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US arrests group for hacking phonelines to fund terror

US and Italian authorities have arrested a group of hackers who stole from phone companies around the world to fund Islamic terrorist activities in South Asia.

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US and Italian authorities have arrested a group of hackers and five Pakistani co-conspirators who stole from phone companies around the world to fund Islamic terrorist activities in South Asia.

A federal grand jury in New Jersey indicted three hackers on Friday for providing Pakistanis in Italy with access to thousands of stolen phone lines. Payments to the hackers — about $100 a hack — were channelled through the Madina Trading Company that allegedly financed the communications of the terrorists in last year's Mumbai attacks. FBI agents had helped Mumbai investigators trace payments made through Madina to internet-based phone accounts used by the Mumbai attackers to make calls to their handlers.

The US indictment charges hackers Mahmoud Nusier, 40, Paul Michael Kwan, 27 and Nancy Gomez, 24 — with conspiracy to commit wire fraud and unauthorised access to phone codes and computer systems. All three were earlier arrested by enforcement agencies in the Philippines. US officials are now seeking their extradition to serve out what could be a maximum of 20 years in prison.

"This was an extensive and well-organized criminal network that worked across continents," said New Jersey's Acting US Attorney Ralph Marra Jr, in a statement. "The hackers we've charged enabled their conspirators in Italy and elsewhere to steal large amounts of telecommunications' capacity, which could then be used to further or finance just about any sort of nefarious activity here or overseas."

Meanwhile, Italian officials working closely with their US counterparts said in a press conference that the proceeds from the group's telephone scam funded Islamic fundamentalist groups in South Asia. Even as the indictments were being reeled off in the US, Italian police swooped down on five Pakistanis in dawn raids on phone service operators in Italy. They allegedly bought the stolen telephone lines and paid the hackers to break into phone systems in the US, Australia, Canada and Europe.

The Wall Street Journal reported that among the five arrested in Italy were a husband-and-wife team who managed call centres in Brescia, Italy— Mohammad Zamir and Shabina Kanwal. Pakistani conspirators, including the owner of Madina, allegedly sold services from phone lines that were stolen and used the funds to support terrorist activities, according to Italian authorities. According to legal documents, the bulk of the telephone traffic routed through the hacked lines was destined for Saudi Arabia, Pakistan, Afghanistan, Egypt and India.

Computerworld cited the US Attorney's office saying the thieves routed more than $55 million worth of telephone calls over phone networks in the US.

The hackers would probe an organisation's electronic phone networks to find unused or insufficiently password-protected phone lines and reprogram them to provide remote access to their counterparts in Italy, according to the US indictment. They would then sell the phone service through call centers and via phone cards, pocketing the profit. The case shows that large profits went into financing terror in South Asia.

Erez Liebermann, the assistant US attorney who is prosecuting the case, told the WSJ: "With the connections outlined in the Italian and Philippines side, we have now moved into the realm of hacking as a financing mechanism for terrorism."
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