The Fugitive Game: Online With Kevin Mitnick (55 page)

Schindler warned Sherman there might be a conflict of interest
since he had previously represented De Payne. Sherman responded
that if he knew of any conflict he should apprise Judge Mariana
Pfaelzer immediately, since if it were determined that Sherman
couldn't represent the hacker he would be left without counsel. But

Schindler left without airing his allegation in front of the judge or
her clerk. The next day, June 18, Sherman wrote Schindler, complain-
ing about the prosecutor's failure to raise his conflict of interest
before the judge. "On behalf of Kevin Mitnick I demand that you
indict him at the earliest time in Los Angeles, California." He asserted
that Schindler was the head of the "nationwide Mitnick investigation
or Task Force" and the attorney who would determine "when and
where" Mitnick might be indicted. "Let's get this matter tried," he
implored. Two days later he fired off another letter, this time copying
his correspondence to Judge Pfaelzer. Kevin had told him that Schin-
dler had warned that if he reneged on the plea, the prosecutor "would
notify other federal jurisdictions across the country that Mitnick was
now available for prosecution." Wrote Sherman, "The clear meaning
of those threats was that you would encourage his indictment in other
jurisdictions...."

Schindler promptly wrote back on June 20, 1996, rejecting the
charge that he'd threatened Mitnick and denying that he could decide
"when and where" Mitnick was indicted, though the previous year he
had told the
L.A. Times,
"Kevin is going to come and face the music
in L.A., where, of course, the significant case has always been." Four
days later, Schindler replied to Sherman's second letter, copying his
correspondence to the judge and asserting that "there was a signed
plea agreement in this matter which provided Mr. Mitnick with
transactional immunity for a number of criminal acts occurring
throughout the United States.... Frankly, it was a very good deal for
your client."

On June 28, 1996, Sherman angrily answered Schindler's letters.
He called Schindler's statement about each jurisdiction making its
own decisions, with Schindler merely an observer, "totally untrue,"
described the plea bargain as a joke, and repeated his demand for
one trial in Los Angeles. Schindler replied, dubbing Sherman's
"righteous indignation" disingenuous, and said his office would
"prefer to litigate this matter as professionals and we invite you to
adopt a similar perspective." But when the news hit the papers that
Mitnick would be represented by new counsel and was preparing
for trial, De Payne got cocky and called Schindler a "moron" and a
"shriveled up penis" on the Internet. He gleefully speculated what

might happen "when the defense subpoenas Tsutomu Shimomura
and Justin Petersen to testify!"

■ ■ ■

"The feds called me out of the blue," Ron Austin recalled. They
wanted to talk about Mitnick.

Austin met Special Agents Ken McGuire, Kathleen Carson, and an-
other federal agent at the FBI's office. They slapped down a piece of
paper on a desk. "I wonder if you could shed some light on this?"
McGuire asked pointedly. It was a formerly PGP-encrypted message
between Austin and Mitnick. Austin wondered if the government had
actually broken the code, but the agents said a decrypted copy had been
found. As Austin began to explain the e-mail correspondence he had
with Mitnick, he mentioned that he had been working in Sherman's
legal office. Carson said she was going to have to talk to Schindler
about this, and left the room to call the Assistant U.S. Attorney.

A few days later, on July 24, McGuire phoned Austin and "wanted
to know all about Sherman. When he started working there, how he
met him, the purpose of the meetings." Austin told the agent that
Sherman had revealed his legal strategy for Mitnick's case, and that
Austin had even typed and edited one of his legal letters. The U.S.
Attorney's office had apparently instructed the FBI agent to learn
whether Austin was part of the defense team. When Austin told
McGuire that Sherman had informed Austin of his strategy for the
Mitnick case, the FBI agent asked, "Was that in his office or in the
hall?" Regardless of Austin's whereabouts, the FBI inquiries about
his work for Mitnick's new lawyer appeared to raise questions of
attorney-client privilege.

■ ■ ■

Soon after McGuire's phone call, the government filed a motion to
disqualify Richard Sherman as attorney for Kevin Mitnick, and in-
cluded a declaration of agent Ken McGuire. The motion and suppor-
ting documents were filed under seal. Austin, responding to what he
believed were government misrepresentations, filed his own letter in
rebuttal under seal on August 3, 1996.

