Testimony by Jana D. Monroe, Assistant Director, Cyber
Division, FBI
Before the House Judiciary Committee
Subcommittee on Courts, the Internet and Intellectual Property
July 17, 2003
"The FBI's Cyber Division"
Good
morning. I would like to thank Chairman Smith, Ranking Member
Berman, and members of the Subcommittee for the opportunity
to testify today. We welcome your Subcommittee's leadership
in dealing with the serious issues associated with the theft
of intellectual property. Your Subcommittee's bill, the "Piracy
Deterrence and Education Act of 2003," is a positive
step toward making Americans aware of the security, privacy
and criminal issues related to trafficking in copyrighted
works. My testimony today will address the activities of the
FBI's Cyber Division in relation to the theft of intellectual
property, including music and movies.
A July
11th story in the Chicago Tribune relates only a small segment
of crime on the Internet. The article discusses the thousands
of computers that have been hijacked by purveyors of pornographic
web sites. The hijackers use computers with high speed connections
to host their pornographic sites, unknown to the people who
own the computers. The hijackers could have found those computers
through observation of peer to peer networks, where users
can take advantage of high speed connections to rapidly download
copyrighted music and videos. Hijacking someone's computer
though, is just one of the secondary crimes resulting from
theft of intellectual property.
Your
Subcommittee's bill, the "Piracy Deterrence and Education
Act of 2003," is an important bill because it focuses
on several aspects of Internet theft. You correctly note that
trafficking in copyrighted works has a great impact in many
segments of our economy. When you point out that over two
billion files are transferred each month, it is easy to see
why so few believe there will be consequences for sharing
copyrighted files. Few realize that their security and privacy
are at risk when they share files. The vast majority of file
sharing occurs over peer to peer networks.
P2P
Sharing
P2P
networks primarily serve as a "come and get it"
resource on the Internet. In using such a utility, the user
specifically searches for the item they want, e.g. music,
images, or software. The most significant criminal activity
involving P2P sharing centers largely on intellectual property
rights (music and software piracy) matters, an area in which
the FBI has been working closely with private industry. The
FBI has also seen an increase in P2P sharing of child pornography
files.
The FBI
has seen an increasing number of instances where a victim
has determined that a Trojan/back door was installed on their
computer during a download from a P2P network. In some cases,
the victim also learned that personal and financial information
had also been removed from their computer via the back door.
In addition
to traditional Trojans/back doors, the FBI has seen an increase
in matters where certain "bots" (active Trojans)
have been installed inadvertently via a P2P download. In these
instances, the victim computer, via the bot, essentially reports
to a designated Internet relay chat (IRC) site, awaiting further
instructions from its creator. The creator of the bot will
often use the compromised computers to launch coordinated
denial of service attacks against a targeted site or sites.
These bots could also be used to retrieve sensitive information
from victim computers in furtherance of an identity theft
scheme.
A person
using P2P utilities for unauthorized or illegal purposes is
not as likely to tell the FBI that an exploit (back door)
was found on their system, or that as a result, certain personal
or financial information may have been taken. The FBI has
been made aware of instances where Trojans or bots have been
found on computer systems where P2P programs are present,
and where certain personal, financial or other sensitive information
has been taken.
The
"Piracy Deterrence and Education Act of 2003"
The
"Piracy Deterrence and Education Act of 2003" is
legislation that the FBI believes is the first step toward
eliminating the illegal practice of sharing copyrighted material.
The bill orders the FBI to develop a deterrence program and
facilitate information sharing among law enforcement agencies,
Internet service providers and copyright owners of information.
We agree that the FBI must work together with the private
sector, and we agree that education and deterrence are the
first two moves in this war on intellectual property theft.
We hope you will be pleased to know that the FBI has been
working on this problem for quite some time. The FBI and the
Recording Industry Association of America are now in the final
stages of completing a Memorandum of Understanding regarding
the FBI Intellectual Property Rights Warning Program. This
MOU allows for the Recording Industry's use of the FBI seal
in the same way that it has been used as a warning on videotapes,
DVDs and movies for years.
We have
also drafted a document titled: "An Open Letter Regarding
Illegal Uses and Vulnerabilities Associated with Peer to Peer
Networks." This document will serve as the first step
in educating users and parents of users of peer to peer networks.
We will distribute this document nationwide, and it will be
posted on the FBI's website. The letter leave no doubt as
to the illegality of sharing copyrighted works without authorization
and distributing child pornography or obscene material over
the internet. The letter also addresses the vulnerabilities
exposed when using P2P networks.
Investigation
of intellectual property rights violations is only a small
part of what the Cyber Division is charged with accomplishing.
The FBI is in a unique position to respond to cyber crimes,
because it is the only Federal agency that has the statutory
authority, expertise, and ability to combine the counterterrorism,
counterintelligence, and criminal resources needed to effectively
neutralize, mitigate, and disrupt illegal computer-supported
operations.
The
FBI's Cyber Division
The
FBI's reorganization of the last two years included the goal
of making our cyber investigative resources more effective.
In July 2002, the reorganization resulted in the creation
of the FBI's Cyber Division. In prioritizing Cyber Crime,
the FBI recognizes that all types of on?line crime are on
the rise.
