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Data Center Raid About Unpaid Telco Fees
Posted by
timothy
on Sat Apr 04, 2009 03:30 PM
from the that's-what-they-want-you-to-believe dept.
from the that's-what-they-want-you-to-believe dept.
craig writes "CBS11 News reports that the raid on Core IP networks is in the result of an investigation into unpaid telco access fees paid by CLECs and VoIP carriers to terminate calls on their networks. They also report that this raid is linked to the March 12th raid on Crydon Technology's datacenter, which also hosted VOIP providers. Anyone in the telco business will tell you access fees to other carriers are a total mess and lots of carriers have unpaid balances out there. It gives you the feeling that the FBI is acting as a collection agency for AT&T and Verizon."
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FBI Seizes All Servers In Dallas Data Center 629 comments
1sockchuck writes "FBI agents have raided a Dallas data center, seizing servers at a company called Core IP Networks. The company's CEO has posted a message saying the FBI confiscated all its customer servers, including gear belonging to companies that are almost certainly not under suspicion. The FBI isn't saying what it's after, but there are reports that it's related to video piracy, sparking unconfirmed speculation that the probe is tied to the leaking of Wolverine."
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Recession (Score:2)
Late payments are one of the signs that a company is about to go under. Is this another victim of the recession?
Re:Recession (Score:4, Interesting)
Not really, reciprocal arrangements are made by telecommunications companies a thousand times every day, to say that they are complex is perhaps a bit of an understatement. Usually they work out pretty well and everyone is happy, but sometimes someone gets an agenda, or just plain greedy and this is the end result.
Parent
Backwards (Score:4, Insightful)
The main sign that a company is about to go under is when they get the law involved. For some examples see the record labels, film studios and patent trolls. Even Apple is infamous for being excessively litigious prior to their current windfall.
Normally business arrangements are reciprocal and it's in the best interests of a company to avoid publicizing that their partners are in breach of a contract. There are plenty of collections agencies in the private sector that they could have consulted instead, but instead it's being treated as a criminal matter. This is the sort of behavior you see when a company realizes that their business model is flawed.
Parent
Re:Recession (Score:4, Informative)
Late payments are one of the signs that a company is about to go under.
Not if lawyers are involved?
I'm seeing more and more of this in non-related businesses, but what it boils down to is this:
Customer finds a discrepancy and needs to get it worked out, so they call an audit and find a MAJOR snafu. To protect themselves, they bring in the lawyers.
All payments stop until the issue is resolved. Usually, the money is placed into an escrow during the legal proceedings, especially if the customer has the money to pay the bill.
Provider's lawyers work with the customer, but this takes time. Take too long, and the statute of limitations will run out.
More time passes. Customer has the money and can pay, but lawyers say no.
Provider sends a final notice: pay up.
Customer sends a letter: Our lawyers aren't done, and we can't send the money yet. Look! The money is right here in this account, just WAIT A FEW MORE DAYS!
Provider turns to their lawyer: If you wait one more day, the statute of limitations will expire and they could walk away scott free.
Now the provider has no choice? They MUST take action to protect their interests, so they seize the assets of the customer in some fashion. Most of the time this involves filing a lien on those assets, but in some cases-like this one-they can physically collect those assets.
Parent
Favors (Score:5, Interesting)
It gives you the feeling that the FBI is acting as a collection agency for AT&T and Verizon
Well, AT&T and Verizon did "favors" - Patriot Act - for the FBI, perhaps this is the FBI payin' them back?
Re:Favors (Score:4, Interesting)
Parent
Re:Favors (Score:5, Insightful)
In that case, the NSA is probably on the way as well.
Or long gone without a trace!
Parent
Re: (Score:2)
Re:Favors (Score:5, Insightful)
TFA mentions Verizon going to the FBI months ago, believing it had discovered a plan to defraud the telcos out of fees (i.e. illegal access to and use of the telephone network, hence the FBI involvement).
Seriously, it's days like this I hate Slashdot.
Parent
Re:Favors (Score:5, Insightful)
Parent
Re:Favors (Score:5, Insightful)
Perhaps we should all quit contributing to the spin until the exact reasons for this raid are resolved.
The causes still seems pretty speculative, at this point. What's not speculation is that the FBI disrupted a whole lot of businesses in pursuit of what was apparently something that didn't involve all of them - which is wrong.
