Hacker in Hiding : Digital Desperado Who Claims to Have Worked for the FBI Is Now Being Sought by the Agency

First there was the Condor, then Dark Dante. The latest computer hacker to hit the cyberspace most wanted list is Agent Steal, a slender, good-looking rogue partial to Porsches and BMWs who bragged that he worked undercover for the FBI catching other hackers.

Now Agent Steal, whose real name is Justin Tanner Petersen, is on the run from the very agency he told friends was paying his rent and flying him to computer conferences to spy on other hackers.

Petersen, 34, disappeared Oct. 18 after admitting to federal prosecutors that he had been committing further crimes during the time when he was apparently working with the government “in the investigation of other persons,” according to federal court records.

Ironically, by running he has consigned himself to the same secretive life as Kevin Mitnick, the former North Hills man who is one of the nation’s most infamous hackers, and whom Petersen allegedly bragged of helping to set up for an FBI bust. Mitnick, who once took the name Condor in homage to a favorite movie character, has been hiding for almost two years to avoid prosecution for allegedly hacking into computers illegally and posing as a law enforcement officer.

Authorities say Petersen’s list of hacks includes breaking into computers used by federal investigative agencies and tapping into a credit card information bureau. Petersen, who once promoted after-hours rock shows in the San Fernando Valley, also was involved in the hacker underground’s most sensational scam--hijacking radio station phone lines to win contests with prizes ranging from new cars to trips to Hawaii.

The mastermind of that scheme was Dark Dante, whose real name is Kevin Poulsen. He is awaiting sentencing in connection with that case, having already spent three years in custody, the longest term in jail for any hacker in history.

Petersen’s case reveals the close-knit and ruggedly competitive world of computer hacking, where friends struggle to outdo each other and then, when they are caught, sometimes turn on each other. Petersen boasted of his alleged exploits trapping his former colleagues.

Petersen gave an interview last year to an on-line publication called Phrack in which he claimed to have tapped the phone of a prostitute working for Heidi Fleiss. He also boasted openly of working with the FBI to bust Mitnick.

“When I went to work for the bureau I contacted him,” Petersen said in the interview conducted by Mike Bowen. “He was still up to his old tricks, so we opened a case on him. . . . What a loser. Everyone thinks he is some great hacker. I outsmarted him and busted him.”

How much of Petersen’s story is true and how much is chest-thumping is at issue, for he is a shadowy person who didn’t even use his own name during the years he spent on the fringes of the Los Angeles rock scene. Tall, good-looking, with long hair down the middle of his back, Eric Heinz, as he was known by everyone, shattered the computer nerd pocket protector stereotype. He frequented the Rainbow Bar and Grill on Sunset Boulevard, often with different women on his arm, and handed out cards identifying himself as a concert promoter and electronic surveillance specialist.

Riki Rachtman, an MTV “veejay,” said Petersen had a reputation for technical wizardry among the club crowd. “Everybody knew, if you screwed (him) over, he had the power to screw everything” with you, Rachtman said.

But was he really working as a government informant at the same time to ensnare his hacker buddies for the bureau? The FBI refused to talk about Petersen directly. But J. Michael Gibbons, a bureau computer crime expert, expressed doubts. He advises against such relationships.

“It’s not safe. Across the board, hackers cannot be trusted to work--they play both sides against the middle,” he said. The agents “could have had him in the office. They probably debriefed him at length. Send him out to do things? I doubt it.”

But Santa Monica attorney Richard Sherman, who is representing a friend of Mitnick’s in another hacker case, has accused the FBI of not only actively using Petersen as an informant, but also of turning a blind eye to Petersen’s alleged crimes during the time he was in their care. The crimes involve alleged credit card fraud.

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In a May 19 letter tS. Atty. Gen. Janet Reno, Sherman said three agents in Los Angeles engaged “in a course of conduct which is illegal and contrary to bureau policy” in handling Petersen.

Jo Ann Farrington, deputy chief of the public integrity section, responded on July 18 that there were no grounds to begin a criminal investigation. Because Sherman had called “into question the ethical conduct of the named special agents,” the letter was referred to the Office of Professional Responsibility for review.

“It is factually incorrect that we allowed Mr. Petersen to commit crimes,” said Assistant U. S. Atty. David Schindler.

