Identity Thief Strikes Some Familiar Names, Program Allows Hackers to See Through Web Cams, Small Business on the Web
JAMES HATTORI, HOST: Today on CNNdot</s>COM: Imaging having your identity ripped off. Well, some of the biggest names in showbiz and high tech don't have to imagine. How did it happen?</s>BETSY BRODER, FTC BUREAU OF CONSUMER PROTECTION: Now it is entirely legal to go online and purchase someone's social security number.</s>HATTORI: We'll show you the latest case of when identity thieves strike. Crime, cyberstyle. A new program allows black-hat hackers to make themselves at home in your home.</s>KEVIN POULSEN, SECURITYFOCUS.COM: If you have a webcam, they can monitor what's going on in your room.</s>HATTORI: Find out whether you're vulnerable and what you can do to reduce the risk. Want to make a small business bigger? Try putting it on the Web.</s>KEN GAVRANOVIC, CEO, INTERLAND WEB: Your Web site talks to people that are your prospective customers 24 hours a day.</s>HATTORI: If you want to enter the world of e-commerce, we'll show you some tools to get you there.</s>ANNOUNCER: This is CNNdotCOM with James Hattori.</s>HATTORI: Hi, everybody, and welcome to CNNdotCOM. Did you know that each year hundreds of thousands of people become victims of identity theft, where a hacker gets access to personal information, in some cases, even access to bank accounts. We begin today with two reports. Kelli Arena explains how this crime is carried out. But first, as Steve Young tells us, even the rich and powerful can fall prey to identity thieves. Let's go to New York.</s>STEVE YOUNG, CNN CORRESPONDENT (voice-over): New York City police Tuesday told the tale of a Brooklyn busboy accused of using the Internet to give the likes of publishing mogul Martha Stewart, media magnate Michael Eisner, and former presidential candidate Ross Perot the business. They arrested Abraham Abdallah and another suspect earlier this month. They emphasize Abdallah's role in the alleged scam to scoop up the personal identity information of more than half the "Forbes" 400 richest list, using a Web browser on a PC connected to a cell phone.</s>COMM. BERNARD KERIK, NEW YORK CITY POLICE: He tried to gain access to 217 of those people's personal accounts in some form, maybe their credit card accounts, their bank accounts, stock holding accounts.</s>YOUNG: "The New York Post," which broke the story, said other victims of identity theft included Oprah Winfrey; director Steven Spielberg; and Microsoft co-founder Paul Allen, who told CNN through a spokesman he's cooperate with authorities. Others have had no comment or say they don't believe they've been swindled. Police say the suspect stole $100,000 in computer hardware, software, as well as funds, and were angling for millions of dollars before they were caught in a sting. Abdallah had been arrested many times before, and following his arrest in the 1980s, even agreed to help federal authorities. He made a videotape on how to avoid identity theft. (on camera): The federal investigation is just getting underway into the case of the "Forbes" folks who may be at special risk.</s>BRIAN GRIFFIN, DIR., COMPUTER TECHNOLOGY INVESTIGATIVE GROUP INTL.: They probably don't control their money. They have an accountant looking at it monthly, probably assistants who have access to those accounts. So, it's much easier for somebody else to squeeze in the door and perpetrate in the system.</s>KERIK: He was soft-spoken. He was polite. He was courteous.</s>YOUNG (voice-over): As Martha might say, being rich, it's not always a good thing. Steve Young, CNN Financial News, New York.</s>KELLI ARENA, CNN CORRESPONDENT (voice-over): Ladeene Freimuth's nightmare started when she got a call from the Detroit Police Department.</s>LADEENE FREIMUTH, IDENTITY THEFT VICTIM: My identity had been discovered in a fraud case, and that my name and social security number had been used to purchase a number of products and opened a number of accounts.</s>ARENA: Unfortunately, her troubles are far from over.</s>FREIMUTH: Some of my own credit cards that I've had for years have not been sending me new credit cards because of the damage that's been done.</s>ARENA: It's estimated about half a million people fall prey to identity theft each year. Examples include criminals obtaining credit cards and loans in someone else's name, opening utility accounts, even purchasing a home. Gathering someone's private information is easier than you might think. Take, for example, this Web site, www.infoseekers.net, where for just $26 you can obtain someone's social security number.</s>BETSY BRODER, FEDERAL TRADE COMMISSION: Now, it's entirely legal to go online and purchase someone's social security number.</s>ARENA: The Federal Trade Commission is pushing tougher online privacy laws.</s>UNIDENTIFIED MALE: Thank you for calling the FTC ID theft hotline.</s>ARENA: And it's created a hotline, so victims can report identity theft. The FBI now has 200 agents who conduct computer intrusion investigations. And it's helping out on the local level.</s>RON DICK, DIRECTOR, NIPC: We have trained in fiscal year 2000 over 2,000 state, local, federal and foreign investigators how to conduct cyber private investigations.</s>ARENA: Despite increased law enforcement, officials say there's no sure fire way to completely protect your private information. Just ask Ladeene Freimuth. Kelli Arena, CNN, Washington.