Seriously, it's days like this I hate Slashdot.
It's times like this that make me despise media journalists who don't bother to wait until the facts come out to get a story out, because they have to get "the scoop".
Why, yes, I just finished re-reading Varley's "Steel Beach". Why do you ask?
SB
Parent
Re:Favors (Score:4, Insightful)
There are stupid people everywhere, it's good that you're one of few to check sources and actually think about what you read. Keep it up, keep complaining - we need more of you.
Parent
still seems fishy (Score:4, Interesting)
Mr Simpson said that he found out that his home was raided as well.
You don't raid the HOME of the CEO of a company because you think their customers are involved in fraud. That makes less sense than the copyright violation speculation.
Parent
Re:Favors (Score:5, Insightful)
Oh COME ON. I know the feds have a bad rap on slashdot, but now you're accusing them of being back-scratching goons on behalf of AT&T?
"Court documents show it's all part of an alleged massive fraud scheme against AT&T and Verizon."
It's right there in the frikkin article. Large scale fraud is indeed the purview of the FBI, no conspiracy required.
Though now I'll get modded down for this won't I. I better come up with some ludicrous conspiracy scheme instead.
Verizon and AT&T did what they were told by our government overlords, and were protected. These companies didn't hand over their VOIP logs to the NSA like good little citizens, and now they have to pay. No doubt those records are on their way to the NSA right now! I bet they're looking for records of terrorist activies, and will just end up poring over the comm logs of honest upstanding americans, and sticking something on them when they don't find anything. And of course none of the mainstream media are covering it, they're in on it!
There, that should do it.
Parent
Re: (Score:3, Insightful)
However, one of the responsibilities that we have as possessors of the right to bear arms is to not start shooting with out good reason and clear heads. You, I, and everybody else on Slashdot don't know yet what the purpose of the fed's action was. Maybe the CEO is a criminal, and a number of the businesses are fronts. Maybe there was some clear and eminent danger that required a (legally warranted) sear
Looking forward to more inflammatory articles (Score:5, Interesting)
Re:Looking forward to more inflammatory articles (Score:5, Insightful)
Incidentally, isnt it sort of in the FBI's realm to investigate large-scale fraud?
Yes. We won't have any idea what the truth is until someone gets a copy of the federal warrants used in the raid, or until we get information that charges are being filed.
Parent
Re:Looking forward to more inflammatory articles (Score:4, Funny)
Yes. We won't have any idea what the truth is until someone gets a copy of the federal warrants used in the raid, or until we get information that charges are being filed.
In other words, we don't know the real story and people are dreaming up uninformed speculation based on their personal political biases? I'm shocked.
Parent
Re: (Score:2)
Re:Looking forward to more inflammatory articles (Score:5, Insightful)
Incidentally, isnt it sort of in the FBI's realm to investigate large-scale fraud?
Yes. But Slashdot users have a propensity for Libertarian anarchism.
If it's the FBI doing its job in enforcing copywrite law then they're henchmen for the recording industry Mafiaa.
If it's the FBI doing its job in enforcing fraud then they're henchmen for the telecommunications industry.
Remember the government should be small to non-existant. And instead of changing legislation we should just be ignoring the laws that are on the books.
Is it reasonable that a kid downloading a song is a felony? No. But that's a legislative and judicial issue. The FBI is in the executive branch and its job is to respect and uphold the law. That means if someone is believed to be breaking the law then they're obligated to enforce it.
What's the alternative? Police officers deciding to selectively enforce laws on a case by case basis (which unfortunately does happen). I would much prefer the executive branch was consistent in enforcement instead of cherry picking cases than them attempting to make decisions of guilt and innocence before there being a fair and open trial. Obviously there has to be some exceptions to this rule (otherwise everyone would get arrested and have a day in court every time a crime is commited) but by and large I support the FBI actually doing its job when fraud is reported.
Parent
Re:Looking forward to more inflammatory articles (Score:5, Interesting)
/. wasn't upset because the FBI was enforcing the law. Most /.ers were upset because the FBI went in on a trumped up over-broad warrant and seized an entire data center. If they legitimately need to seize voip servers, that may be acceptable. But it's not okay to take servers of everyone who happened to be unfortunate enough to be leasing servers in the same datacenter.
