Euro conversion goes smoothly, but tests for IT remain

A federal judge in New Jersey rejected a defense motion last week to suppress computer evidence gained in a U.S. Federal Bureau of Investigation (FBI) case against an accused Mafia loan shark, possibly clearing a path for the government to use secretly installed keystroke logging tools to defeat encryption.

FBI agents acting with a warrant in May 1999 installed a keystroke logging device on the computer of Nicodemo S. Scarfo Jr., hoping to record a password for a file encrypted with PGP (Pretty Good Privacy) software. Scarfo's attorneys hoped to suppress the evidence as unconstitutional, a violation of the U.S. Constitution's Fourth Amendment protection against unreasonable search and seizure. The defense also objected to the government's effort to keep the workings of the keystroke logger secret.

Federal prosecutors call Scarfo a mobster -- Scarfo's father is jailed mob boss Nicodemo S. "Little Nicky" Scarfo Sr. The DOJ charged the younger Scarfo with racketeering, illegal gambling and loan sharking. Prosecutors invoked the Classified Information Protection Act in August of 2000, asserting that the technical details of the computer keystroke logging tool must remain a secret in the interest of national security, a move more typically associated with protecting military or espionage secrets like those involved in the Wen Ho Lee nuclear secrets case or the spy case of Robert Hanssen, who was an FBI agent.

The warrant permitting the keystroke logger to be installed specifically prohibited the government from monitoring Scarfo's Internet communication. Scarfo's attorneys claimed that by keeping details of the logger's mechanisms secret, the defense could not determine if the warrant had been breached.

"We didn't capture any kind of electronic communications," said Ronald Wigler, an assistant U.S. attorney for the New Jersey district. While the judge received a classified briefing on the workings of the keystroke logger, he concluded based on unclassified parts of the briefing that no communication interception occurred, Wigler said.

U.S. District Court Judge Nicholas H. Politan rejected defense arguments in his ruling, indicating that the summary description of the keystroke logger made public in court meets the defendant's need to know what facts or documents the prosecutors are likely to use at trial to make their case.

"We must be ever vigilant against the evisceration of Constitutional rights at the hands of modern technology," Politan wrote in the ruling. "Yet, at the same time, it is likewise true that modern-day criminals have also embraced technological advances and used them to further their felonious purposes."

Scarfo's attorneys plan to file a motion asking the judge to reconsider.

"The government's philosophy is that you shall have no secrets that they cannot reach, and I think that is a chilling philosophy," said Norris Gelman, a Scarfo defense lawyer in Philadelphia.

Privacy advocates objected to the nature of the government's intrusion into Scarfo's office -- done secretly with no notice to the target until long after.

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