</s>HATTORI: The Federal Trade Commission has set up a toll-free hotline. If you think someone's stolen your identity, call: 1-877-ID- THEFT. Now, I don't want to make you any more paranoid than you should be, but here's something else to worry about. A new program that lets hackers turn your computer into a cyberzombie. Here's Bruce Francis.</s>BRUCE FRANCIS, CNN CORRESPONDENT: Download a program written with this new software tool, and there's just about nothing a malicious hacker can't do with your computer.</s>POULSEN: He or she can access your files, monitor your key strokes, move your mouse around the screen, capture your screen. If you have a Web cam, they can monitor what's going on in the room. If you have a microphone in your computer, they can listen over the microphone. So it's complete power.</s>FRANCIS: The software is called "Subseven." A new version was released about a week ago.</s>FRED RICA, GLOBAL RISK MANAGEMENT: We've started to kick the tires a little bit, and what we've found is an incredibly powerful piece of software that the hackers have written.</s>FRANCIS: Files that contain code written with the malicious program might masquerade as an attachment to an e-mail, like the damaging "I Love You" virus did. Or nowadays, you might be enticed to download a picture or a video, as we were with this image of actress Jennifer Love Hewitt. The software would then lie dormant on your computer until activated, zombie-style, by a remote command. Your computer could then be hijacked. Not only is your personal data at risk, but your computer could also be tricked into sending out thousands of messages in an attempt to overwhelm a Web site. That's called a denial of service attack, a technique that was used successfully against cnn.com, Amazon.com, and Yahoo! last year. The new souped-up Subseven makes that kind of scheme harder to foil. Experts say it's harder to trace the author. And because the software allows you to create variants, it's harder to protect against. And worst of all, security experts say, is that it's easier to use.</s>POULSEN: It makes it so easy that it's going to lower the bar and make it simpler than ever before for ordinary Internet users to do something really malicious.</s>FRANCIS (on camera): Security experts say that an average computer user with a dial-up connection to the Internet is unlikely to be a target here. But anyone with a high-speed connection like a cable modem, or a DSL phone line is advised to update security and anti-virus software often.</s>HATTORI: Up next on "THE DOT," get set for more small-time fun. Nintendo has unveiled the latest version of its ubiquitous Gameboy. We'll give you a peek, as CNNdotCOM continues.</s>HATTORI: Parents of the world, grab your wallets. Nintendo has just unveiled a new version of its popular hand-held game machine. "Gameboy Advance" debuted in Japan this past week and most stores sold out within hours. The new unit's screen is 50 percent larger than that of its predecessor, "Game Boy Color." It has better graphics and runs faster. New games are also available, but the Advance will play most previously-released titles. The price: $100, but those of us in the U.S. have a few months to save up. Game Boy Advance won't hit American shores until June 11th. Running a small business is no game, especially if you want to put it on the Internet. Just ask Ken Gavranovic of Interland, one of several major companies that hosts Web sites for small businesses. He showed Natalie Pawelski some tools to tackle the world of e- commerce.</s>NATALIE PAWELSKI, CNN CORRESPONDENT: So this Web hosting idea, it sounds like you're serving cocktails or something. What is it?</s>GAVRANOVIC: When you have a Web site, somewhere there has to be a computer and a system behind that, that's hosting the Web site. So what we do is we handle all that kind of that technical part of developing a Web site for a small to medium-sized business.</s>PAWELSKI: What kind of normal mom and pop small-medium businesses can really benefit from going on the web?</s>GAVRANOVIC: This is a great example. Puptown Gourmet was basically a small retail shop. They focused on dog lovers in their neighborhood wanting to buy these treats for their dogs. Here's an example: Picasso's Peanut Barkers, add it to the shopping cart, order all kinds of treats, specially made by a gourmet, for your dog. So here's a small to medium-sized business that was only doing 30, $40,000 a month in revenues, and now they've built their business into a 100, $200,000 a month just by simply putting these great specialty products on the Web.</s>PAWELSKI: It only cost them $150?</s>GAVRANOVIC: To have, basically, an employee that talks about your business 24 hours a day, seven days a week, is never late, never asks for a raise, that's a great thing. And that's what a Web site does for you.</s>PAWELSKI: For a site like this, is it a case of, "If you build it, they will come"? Or do you have to do something, if you're a small business to steer people to your site?</s>GAVRANOVIC: If you build it, they will not come, but if you build a good Web site and have a good product, just like a traditional brick and mortar business, then over time you will get more and more people come back, and they're going to tell their friends.