There's another angle to this as well. Would the FBI ever seize telco equipment that belonged to an ILEC? No. The FBI and the courts would recognize that telephone is an essential service, and you can't just cut off someone's telephone service because their provider has been naughty. So if that's true for an ILEC, why isn't it true for a voip provider? Telephone delivered via voip is still an essential service. It's the best way to request emergency services (911). So why did the FBI cut off voip service to customers because their provider had been naughty? This is seriously unacceptable behavior.
Parent
Re: (Score:2)
Maybe because VOIP has NEVER BEEN A GOOD 911 OPTION.
What happens when the power goes out?
What happens when the internet goes out?
What happens when...
The list goes on and on and on and on which is why if you're really concerned about 911 you should have at least one land line phone plugged into an outlet. Why? Because the FBI doesn't need to worry about VOIP service. You should have a 911 phone available.
If 911 was REALLY a problem then Comcast shouldn't be able to cut anyone's internet access... ever.
Re: (Score:3, Interesting)
Re:Looking forward to more inflammatory articles (Score:4, Interesting)
Maybe because VOIP has NEVER BEEN A GOOD 911 OPTION.
What happens when the power goes out?
My UPS kicks in supporting the modem, the VOIP router and the phone.
What happens when the internet goes out?
I assume you mean when your internet connection goes out. I've got DSL and I've had it go out once in three years and that was during a pretty nasty storm. I'm pretty sure the phone was out also though I had no way of checking. So as long as the phone system works my DSL and VOIP are probably up.
What happens when...
The list goes on and on and on and on which is why if you're really concerned about 911 you should have at least one land line phone plugged into an outlet. Why? Because the FBI doesn't need to worry about VOIP service. You should have a 911 phone available.
Why should I be forced to subsidize an out of date POTS when I don't use it? Maybe we should all be forced to buy and maintain emergency radios so we can call first responders when the phone system goes out.
If 911 was REALLY a problem then Comcast shouldn't be able to cut anyone's internet access... ever.
Because the phone company has never disconnected anyone before either.
Parent
Re: (Score:3, Insightful)
Yes. But Slashdot users have a propensity for Libertarian anarchism.
Libertarians don't believe in anarchy.
However, I think most of us would agree that instead of convincing the FBI to raid these businesses, AT&T and Verizon could have filed a lawsuit against the alleged offenders, and handled this matter through normal channels. But when you have connections, I guess you can skip a few steps.
Re:Looking forward to more inflammatory articles (Score:4, Informative)
Parent
Re: (Score:3, Interesting)
Actually, plenty of Libertarians are into anarchy. Of course, anarchy can mean a lot of things, from bomb-throwing radicals who just want to destroy the rule of law to people who believe that ultimately what allows societies to work is that most people behave ethically, and that consequently there is no need for some single institution to have a monopoly on the rule of law. A lot of libertarians subscribe to this latter kind of anarchism. I'm sympathetic, personally, but don't think it's practical.
Re: (Score:3, Insightful)
Selective enforcement is precisely a lot of the concern. If my damage deposit is not returned by my landlord in accordance with the contract, that's illegal; if my landlord deliberately fudged documents to do so, that's fraud. But you will not find the FBI doing much on these sorts of things; it's generally up to the wronged individuals to file civil suits themselves. On the other hand, the FBI does seem to frequently enter the battle on the side of large companies alleging what amounts to contract violatio
Re: (Score:3, Interesting)
I don't buy this argument. The problem here is not that the FBI got involved with a fraud investigation - it makes sense that the FBI would get involved in a fraud investigation where the disputed amount is in the millions of dollars, and the crime was committed across state lines, but would not get involved with a case where the amount of the fraud was small and the fraud was committed within the confines of a single city.
What is wrong about this case is that the FBI didn't recognize the colo provider as
Re: (Score:3, Interesting)
If the FBI seizes the colo, then it's acting on the warrant and seizing EVIDENCE. If it's seizing equipment belonging to all the clients of a colo, then either the mandate didn't tell it which client had done the crime, so they have to seize them all, get the evidence, and convict the one, maybe apologize to the other, or else they're operating on a theory that they were all conspiring to either commit the crime together, or help hide it.
I won't say we don't have a bias against the FBI doing anything but a
Re: (Score:3, Interesting)
there are reports that it's related to video piracy, sparking unconfirmed speculation...
oh wait, we DO have more info, from CBS news--and its exactly that--
Court documents show it's all part of an alleged massive fraud scheme against AT&T and Verizon.
