It was a simple thought, but it paid off big time.
In 1976 my father began working at Chase Manhattan’s headquarters in New York. A former major in the army, he had retired with honours and was found a job as head of night security at the Chase by his connected friends who had left the fields of war and fought their way into the Pentagon. A quiet man, he had decided that 32 years in the army was enough and that he wanted to spend time with his family. A year later, his wife of 35 years died of cancer. I was his only child.
Born in 1960, I was variously described as a “bookworm”, “teachers pet”, and, given my interest in technology, “geek”. While the underlying sentiments here were intended to be derogatory, the basic statements were correct. Teachers did like me; I spent all of my spare time reading books and I loved to play with technology – taking things to pieces to find out how they worked and studying the design of technologies. If these activities came with peer abuse, so be it. I was intending to follow in the footsteps of the great thinkers – Keppler, Heisenberg, Einstein, Edison, anyone who had achieved fame from their scientific or practical work. I read and studied anything and had a good memory for everything.
My father, who I always called “Sir”, began to worry about me at night. He persuaded his manager to permit me to come into the bank and work in a room on my homework until “no later than 10pm” and then I would walk the two blocks home. This way, he could keep an eye on me; I would have the peace and quiet of an office to work in and he could ensure that I ate properly. Each evening at six, I would walk with him to the bank and log in my presence. I would then settle in to my work in the room where the computer operators worked during the day. Exactly at eight each night, father would bring a meal to me and we would eat together for exactly twenty minutes. On completion of the meal, father began his tour of the building, which finished at 10pm. He would then escort me to the door and watch me walk two blocks south until I made the turn to walk the remaining block and a half to our apartment.
What my father did not realise was that this routine, intended to ensure my safety and security, would prove to be more dangerous than leaving me at home. The room in which I was supposed to work diligently at my Mathematics, Social Studies, Science, Spanish and so on was filled with interesting books and technology. Around the room were bookcases filled with technical manuals, programming guides, manuals and code books. In other parts of the room were keyboards, machines and screens. Soon an idea germinated.
Within six weeks I had mastered the basic programming which permitted me to work the computers in the room. While it looked difficult, programming was in fact very straightforward. It was a set of devices to permit logic to flow through cables and transistors – the microchip came later. I began with simple programs and used the terminal and code books in the room to test them. Soon, I could examine how much money was taken in by each of the branches on a daily basis, how much was made in interest at various interest rates and how much was owed to the bank by its debtors.
Then I began work on a more elaborate idea. I developed a program that, on the 12th day of each month would deduct $4 from each of the 4 million accounts managed by the bank and then restore $2 to these accounts on the next day. The other $2 I routed to a large number of company bank accounts set up with false company names at different branches of the Chase, though the deposits would be made in $200,000 amounts on the 15th of each month. On the 20th of each month, these false company accounts would transfer all but $2500 to a numbered full interest bearing Swiss bank account I had arranged to open by sending a letter to the Foreign Accounts Director of Bank Nationale Suisse using stationary I found in the Director of Foreign Credit office when father was holding a night team meeting of the security staff – his office was on the same floor as the Director of Computing Services, which was the room I was using. The program was written to continue for two years and then to stop. I estimated that the total capital amount deposited in the Swiss account after two years would be around $195 million.
I did take some precautions. Before transferring the funds, the program adjusted the computers’ clocks and made it look as if the transaction had been made during day time, but always at different times and from different branch identifiers. The program itself was buried in computer files linked to the payroll system which the bank had recently installed – one of the first companies to fully automate payroll for its employees. The program was called “tax system 227.113” and was buried in the middle of several such systems. Finally, the program itself was “double coded” – that is, a cursory inspection of the code would not reveal the true actions of the code.. the program had to be run in a mode where its actions could be viewed for its real work to be understood – at the time, this was a recent development in the field of programming.
After eight months, father decided that I was just as safe at home as I was at the bank, so my night visits ceased. I had no opportunity to modify or delete my program, no opportunity to see if others had visited the accounts I had created or had challenged the automatic deductions and account restorations. While I had assumed that people would consider $4 deduction followed by a $2 restoration no more than a quirk in the system, someone may eventually discern that this pattern could be something more sinister. However, the total sum involved – $24 a year – would be explained away at branch level as a form of bank charges and would soon be forgotten, especially since it could rightly be said that “this is a fee that everyone is paying”.
At the age of nineteen I won a scholarship to read science at Harvard. My father was proud, not only of my achievements in getting into Harvard, but of the fact that I had won the scholarship named after General Conhausser – the General my father had first served under. The scholarship, established for the academically outstanding sons of army officers, was awarded annually to the two best students in science and mathematics who applied to the army scholarship fund.
