often disinclined to acknowledge that their computers which they
thought were secure were not so secure after all. They fear customer
mistrust and competitive disadvantage.
These fears, while understandable, are ultimately self-defeating for the
high tech community. The failure to reach out to law enforcement when cybercrime
strikes can leave businesses vulnerable to additional victimization. A company
that does not report crime leaves the criminal free to strike again. It
may also create incentives for criminals to victimize the same company again
in the belief that no punishment will be forthcoming.
The new teams of prosecutors being announced today will work with industry
to address the reluctance to report cybercrime. CHIP units will make themselves
known to the businesses, universities, and other technical centers in their
communities to build partnerships and to build trust. Together, we hope
to convince the high tech community that when they report incidents of cybercrime,
they are not just doing the right thing for their community they
are also doing the right thing for their business.
As we work to make the remarkable technological advances of the digital
age a positive
force for all Americans, we enter a new era in law enforcement. I urge all
members of the computer, software and high tech community to be partners
with them in ensuring that justice and the rule of law prevail in cyberspace.
Thank you very much.