Financial Losses

If you had the power to break into some computer files, what would you do? Change your grades, erase some library fines, or maybe add a few zeros to your bank account? For some computer hackers, that's only the beginning. They can crack code and steal big money, even threaten our national security. Alberto Rosas reports on the growing computer underworld.

"As the world moves into cyberspace and as all money flows into cyberspace, well, crime follows money and you're going to see it there," says Richard Power of the Computer Security Institute.

And as the Internet expands, the opportunity to make illegal profit grows with it. Thousands of cyber-criminals are taking advantage of what is still mostly uncharted territory.

"Hackers can do just about anything they want to do," says Keith Lowrey, San Jose Police Department. "They can alter your credit, they can steal your identity."

One 18-year-old broke into a financial institution, generated a credit card for himself, and went on a vacation to Hawaii. Other people have been known to try and find ways to hack and counterfeit lottery tickets. And in one case, a gang of international crackers broke into Citibank's wire transfer software and stole 2.8 million dollars.

But not everyone hacks for profit. In fact, those who do are called crackers. But hackers crack code simply for the challenge.

"It's knowledge," says software analyst John Paul Nollman. "It's the excitement of learning things. You don't really see people in the hacker community who don't have this passion for going out and finding things out, finding out all sorts of information, especially information that we're not supposed to know."

The sport of hacking involves breaking into a protected computer file, taking a look around, and maybe even leaving a calling card.

"Maybe they just want to put their name in the Message of the Day when you log in or something," adds Nollman. "It's real simple. It's getting in that's interesting. It's not what you do in there, it's not what you don't do in there, it's just the act of getting in."

But all files are not created equal. The prized sites for a hacker are the CIA, the FBI, and the Pentagon.

"The harder it is to discover that information, the more interesting it is to them," says Nollman. "If you go and publicize a machine that has a name like, of course it's going to attract attacks."

And the Pentagon does seem to entice people to break in. Just in the past year, there were over two hundred thousand break-in attempts. Not everyone gets caught, but some who tried too hard found the FBI on their doorstep.

Makaveli and Too Short

You wouldn't think the FBI would track down some hackers in sleepy Cloverdale, California, but hackers are everywhere. They call themselves Makaveli and Too Short, and claim to have broken into hundreds of servers run by the Pentagon. It's a job so extensive that one federal official called it the most organized and systematic attack ever discovered.

"I think this was, more than anything, a serious wake-up call," says Deputy Defense Secretary John Hamre.

The FBI raided their homes last month, armed with search warrants possibly linking them to break-ins of at least eleven military computer systems. But Makaveli and Too Short are just high school students, and no one suspected them capable of a federal crime.

A classmate describes one of the hackers as "kind of reserved...not as open as other kids. The main thing he likes to do is get on the computer and go crazy with this stuff."

During the day, Makaveli and Too Short used their skills to build Cloverdale High's computer network.

"They're good kids," says teacher John Hudspeth. "They've helped me out a lot this summer, and they're always there to help out in the lab when I need help."

But at night they were logging hundreds of hours online cracking codes. According to the Pentagon, they didn't damage any files.

So why did they do it? In an interview with an online publication, Makaveli said,

"It's power dude. You know power."

It turns out that Makaveli and Too Short weren't acting alone. A short time later, the FBI arrested their ringleader -- a hacker named Analyzer who was operating out of Israel.