On Monday, August 12, 1996, Judge Pfaelzer heard oral arguments on the government's motion to disqualify Sherman. Christo-
pher Painter, another Assistant U.S. Attorney, argued that De Payne
could be a future codefendant of Mitnick. But Pfaelzer was not per-
suaded. She chastised the government, reminding them they'd had a
grand jury for four years and still she didn't "have any indictment"
and promptly denied the motion to disqualify Richard Sherman.

■ ■ ■

On Friday, the thirteenth of September, David Schindler asked Austin to
come talk to him. Usually the prosecutor wanted to meet at the U.S.
Attorney's office, but Austin arrived as requested at the FBI building,
took the elevator to the fourteenth floor, and followed the FBI agents
and Schindler down the hall. Ten people were present, including two
prosecutors, agents McGuire and Carson, two FBI techs, and other fed-
eral officers. They stopped at an office with a large pink photocopy plas-
tered on the door showing Mitnick at his fattest and meanest. "Mitnick
Task Force," announced a sign on the door. Austin peered in and saw a
white board with a photo lineup including De Payne.

Austin found it all amusing and began to laugh, prompting them to
move to another room, where Schindler pulled out a new PGP message
between Austin and Mitnick. But Austin said he felt the prosecutor wasn't
really interested in the message. He seemed to just want to put Austin in
the mood to talk. Schindler wanted to know about Sherman, and what
crimes the government should investigate against Lewis De Payne.

"Lewis never discussed crimes," Austin told him. "He always discussed
things in the third person. I don't know how you'll ever prove anything."

"You just leave it to me," Schindler said, flipping on a couple of
tapes, one with Mitnick faking a Swedish accent, and another with
De Payne asking someone to ship something to an address. "Well,
you know we're going to be indicting De Payne, so you might get a
subpoena to testify before us," Schindler informed Austin. As the
hacker left the building he wondered why Schindler had shown him
this "Mitnick Task Force" room. Perhaps, he thought, they'd set the
whole thing up to scare Sherman into making a deal. Maybe there
was no Mitnick task force after all.

On the evening of September 25, 1996, I was at home preparing for
a 6 a.m. flight the following morning to Los Angeles to see what I
could learn about the secret Mitnick grand jury hearings being held
that day. The phone rang and a Sprint automated operator asked if I
wanted to accept the collect call. It reminded me of the many calls I'd
received from the Metropolitan Detention Center from Kevin Poul-
sen. But this was another Kevin.

He chuckled. "Do you recognize my voice?"

I did, of course, but after that initial bit of humor Kevin Mitnick
sounded little like the spirited prankster I'd known before his arrest.
He knew about the grand jury hearings scheduled for the following
day because the main witnesses were to be his mother, his father,
and his seventy-year-old grandmother. He figured he and De Payne
would be indicted by the end of the day, and Sherman would be
forced to represent his prior client and drop him. Since Mitnick was
indigent, he'd have to get a federal public defender — or be stuck
with a federal panel attorney. He considered it all a ploy by Schin-
dler to deprive him of strong counsel and to attempt to get De Payne
to testify against him. "They'll do anything to win," he groaned.

After mentioning in passing that "the government is taping this
call," Mitnick explained why he refused to go along with the govern-
ment's deal. I'd already confirmed his story with other sources and
learned what the government had filed under seal. Schindler had of-
fered Mitnick "transactional immunity" for specific crimes in a writ-
ten plea, but in June, when Mitnick pressed for a definition, the
government had revealed that it left open the possibility of future
prosecutions beyond those to which he'd already confessed. And the
eight-year cap first dangled before the hacker was merely an eight-
year recommendation. A hanging judge could sentence him to forty.