</s>PAWELSKI: Stan's Smoke House: award-winning smoked meat since 1970. What's this about?</s>GAVRANOVIC: Well this another great example. Here is business that basically was a distributor of meat products. And they were selling it to restaurants and delivering those type of service. That distributor, that manufacturer, in this case, obviously, making some great meat products, is able to deliver that direct to the consumer, to you at your house. You get better product, and you get it at a lower price, often.</s>PAWELSKI: But the important question about this site: Do they have polish sausage?</s>GAVRANOVIC: Well, it's a good question. Let's find out. There it is. Polish sausage, ready to go.</s>PAWELSKI: So I have got my business. You have sold me, I know I want to take it online. How do I even start?</s>GAVRANOVIC: This is one reasons I think many small to medium- sized business have not got a Web site. When they think, they think, "Where do I start? How do I get someone to design my Web site? What about security, can someone steal my customer information?" We focus on what's called "outsourcing." So, we go and we make the huge investment in a state of the art data center, and state of the art security systems, and fire wall system. All you have to is simply pick up the phone and call Interland, or another service provider, and say, "Hey, I have my business, I make gourmet food for dogs." They can focus on their business and we take and maintain the Web site and make sure everything works. And we explain it to you in very simple layman's terms.</s>PAWELSKI: The last couple of years we've seen so many of the big, famous Internet-based business, the Amazon.com, the eToys, run into trouble. Why would a small business take that kind of risk?</s>GAVRANOVIC: Well see, that's the great thing. If you look at what's actually happened is that eToys, a business created on the Internet, everybody said that's going to be the greatest thing, and then you look, who is actually there? Toys 'R' Us, the traditional brick and mortar. Having a Web site is, it's a store front, in essence, but it's still a business and you have to run it like business. There's nothing magical about it.</s>PAWELSKI: So a really great Web site is not going to save a really bad business?</s>GAVRANOVIC: Absolutely, I think that's the lesson, is that great business is always going to be successful, and a bad business is always going to fail.</s>HATTORI: If you missed some of that information, you can find it on our Web site at cnn.com/thedot. Coming up, dot-com downsizing is sending chills through Silicon Valley. And for immigrant workers on special visas, it could mean more than losing a job. We'll explain. Stay with us.</s>HATTORI: Welcome back. These days, it's bad enough that high-tech companies are shedding thousands of workers, but what if you came half-way around the world to now find that, not only are you unemployed, but your immigration status is in jeopardy. Well that's what's happening in Silicon Valley.</s>HATTORI (voice-over): They're called H1-B workers, granted special visas because of high demand for their skills in the U.S. Luz (ph) is a software engineer from the Philippines who does want to show her face because she is out of work, and technically lost her H1-B status.</s>LUZ: Very worried. It is a very difficult situation if you are not a U.S. citizen, or if you are not a green card holder.</s>HATTORI: There are an estimated half-million H1-B visa holders in the U.S. The Immigration and Naturalization Service does not know the exact number. Many of the visas were granted to high-tech workers. Although their visas are good for three years, some now face the prospect of being laid off. (on camera): The problem is H1-B workers are granted status for a specific employer who, in many cases, has paid to sponsor the workers. If they lose their jobs, they are stuck in bureaucratic limbo. An INS spokeswoman says they don't have to leave the country right away, but they can't work until they find another company to apply to sponsor them. And the backlog of applications currently runs as long as 90 days. (voice-over): This software developer from India was out of work for a while in January.</s>UNIDENTIFIED MALE: It was a nightmare for me. I was desperately looking for jobs and the problem is, the cost of living is high and you can't afford that shelling out money out of your pocket without a job.</s>HATTORI: Morale Christna Devoracondev (ph) belongs to an organization supporting H1-B workers.</s>UNIDENTIFIED MALE: I should not be concerned out of</s>HATTORI: The INS says reinstating H1-B status for displaced workers will be on a case-by case basis, depending on whether there are extraordinary circumstances beyond their control. Morales says that what's really needed is a new policy, giving H1-B visa holders three-year status regardless of job changes.</s>UNIDENTIFIED MALE: There should not be any concerns about whether I am in between jobs for week or ten days or a month or three months. You know, let the free market decide.</s>HATTORI: Let H1-B workers decide, he says, whether to stay and find work, or leave if there is none.</s>HATTORI: Another phenomenon resulting from the dot-com downturn: Workers who left solid jobs for ones that turned out to be, well, "virtual," are finding they can go back.