Those who knew Petersen best described him as a bright, verging-on-arrogant man who dressed well and sometimes walked with a cane, a result of a motorcycle accident six years ago that cost him a foot. He sometimes promoted after-hours clubs in the Valley and in Hollywood, according to a partner, Phillip Lamond.

One night the two men were talking about Petersen’s adventures. “The difference between you and me,” Lamond said Petersen told him, “is I get a thrill from breaking the law.”

In the Phrack interview, published on the Internet, an international network of computer networks with millions of users, Agent Steal bragged about breaking into Pacific Bell headquarters with Poulsen to obtain information about the phone company’s investigation of his hacking.

He said they found “a lot of information regarding other investigations and how they do wiretaps.”

“Very dangerous in the wrong hands,” replied Bowen, according to a transcript of the interview.

“We are the wrong hands,” Petersen said. Bowen said Petersen still calls him from time to time.

Petersen was arrested in Texas in 1991, where he lived briefly. Court records show that authorities searching his apartment found computer equipment, Pacific Bell manuals and five modems.

An FBI affidavit reveals fear that Petersen could have been eavesdropping on law enforcement investigations. The affidavit says Petersen admitted “conducting illegal telephone taps” and breaking into Pacific Bell’s COSMOS computer program, which allows the user to check telephone numbers and determine the location of telephone lines and circuits.

A grand jury in Texas returned an eight-count indictment against Petersen, accusing him of assuming false names, accessing a computer without authorization, possessing stolen mail and fraudulently obtaining and using credit cards.

The case was later transferred to California and sealed, out of concern for Petersen’s safety, authorities said. The motion to seal, obtained by Sherman, states that Petersen, “acting in an undercover capacity, currently is cooperating with the United States in the investigation of other persons in California.”

Petersen eventually pleaded guilty to six counts, including rigging a radio station contest with a $20,000 prize. He faced a sentence of up to 40 years in jail and a $1.5-million fine, but the sentencing was delayed several times while, Sherman believes, Petersen continued working for the government. Lamond said Petersen told him the FBI was paying him $600 a month “to help them track down hackers.”

Then on Oct. 18, 1993, 15 months after entering his first guilty plea, Petersen was confronted outside federal court by Schindler, who asked if he had been committing any crimes while on bail. Petersen said he had, according to Schindler. Petersen met briefly with his attorney, then took off.

“I’ve got a big problem and I’m splitting,” a friend said he told him the same day.

Attempts to reach Petersen were unsuccessful and his attorney, Morton Boren, said he has “no knowledge of Justin committing any crimes.”

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Sherman also scores the government for allegedly allowing Petersen, while an informant, to utilize a Pacific Bell Telephone Co. computer called Switched Access Services, or SAS. Sherman said the computer allows operators to intercept telephone calls and place other calls, making it appear the calls originated from other phones.

Rich Motta, executive director of applications, reliability and support for Pacific Bell, said he would not “take a position one way or the other” on Sherman’s allegations.

While declining to discuss Petersen’s actions, Schindler acknowledged that in the Poulsen case, “we alleged and he pled guilty to the fact of using the SAS system. Among other things, they rigged radio station contests using SAS. It is a test technology they managed to hijack and use for criminal purposes. Once we became aware of it we took steps to correct it.”

There are tantalizing hints at links between Mitnick and Petersen, despite their obvious differences in style. Mitnick was the classic computer jockey, overweight and shy, who asked his eventual wife out on their first date by sending her a computer message. Petersen, on the other hand, is flamboyant and self-assured.

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The California Department of Motor Vehicles has a file on Petersen, but refused to divulge any information about him, saying the file was being used in another case. “The indications are that it’s Mitnick,” said Bill Madison, a spokesman for the agency.

Friends say they think Petersen can survive well on the run. “He’s already got a lot of experience” living undercover, said one friend.

But Mitnick may be having a tougher time. Lewis De Payne thinks his friend would like to find a way out of his predicament. “It is my opinion he would like to surrender to some type of news media that could provide legal counsel,” he said.

In the Phrack interview, Petersen makes no apologies for his choices in life.

While discussing Petersen’s role as an informant, Mike Bowen says, “I think that most hackers would have done the same as you.”

“Most hackers would have sold out their mother,” Petersen responded.

Times staff writer David Colker contributed to this story.