So again, isnt this exactly the sort of thing the FBI is SUPPOSED to be investigating? And if you dont think the "court documents" are a reliable source, then why the hell are people jumping to conclusions based on a report of them? All we know for sure is that the FBI raided a location, they had a warrant, and a news organization saw court documents indicating it was within their authority and
Civil vs criminal law (Score:3, Insightful)
"It gives you the feeling that the FBI is acting as a collection agency for AT&T and Verizon."
Wouldn't that be a civil matter rather than criminal? I call unlikely.
Now that we don't have a website... (Score:5, Informative)
During the raid, CMG's owner, Joe Condit, says his website and business went down. "It's crippled us completely. Now that we don't have a website, we have no business, and a lot of speakers are without representation."
Without saying that this raid should have occurred in the way that it did, what's stopping this guy from setting up a webserver elsewhere and getting his business back online?
In an emergency, I'm pretty sure I could have a basic but "adequate" webserver for most small businesses up and running on just about any Internet connection within about 6 hours, even if I had to buy a new computer to install it on and find another Internet connection. Point the DNS records to the new address and he's back in business.
He would be in exactly the same situation if the colo building burned down. Why risk your business that way? If it's important to you, back it up and have some idea of what you're going to do if it goes down.
Re:Now that we don't have a website... (Score:4, Funny)
Back up data? Hmm. Your ideas are intriguing to me and I wish to subscribe to your newsletter.
Parent
Re:Now that we don't have a website... (Score:5, Informative)
A lot of places are not prepared for a complete site loss. They may be very redundant within the site, with multiple hosts and backups and redundant power / AC / networking, but not have a single piece of equipment not located at that colocation center.
Consider that even if they did have off-site backups (which are really the bare minimum, although a lot of small operations overlook it anyway), they probably don't physically possess any equipment to run it on or have an agreement with another colocation center to put that equipment in.
So right now they need to put an order in with Dell and Cisco and whoever to get duplicate equipment (that they probably don't have a budget for), find another colo on short notice, wait for the equipment to arrive (1-2 weeks), do the physical installation work, and then restore all of their systems types from backups that may or may not represent the complete bare metal system image.
Most disaster recovery plans only account for disasters within a finite period of time (the power goes out for a few hours) or for partial losses (you lose 2 of 4 web servers), because redundancy is the most expensive part of any computer deployment.
Parent
Re:Now that we don't have a website... (Score:4, Informative)
Consider that even if they did have off-site backups (which are really the bare minimum, although a lot of small operations overlook it anyway), they probably don't physically possess any equipment to run it on or have an agreement with another colocation center to put that equipment in.
This sounds like a very small business that probably doesn't require Cisco gear and all the trimmings. A cable modem with a static IP and a computer purchased at Staples to run Centos, Apache and sendmail would carry the load for at least a short time. The owner could run it in his living room.
Even if it's slow, it's better than being out-of-business.
Once he's online again in any fashion at all, he has bought himself the time to find a "real solution", if he even requires one.
Parent
Re: (Score:3, Insightful)
Yeah, I'm not sure what this particular site requires. I do know from prior professional experience that the 'second site' was always a very tough sell (and actually, of the places I've worked, only Yahoo was good about that sort of thing).
It's more than just the hardware too, it's the processes in place to ensure that there are very seriously no dependencies on one site. For instance, maybe you deploy everything simultaneously to both sites, you buy equal hardware in both places, you do BCP failover tests
Re: (Score:3, Insightful)
Yeah, sure. All these businesses that were being hosted there can just go and set up this themselves, or find someone on extremely short notice to do it for a price they can afford - on their local cable providers network (nevermind that the business owners cable provider probably doesn't allow servers, WHICH IS LIKELY WHY THEY HAD A OUTSIDE PROVIDER IN THE FIRST PLACE)
Right.
SB
Re: (Score:2)
This makes for an interesting business opportunity. A service similar to Mozy Pro except with better provisions for encrypting data [1] before it gets sent to the cloud. Then, should a business lose its colocated servers, they can be rebuilt from another location.
[1]: Data encryption is solid, but what is needed is a good enterprise-level key management system so if one employee leaves or goes rogue, the data can still be recovered with another key, and the rogue key removed
errr (Score:5, Interesting)
First the Wolverine story from yesterday, now this? I find it hard to believe that this is really over some unpaid bills.