The
Cyber Division addresses cyber threats in a coordinated manner,
allowing the FBI to stay technologically one step ahead of
the cyber adversaries threatening the United States. The Cyber
Division addresses all violations with a cyber nexus, which
often have international facets and national economic implications.
The Cyber Division also simultaneously supports FBI priorities
across program lines, assisting counterterrorism, counterintelligence,
and other criminal investigations when aggressive technological
investigative assistance is required. The Cyber Division will
ensure that agents with specialized technology skills are
focused on cyber related matters.
At the
Cyber Division we are taking a two-tracked approach to the
problem. One avenue is identified as traditional criminal
activity that has migrated to the Internet, such as Internet
fraud, on-line identity theft, Internet child pornography,
theft of trade secrets, intellectual property rights violations
and other similar crimes. The other, non-traditional approach
consists of Internet-facilitated activity that did not exist
prior to the establishment of computers, networks, and the
World Wide Web. This encompasses "cyber terrorism,"
terrorist threats, foreign intelligence operations, and criminal
activity precipitated by illegal computer intrusions into
U.S. computer networks, including the disruption of computer
supported operations and the theft of sensitive data via the
Internet. The FBI assesses the cyber-threat to the U.S. to
be rapidly expanding, as the number of actors with the ability
to utilize computers for illegal, harmful, and possibly devastating
purposes is on the rise.
The
mission of the Cyber Division is to: (1) coordinate, supervise
and facilitate the FBI's investigation of those federal violations
in which the Internet, computer systems, or networks are exploited
as the principal instruments or targets of terrorist organizations,
foreign government sponsored intelligence operations, or criminal
activity and for which the use of such systems is essential
to that activity; (2) form and maintain public/private alliances
in conjunction with enhanced education and training to maximize
counterterrorism, counterintelligence, and law enforcement
cyber response capabilities, and (3) place the FBI at the
forefront of cyber investigations through awareness and exploitation
of emerging technology.
To support
this mission we are dramatically increasing our cyber training
program and international investigative efforts. Consequently,
specialized units are now being created at FBI Headquarters
to provide training not only to the 60 FBI cyber squads, but
also to the other agencies participating in existing or new
cyber-related task forces in which the FBI is a participant.
This training will largely be provided to investigators in
the field. A number of courses will be provided at the FBI
Academy at Quantico.
The
importance of partnerships like law enforcement cyber task
forces and alliances with industry can not be overstated.
Those partnerships help develop early awareness of, and a
coordinated, proactive response to, the crime problem. The
cyber crime problem is constantly changing, requiring law
enforcement to develop a flexible and dynamically evolving
approach as well. Critical infrastructures and e?commerce
are truly on the "front lines" and most often better
positioned to identify new trends in cyber crime. Similarly,
because of the actual and potential economic impact of cyber
criminals, private industry has a vested interest in working
with law enforcement to effectively detect, deter and investigate
such activity.
The
Cyber Division is also embarking on a significant effort to
improve our overseas investigative capabilities by sending
FBI personnel to help investigate cyber crimes when invited
or allowed into a host country. .We believe this high tech
training and overseas investigations are justified by the
increasing internationalization of on-line crime and terrorist
threats.
Through
the Internet Fraud Complaint Center (IFCC), established in
1999 in partnership with the National White Collar Crime Center
(NW3C), the FBI has appropriately positioned itself at the
gateway of incoming intelligence regarding cyber crime matters.
The IFCC receives complaints regarding a vast array of cyber
crime matters, including: computer intrusions, identity theft,
intellectual property rights violations, economic espionage,
credit card fraud, child pornography, on?line extortion and
a growing list of internationally spawned Internet fraud matters.
The IFCC received 75,000 complaints in 2002, and is now receiving
more than 9000 complaints per month. We expect that number
to increase significantly as the American and international
communities become more aware of our mission and capabilities.
Later this year, the IFCC will be renamed as the Internet
Crime Complaint Center (IC3) to more accurately reflect its
mission.
The
FBI and the United States Customs Service (USCS) co-lead the
National Intellectual Property Rights Center (IPR Center).
The IPR Center strives to be the FBI and USCS hub for the
international collection, analytical support and dissemination
of intelligence involving IPR violations. These violations
include theft of trade secrets, copyright infringement, trademark
infringement and signal theft. Specifically, the IPR Center
gathers IPR intelligence from a variety of sources, analyzes
the intelligence, and provides a coordinated flow of information
for use by the FBI and USCS field components.
Cyber
crime continues to grow at an alarming rate, and intellectual
property rights violations are a major part of the increase.
Criminals are only beginning to explore the potential of crime
via peer-to-peer networks while they continue to steal information
by hacking, insider exploitation and social engineering. The
FBI is grateful for the efforts of your Subcommittee and others
dedicated to the safety and security of our Nation's families
and businesses. The FBI will continue to work with your Committee
and aggressively pursue cyber criminals as we strive to stay
one step ahead of them in the cyber crime technology race.
I thank
you for your invitation to speak to you today and on behalf
of the FBI look forward to working with you on this very important
topic.
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