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FBI Defend Raids On Texas Datacenter
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.'"
I know Slashdot is sometimes slow to report on news, but come on...
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!
Cory Doctorow talking about cloud computing makes as much sense as George W Bush talking about electrical engineering.
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
"Hi. This is my friend, Jack Shit, and you don't know him." - Lord Kano
Liquid motors loses appeal after raid
A condensed summary of what happened
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.
Sigs are too short to say anything truly profound so read the above post instead.
Course not, they'll never catch on...
SSC
They have data centres in Texas?
I've calculated my velocity with such exquisite precision that I have no idea where I am.
I guess that's what they call it when somebody brings the state library's book back.
I've calculated my velocity with such exquisite precision that I have no idea where I am.
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.
Read radical news here
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.
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.
Found a clean copy of the text; have restored the embedded links here:
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.
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.
The FBI weren't engaged in "debt collection", they were investigating allegations of fraud.
There are two contradictory stories here, one from Faulkner, and one from the FBI, but assuming the FBI was, at least originally, acting in good faith (and there's no reason to believe they weren't, the FBI doesn't usually make a habit of inventing stories against random people):
The FBI believed Faulkner was setting up front companies to sell telecom services. The front companies would collect the money from their subscribers, run the services for as long as they could get away with without paying their suppliers, and then when the suppliers cut them off, they'd go bust - while the money itself had been pocketed by the people running the scam. If I understand it correctly, the money was funnelled out of these front companies by having them pay one, and only one, supplier, the operators of the datacenter - who happened to be themselves.
Why did the FBI think they were shell companies set up specifically to defraud the suppliers? Well, like I said, only the data center was getting any funds (if these companies were acting in good faith, there's no reason why only the data center would ever get paid), and there was deliberate obscufication being done to hide the true identities of those operating the front companies - for example, the FBI saw an email allegedly from Faulkner describing a process of bribing homeless people with $100 and drink to sign their names as directors. Faulkner's name wouldn't appear to be associated with the front companies, despite the fact he was apparently running them.
So, there you go: fraud, not debt collection. It's not that Faulkner owed money, it's that he allegedly invented a scheme to obtain services by deception, for profit. And, again, assuming the FBI were acting in good faith, it's not hard to understand why the FBI believed they needed every computer in the data center, given that they believed a significant number of the data center's "clients" were actually fake businesses that were part of the fraud.
You are not alone. This is not normal. None of this is normal.