Harvard was a pleasant experience, and I excelled at the tasks I was assigned. While I was no “fun”, according to my peers, I was “a first class” student according to my teachers. I was seen to be especially gifted when it came to computing science, then relatively new to the curriculum at the ivy covered academy. After four years, I decided to read law and to focus my energies on legal questions as they related to scientific matters. While most of my contemporaries were rushing to do research in plastics, the emerging world of bio-pharmaceuticals or stress in metals, I decided to look closely at the law. One reason was the feeling I might need to know more about the law sooner rather than later.
Throughout my time at Harvard, I lived as if the evenings I had spent at the bank were no more than a fiction. I lived on my scholarship, which was just enough to pay for my rooms, my books, tuition and meals and the occasional concert. I did not holiday, I wore my clothes until they would wear no more. I did not date, entertain or otherwise offer any signs of having money to spare. I played safe and retreated to books, spending the colder nights in the law library until it closed.
At the end of my time, I was deemed to be expert at patent law, trade mark protection and the law as it then related to scientific discoveries and, what has since become known as “intellectual property law”, but was then all lumped under copyrights and protection of discovery.
I graduated in 1986 and was asked to join a fast growing company called Microsoft as part of its legal team, which then was comprised of just three people. Though this meant an initial move to Seattle, I was happy to have work and to be in a company than was not only growing quickly but also innovating all the time. There was a lot of work. For the next five years, we worked hard to protect our software products and complete legal agreements for their distribution. At the end of five years, I was the most senior lawyer on board the fast train and worked for the next decade as Vice President and Legal Counsel.
Travelling the world to secure binding legal agreements with distributors, but more specifically to ensure full protection of our copyrights and trademarks, I was very involved in the core issues of intellectual property protection. I was also centrally involved in the anti-trust suits which, from time to time, we had to face as competitors challenged our market dominance and our distribution agreements with computer manufacturers to ship our products loaded on their systems at the point of manufacture. While we won our anti-trust cases and secured sound agreements with our distributors, we did also face significant intellectual property theft, especially in Asia, China, India and Africa.
My travels took me through Switzerland from time to time and I was able to use some of these visits to make myself known to the foreign credit managers at various banks, including Bank Nationale Suisse. On my first meeting, I mentioned that I myself had an account there and produced my letter of authorization from the Chase to access this account, supported by relevant codes and identifying documents. I was pleased to find that no queries had ever been made about the account, that that capital deposited between 1976 and 1978 was $198 million and that, by 1992 this had grown to $345million. Still I did not withdraw from or otherwise adjust the account, I merely recorded that the account holder had reviewed the account.
In 1999 I retired from Microsoft and sold my shares in the company, which had been the way in which I had received bonus payments since I began working there in 1986. After thirteen years with the company, my shares were worth $23million. I was thirty nine years old, a multi millionaire and I had nothing to do.
I decided to spend the rest of my life reading, exploring and understanding science and to do so in style. I moved to Mumbai (formerly Bombay), the technology capital of India and one of the fastest growing knowledge economies in the world. There I did some legal work for companies based in India wishing to protect their intellectual property, but most of the time I read, took journeys of exploration to locations around the world and settled into a simple pattern of a life of basic luxury – good food, a beautiful house with air conditioning and servants, the best sound system money could buy, literally thousands of compact disks, computers linking me to the world and all the books money could buy.
On January 1st of this year, I transferred all but $50 million of my Swiss accounts into bank accounts in six countries. The Statute of Limitations is twenty five years, so technically I could still be held accountable for the fraud committed before “hackers” were heard of and before computer crime was invented. But I have had long discussions with lawyers at Chase about computer crime in the last five years – telling them that I wanted to write a history of computer crime. I asked when they first detected a crime which was based on programming. The answer made me smile.
In 1978 a staff member of the Chase used the computer to deduct one cent a month from each of the accounts holding more than $1,000. The criminal, one Bob Delser, admitted his guilt to the head of security at the time – my father, who had moved from night work to day work, once I went up to Harvard. Rather than create concerns about computers and their security, Delser agreed to work with the bank to look at how security could be improved and to work with the bank to prevent computer fraud and theft. “It takes one to know one,” Delser said. I could empathise with that.
What was interesting about this story is that they still did not know about the first computer fraud.
The money I now have is used to support scholarships for scientists and medical researchers around the world. Known as the “Edison Fund”, after one of my childhood heroes, some 500 students a year in thirty countries receive support from the funds.
I don’t feel guilty, only quietly amused.