So to punish the colo (Score:2)
they take down every client colocated there?
Talk about punishing the innocent.
Government agencies as the long arm of capitalism (Score:5, Insightful)
> It gives you the feeling that the FBI is acting as a collection agency for AT&T and Verizon.
"I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents."
- Maj.Gen.Smedley Butler, 1935, awarded 2xCMOH
Discuss the use of Federal agencies in protecting commercial intersts of large corporations. 2000-3000 words. Citations in Harvard style.
Re: (Score:2)
The word you are looking for here is fascism, not capitalism.
Fascism is when you have merger of big business interests with government (usually military) muscle.
Re:Government agencies as the long arm of capitali (Score:5, Insightful)
While poignant, I hardly think a quote from damn near a century ago is particularly relevant. You might as well be quoting Shakespeare.
Because the world is so different now?
Let's update it a little then:
"I helped make Iraq a decent place for the Haliburton boys to collect revenues in....I tried to bring light to Afghanistan for the Unocal Central Asian oil pipeline in 2002."
The first step in repeating history is failing to see the relevance of past lessons. Whenever someone says "but things are SO different now" my bullshit detector goes off. Human beings aren't any different now than they were a thousand years ago.
Parent
Still unreasonable seizure - cause irrelevant (Score:4, Interesting)
Doesn't matter what the motive or rationalization is: Unreasonable seizure by the federal government is forbidden in the Constitution.
There's no way they needed all this "evidence" for some unpaid bills. Nice story, but I call bullshit.
God knows what is really going on here, but I hope it eventually sees the light of day. This is reminding me of Waco, with 98% less people being burned alive involved.
--
Toro
This is from the CEO of the company.... (Score:5, Informative)
index
Matthew Simpson
Core IP Networks LLC
Dear Customers,
Today at 6:00am, the FBI conducted an unwarranted early morning raid of our 2323 Bryan Street Datacenters, on the 7th and 24th floors.
I received a phone call at 6:05am from our NOC that the entire network was powered off. I called Capstar Commercial and TELX, our landlord, and was told that the FBI was in the datacenter with a search and seizure warrant. I asked that the agent in charge call me immediately.
I received a call 15 minutes later from FBI Agent Allyn Lynd. Mr. Lynd would not tell me why he raided our datacenter or what he was looking for. He also accused me of hiding inside my house in Ovilla, Texas. I was actually in Phoenix, Arizona when this happened. I told him that, and he told me that he was "getting the dogs" after me, and hung up on me. I found out from an employee that there were 15 police cars and a SWAT team at my home in Ovilla.
The FBI has seized all equipment belonging to our customers. Many customers went to the data center to try and retrieve their equipment, but were threatened with arrest.
Neither I, nor Core IP are involved in any illegal activities of any kind. The only data that I have received thus far is that the FBI is investigating a company that has purchased services from Core IP in the past. This company does not even colocate with us anywhere, much less 2323 Bryan Street Datacenter.
Currently nearly 50 businesses are completely without access to their email and data. Citizen access to Emergency 911 services are being affected, as Core IP's primary client base consists of telephone companies.
If you run a datacenter, please be aware that in our great country, the FBI can come into your place of business at any time and take whatever they want, with no reason.
I can be reached for further comment at: mnsclec@gmail.com
Further information will be given as it becomes available.
Yours,
Matthew Simpson
CEO, Core IP Networks, LLC
direct link: http://sites.google.com/site/mnsclec/index [google.com] //Just made an account to post this.
In the last story... (Score:3, Interesting)
However, I was under the impression that, in America, it was no violation of the law to owe someone money; at least until that person or corporation showed that money was owed or a contract was breached in a CIVIL suit.
Or has the Federal Government legislated itself into that area as well?
IANAL, etc.
If its really about lost telco money (Score:4, Informative)
If its really about money owed to the telcos by these VoIP providers, the right way for Verizon, AT&T etc to get their money back is to cut off whatever VoIP->PSTN gateway setup is being used. If its a 3rd party gateway, the third party gateway should be responsible for paying the telco and then the VoIP provider should be paying the 3rd party gateway.
In any case, its possible to shut down whatever links are used to connect to the telcos networks
Re:Does this mean... (Score:4, Funny)
Parent
Re: (Score:2)
Personally, I think they shouldn't pull the servers until they've at least seeded 110%.