The heat in Max Butler's safe house was nearly unbearable. It was the equipment's fault. Butler had crammed several servers and laptops into the studio apartment high above San Francisco's Tenderloin neighborhood, and the mass of processors and displays produced a swelter that pulsed through the room. Butler brought in some fans, but they didn't provide much relief. The electric bill was so high that the apartment manager suspected Butler of operating a hydroponic dope farm.
But if Butler was going to control the online underworld, he was going to have to take the heat. For nearly two decades, he had honed his skills as a hacker. He had swiped free calls from local telephone companies and sneaked onto the machines of the US Air Force. Now, in August 2006, he was about to pull off his most audacious gambit yet, taking over the online black markets where cybercriminals bought and sold everything from stolen identities to counterfeiting equipment. Together, these sites accounted for millions of dollars in commerce every year, and Butler had a plan to take control of it all.
Fraudsters rack up millions of dollars in merchandise using fake credit cards with legit numbers hacked off the Internet. Detective Bob Watts of Newport Beach PD shows how it's done.
Most illegal online loot was fenced through four so-called carder sitesmarketplaces for online criminals to buy and sell credit card numbers, Social Security numbers, and other purloined data. One by one, Butler took them down. (This story, like the rest of this article, has been reconstructed using court documents and conversations with friends and associates; Butler declined to be interviewed.)
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