After nineteen months in jail, Kevin sounded tired and beaten
down. "They put me in the hole for a week and said they'd only let
me out if I agreed not to ask for bail and not to ask for a preliminary
examination of the case," Mitnick recalled angrily of his arrest. "I
had to give up critical rights just to get out of the hole." He contin-
ued his rant, saying the FBI had lied about the search in North Caro-
lina, and was incredulous that Shimomura's statements to Agent
Levord Burns, initially included in the agent's search warrant, had

now become part of the official record that would be presented be-
fore his sentencing judge. "Do you really believe the cellular code
Lottor and Shimomura reverse-engineered is worth a million dol-
lars?" he asked. It sounded far-fetched to me. Nor could I believe
that the government still failed to realize that Shimomura's software
had been sold to hackers who might use it as he had, to eavesdrop.

Without an attorney, Mitnick was hoping to use the Internet as
a medium to publicize his "persecution" by the government and
solicit funds for his legal defense. He was sorry he couldn't reply
to the hundreds of kind letters he'd received and the money he'd
been sent for cigarettes and candy, but "anything I say might be used
by Schindler."

When I mentioned De Payne had called Schindler a moron on the
Internet, he sighed. "It's the same old pattern. It isn't helpful for my
case." His only hope seemed to be in learning new facts about his
nemesis. "Shimomura was working closely with this guy
Walker" — the former Assistant U.S. Attorney in San Francisco —
"the one who said I stole billions," Mitnick said, adding that he
wanted to know more about Shimomura's relationship with the
prosecutor and the FBI. "Shimomura saw my file, my confidential
FBI file."

The hacker said he wanted to go to trial and call Shimomura to the
stand. "This is a case where the victim of the crime is the one gather-
ing evidence," said Mitnick. "Where's the chain of custody to show
that he didn't tamper with the evidence?"

The next morning, shortly before 10 a.m., on Thursday, September
26, I sat outside the Los Angeles courtroom where the Mitnick grand
jury was being held. The elevator opened and David Schindler, es-
corted by a team of federal agents and assistants, wheeled by a cart of
documents. Ten minutes later, John Yzurdiaga appeared for a differ-
ent case, pulled me aside, and angrily told me, "Sherman got Mitnick
indicted. He asked for it."

The lawyer pointed out a short, balding man in a light camel jacket
at the receptionist's bulletproof window and said, "That's Kevin's
father."

"Can you believe this!" Alan Mitnick moaned, shaking his

head, after I introduced myself. "The way they've blown this thing
out of proportion. Personally, I think that they've hyped this thing so
much that they feel they can't back out." We talked awhile, and
then Christopher Painter, Schindler's fellow prosecutor, came out to
speak to Mitnick Sr.'s attorney, Sam Galici. Mitnick Sr. had pre-
sented the government with a motion demanding that it disclose
whether he had been the subject of surveillance before he testified to
the grand jury.

Ten minutes later, Schindler joined the conversation, smiled, and
casually dropped his hands. He claimed there had been no surveil-
lance on Mitnick Sr.'s line, though court records documented that
Pac Bell had tapped a phone Mitnick's father had used. Schindler said
Mitnick Sr. didn't have to testify before the grand jury. "All we want
to do is talk to him."

"Would you agree not to call him before the grand jury?" Galici
asked.

Painter answered that one. "That depends on what he says."

Mitnick Sr.'s surveillance motion had achieved its goal. If the
government didn't wish to reveal any possible wiretapping, Alan
Mitnick didn't have to testify against his son. Minutes later, though,
Kevin's grandmother, Riba Vartanian, arrived. Slowed by arthritis
and accompanied by an attorney who had cost her several thousand
dollars, she wasn't prepared to fight the government. She handed me
a document prepared by the government to give her immunity for
testifying against her grandson. Half an hour later, she emerged after
talking to Schindler outside of the grand jury.

"They don't know what they're doing," her attorney said with a
shrug, disgusted. The elderly woman seemed puzzled. "They asked
me when Kevin became a fugitive. How do I know?" she said, clutch-
ing her purse. They wanted to know when she had moved to Las
Vegas, and if Kevin had called her there. She seemed unsure. But
whatever she said, her statements appeared irrelevant. Kevin's aunt,
Chickie Leventhal, of Chickie's Bail Bonds in Santa Monica, had
apparently talked to Schindler the night before and identified her
nephew's voice on a tape recording of an alleged attempt to social
engineer a copy of a company's software.