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Mar 15, 2005

The Legal Line

Ed Maldonado

Dear Legal Line:

This is just a friendly professional inquiry. I am also an attorney, actually a solo practitioner, and I represent mostly small upstart VoIP service providers. I have several incidents where my clients were hacked at their gateways and were left with the bills for tens of thousands of dollars. We have identified the hacking company through our own investigation and are now advancing on claims on the basis of civil theft, intentional interference with a business relationship and unjust enrichment. Are there any other claims that you are aware of that might be useful in such instances? I would like to pack the claims as completely as possible. Your input is welcomed.



Fellow Counsel



Dear Fellow Counsel:

Thank you for your inquiry and I hope this helps. I am not sure if your claims are federal or state, however, at the federal level there is a statute with remedy in both civil and criminal courts depending on how you wish to proceed. This is under United States Code Tile 17 (the precise cite is 17 USC 1030 (a) (4)) and it covers unauthorized access into a private or public parties protected network for fraudulent purposes or for access causing damage to the owner of the network. Since VoIP networks function like most other private protected networks, there may be room for applying the statute in federal cases. I suggest you research it for your jurisdiction before advancing it, as there is a substantial amount of case law that has developed over the past three years in several jurisdictions. Most of this supports the claims of victims but there are some anomalous rulings in a few jurisdictions that place some limits.

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The long and short of the federal statute itself is simple. Should an authorized party access a protected computer network causing damage to the owner, the owner has recourse under civil or criminal causes. Since the focus of your claims at this point seem to be damages, you may wish to explore the civil side. The requisites are: 1) Un-authorized access by a party to a protected network of the victim; 2) Identification with certainty of the unauthorized accessing party; 3) Damages being caused in excess of $5,000.00 USD because of the unauthorized access per incident or cumulative. The scope of the statute also includes users going beyond their authorized access. For example, a tech reprogramming a limited access password to gain full access to a network and thereafter causing damages. The civil cause portion of the statute allows you to bring action on the unauthorized accessing party for damages in federal district court where the hacker resides. It can eliminate some of the jurisdiction chasing that can occur when the hacker in an out-of-state offender. Causation and damages are the real key to success of these types of claims. So if you have the proof, it will make a strong claim to use to seek recovery.



The criminal side is based upon the same elements with the added element of criminal or fraudulent intent. The Department of Treasury is generally responsible for investigating such incidents and it largely falls upon the Secret Service. Usually this involves reporting the incident to local law enforcement and being referred up the chain of law enforcement jurisdiction. I, however, believe that an inquiry to the local Secret Service branch or FBI would not hurt in order to get the ball rolling in an investigation. Thank you for thinking of Legal Line.



Good Luck and Success in the Industry.



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