American Greed - Computer Hacker Masterminds   View more episodes

Aired at 05:00 PM on Wednesday, May 05, 2010 (5/5/2010)      View all transcripts from this day


00:00:01>> In my own experience, I would always think back to the movie "WarGames." And you think of matthew broderick sitting in his room with a computer, trying to hack into something with a -- with a modem.
00:00:11But, really, that -- over the years, that's changed now, where this is really organized crime.
00:00:16>> Narrator: Carders forums traffic in millions of stolen identities every year.
00:00:21It's a multibillion-dollar business worldwide.
00:00:29Before he becomes a don of the digital underworld, max butler grows up near boise, idaho.
00:00:36>> I was a computer geek from a young age.
00:00:38My father worked with computers.
00:00:40He worked at ibm, and then he worked at a local computer store, and then he started his own computer store.
00:00:45So I always had access to machines.
00:00:47Then I started programming when I was 8 and was into video ..
00:00:51I was quite a geek, really.
00:00:53>> Narrator: Butler begins hacking in his teens.
00:00:57By college, he's breaking into the network of boise state university.
00:01:01Butler says that at this stage, his hacking is just for kicks.
00:01:06>> The administrators there were watching me and watching my activities 'cause I was a very curious person.
00:01:11I would go into the binary directory.
00:01:12Well, that caught their attention, like, "what's this " as they started paying attention to me, I started paying attention to them.
00:01:19We were kind of watching each other, and that was an early sparring match that happened.
00:01:23>> Narrator: But behind the geeky demeanor, there lurks a history of violence.
00:01:28In his freshman year in college, butler is arrested for choking and threatening to kill his girlfriend.
00:01:34He is convicted of aggravated assault and receives a stiff 5-year sentence.
00:01:42In 1995, his prison stint over, the 22-year-old butler tries to build a new life in san francisco.
00:01:49>> Friends told me that even just move computers around physically and make $30 an hour, let alone if you actually knew how to use one.
00:01:57And I did, and I was good, and so I moved down.
00:02:00>> Narrator: As a teenager, butler hacked for fun.
00:02:04Now he can turn hacking into a lucrative career.
00:02:08He goes to work as a computer security consultant.
00:02:12>> He was what they call a white-hat hacker.
00:02:14And, in fact, he epitomized it.
00:02:17He made a lot of money doing penetration tests.
00:02:19You would pay him to break into your computer to test your security, but at the same time, he donated his services for free to nonprofit groups.
00:02:27>> Narrator: Soon, butler is commanding a fee of more than $100 an hour.
00:02:32He goes by the name max vision and enjoys an almost celebrity status among the hacking elite.
00:02:39>> I got a really good reputation for always finding the holes because I was very good at what I did.
00:02:45And I set up a website, max vision network security and
00:02:49>> Narrator: In fact, he's so good that the fbi office in san francisco asks forhishelp, hacking into systems and pointing out weak spots in security.
00:03:00>> I got to do what I loved.
00:03:02I was already spending most of my waking hours doing security research.
00:03:06Now I can actually apply it and give a nice written report to someone.
00:03:11It made me feel good.
00:03:14It was a very useful service.
00:03:15I really helped a lot of people.
00:03:17>> Narrator: But life as a white-hat hacker isn't exciting enough for butler.
00:03:21He starts to break into private networks without permission.
00:03:25>> He thrived on the ego of it, of beating these defense systems.
00:03:31>> A couple of things were -- were really wrong about that.
00:03:34One is I didn't get permission.
00:03:35I didn't have permission from any of the people, who i actually went and fixed their systems.
00:03:39I didn't have permission from the fbi.
00:03:40They didn't say, "hey, this is " they didn't actually respond to the e-mail.
00:03:44The next time I had contact with them, it was in person, like, " you know, with the air force office of special investigation in my living room.
00:03:52>> Narrator: Butler is charged with computer fraud.
00:03:56In may 2001, he is sentenced to 18 months in federal prison.
00:04:02It is his second time behind bars.
00:04:04He's only 28 years old.
00:04:08While butler sits in prison, hacking culture undergoes a dramatic transformation.
00:04:14>> The real migration that we