</s>SUSAN SHIPLEY: Susan Shipley.</s>HATTORI (voice-over): Like many others in the San Francisco Bay area, Susan Shipley was enticed by the excitement of the new economy.</s>SHIPLEY: In the bay area there were so many stories of people leaving and going to work for start-up companies and getting enormously wealthy overnight, and having fun doing it.</s>HATTORI: So last summer she left her job as an executive at Levi Strauss after being recruited to join Scient, an Internet consulting firm. Today, just six months later, she is back at Levi's after a whirl-wind taste of working at Internet speed.</s>SHIPLEY: There was such an enormous amount to do that most days involved some sort of triage. You identified the stuff that was just not going to get done.</s>HATTORI (on camera): The phenomenon is called "boomeranging." employees who left traditional bricks and mortar companies for, in some cases, risky Internet start-ups, returning to the safety of their old employers. Levi Strauss has brought back as many as two dozen people who left for the dot-com world. And the company is glad to have them.</s>NANCY PHILIPS, STAFFING MANAGER, LEVI STRAUSS: They are trained well, they understand company, and how</s>HATTORI: With an estimated 35,000 dot-com layoffs in recent months, there is no shortage of available workers, who network at so- called "pink slip" parties. At Brain Trust, a recruiting company specializing in high tech, officials say some dot-comers have no desire to go back to a traditional business environment.</s>REBECCA CAIN, RECRUITER: Job seekers in general are being choosier, and staying on the market a little bit longer, both because of the market as well as because of their own desire to find a really good fit.</s>HATTORI: Susan Sheeply (ph) chose to come back, just as the dot- com downturn became clear. While she doesn't regret making the jump...</s>SHEEPLEY (ph): Will I do that again? Will I, you know, jump again? I would probably not.</s>HATTORI: It was an adventure, she says, but not one she's likely to repeat.</s>HATTORI: Still ahead, if students can't go to school, bring the school to the students. We'll show you how that works when CNN.COM returns.</s>HATTORI: Computers may seem like cold boxes of technology, but they're capable of making warm human connections. Allison Tom has the story of one such connection, making a big difference in the life of one young boy.</s>ALLISON TOM, CNN CORRESPONDENT (voice-over): 12-year-old Florian is a leukemia patient at Bonn's University Hospital in Germany. He lives here while he receives chemotherapy. And since he can't physically attend school, school is being brought to him virtually, by way of a Web cam.</s>FLORIAN (through translator): It's good for children who can't attend school that often, because they are able to participate and see their classmates once in a while. It's great to watch your friends and to find out who the new clown of the class is, and whether the teacher has learned anything new. Yes, I actually like the idea.</s>TOM: Doctors at the hospital say participating in an academic setting and being among friends is essential for the children. Lessons are shown through a Web cam that's installed inside the classroom.</s>HELMUT RADLANSKI, TEACHER (through translator): At first, the pupils were a little excited because of this new situation, but after a short while they got used to it, and now they barely realize the camera is filming behind them.</s>TOM: Students are able to keep up with their math, reading and other subjects so they won't lag behind.</s>PROFESSOR UDO BODE, BONN UNIVERSITY: We want to cure not only the disease, but we want to have a healthy child after the treatment, hopefully cured, and therefore social integration during treatment will augment this integration afterwards and probably result in healthy children.</s>TOM: Students at the hospital use their laptop computers to interact and answer questions raised in class. And whether they're right or wrong, teachers will respond back via the Web cam.</s>HATTORI: Today, Web cams, tomorrow perhaps holographic virtual teachers. The uses of computer technology expand daily. We asked Bob Metcalfe, founder of 3Com, the folks who brought you the Palm Pilot, just one question: what is the next big role computers will play in our lives? The answer when we return.</s>HATTORI: Now, back to CNN.COM. Here's "Just One Question": what is the next big role computers will play in our lives?</s>BOB METCALFE, FOUNDER, 3COM: The good news is that computers are disappearing, they're going away, we will stop referring to it as a computer more and more, as they become ambient everywhere. Now, there were eight -- this year, there will be eight billion microprocessors shipped, and only 2 percent of those will appear in desktop personal computer, which leads to the question: where are the other 98 percent going? And they are going into the woodwork. They are going into the little robots all around us, into the ambience in our cars and in our appliances, everywhere.</s>HATTORI: A computerized blender? We'll leave you to ponder that for now. That's all the time we have. Until next week, you can use your microprocessor to send us e-mail. The address is thedot@cnn.com. Thanks so much for watching this time, for all of here at THE DOT, I'm James Hattori. We'll see you next week.