Schifreen was taken to Holborn police station to spend the night in the cells. He was charged and released on bail the next day.
At the same time Schifreen was arrested, another raid was taking place in Sheffield at the home of Schifreen's friend and companion, Steve Gold. Gold had also continued to hack Prestel. Along with Schifreen, he had been the most excited by the chance to play with the system. Gold remembers the knock on his door as coming at eight minutes past ten P.M. When he answered, he found three policemen and three British Telecom investigators, who read him his rights and promptly took him down to the local police station, where he spent an uncomfortable night. At nine the next morning he was driven down to London to be charged.
Because there were no laws in Britain addressing computer hacking at the time, the two were charged with forgery--specifically, forging passwords. Five specimen charges were listed in the warrant for Schifreen, four for Gold. The charges involved a total loss of about $20 to the Prestel users whose IDs had been hacked. What became known as the Gold and Schifreen case was Britain's first attempt to prosecute for computer hacking.
The case was tried before a jury some twelve months later. At the beginning of the trial the judge told counsel: "This isn't murder, but it's a very important case. It will set a very important precedent." After nine days the two were found guilty. Schifreen was fined about $1,500, Gold about $1,200; they had to pay the court almost $2,000 each for costs.
The duo appealed the verdict, and after another twelve months the case was heard in Britain's highest court of appeal by the Lord Chief Justice, Lord Lane, who ruled that copying an electronic password was not covered by the Forgery Act, and overturned the jury's verdict. The prosecution appealed that decision, and after another twelve-month delay, the House of Lords--which carries out many of the functions of America's Supreme Court--upheld Lord Lane's decision. Gold and Schifreen were acquitted.
Since then, Gold and Schifreen have both gone on to respectable careers in computer journalism. And from time to time they still meet in Chinese restaurants, though neither continues to hack.
But their case, which cost the British taxpayers about $3.5 million, gave a misleading signal to the country's hackers and phreakers. Because Gold and Schifreen had admitted hacking while denying forgery, it was assumed that the courts had decided that hacking itself was not against the law.
That's certainly what Nick Whiteley believed.
Briefly, in 1990, Nick Whiteley was the most famous hacker in Britain. A quiet, unremarkable young man with a pedestrian job at a chemical supplies company, by night he became the Mad Hacker and roamed through computer systems nationwide. To the alarm of the authorities, he was believed to have broken into computers at the Ministry of Defense and MI5, Britain's counterintelligence security service. More troublesome still, there were messages sent by the Mad Hacker that strongly suggested he had evidence that some type of "surveillance" had been carried out against the opposition Labor party, the Campaign for Nuclear Disarmament (CND), and even the British Cabinet. It was unclear who was supposed to be carrying out the surveillance, but it was presumed to be MI5.
When Nick was arrested in 1988, he was interviewed for up to six hours by agents he believes were from the Ministry of Defense and MI5. They were accompanied by an expert from International Computers Limited (ICL), at the time Britain's only independent mainframe computer manufacturer (the company is now controlled by Fujitsu of Japan). Nick was passionate in his admiration for ICL computers; he never hacked anything else, and both the MoD and MI5 use them.
Whiteley's ambition was to buy his own ICL: he especially coveted the 3980, their top-of-the-line mainframe. In his daytime job, he worked on an ICL 2966, a smaller model, but still a formidable mainframe. Whenever Nick felt his fellow workers were making fun of him--which he believed they did because he was only an operator, rather than a real programmer--he would fantasize about the 3980. It was twenty times faster than the 2966 and could support far more individual users. But he had to admit that on his salary it would take a long time to earn the down payment on the almost $2 million purchase price.
