For Jerry Schneider, crime paid pretty well, but catching criminals pays even better. Three years ago Schneider, an electronics engineering senior at UCLA, was stealing and selling $20,000 worth of telephone equipment a week. When a disgruntled colleague snitched to Ma Bell, Schneider pleaded guilty to pilfering a total of $1 million in materiel. But his 10-year sentence was suspended after he agreed to cooperate with police. He thereupon revealed how for two years he had used his electronic know-how to dial into the phone company’s own computer and direct its supply department to deliver expensive equipment to him. Schneider served just 40 days in a work camp, where he got a good tan—and the idea for his new career.
Today he has incorporated himself as a computer sleuth to help catch thieves like Jerry Schneider. “Computer crime is becoming very serious,” he says. “A lot of people are learning about computers, but they aren’t really dealing with ethical considerations. Nobody ever taught me that I could do good things and bad things with machines—just that I could do things.”
In his first year as an investigator, Schneider handled some 40 cases and grossed $1 million in fees. He’s looked into the theft of trade secrets, stock manipulation, forgery, and frauds involving securities, credit cards and election results. “The perpetrators are not violent,” says Schneider, speaking of types like himself. “They’re willing to surrender to authorities when caught.” But, according to Schneider, even when he cracks a case, prosecution rarely follows: “If a bank is ripped off for $2 million by computer and the news gets out, suddenly there’s a run on the bank.”
Schneider, now 24, grew up in Los Angeles, where he liked to fool around with electronic phone systems instead of girls. During his lunch breaks he combed the city for phone trucks and conned the drivers out of parts, claiming they were for school projects. Soon he was paying the drivers cut-rate prices for the parts and reselling them at a profit. He built up a large inventory and began to advertise in telephone trade journals, establishing a clientele among small intercom companies in the area. One day a company ordered some equipment that he did not have on hand. It was then that he decided to try to crack the telephone company’s supply system.
Posing as a journalist for a computer magazine—with the obligatory camera around his neck—Schneider gained access to the telephone computer center, snooped around and asked questions. After six months of research and cogitation, Schneider thought he had it. He tapped out an order for an $8 wastebasket on his touch tone phone, using the proper code to indicate the item, the address for delivery and the in-house account number to charge it to. Lo and behold, the wastebasket arrived and Schneider was in business. For two years he operated as the Los Angeles Telephone and Telegraph Company in West L.A., with 10 full-time employees and a warehouse piled with $100,000 worth of stolen equipment at any time. But even before he was pinched, Schneider says, “I was getting bored.”
Though he never became an engineer, as his mother hoped, Schneider is a devoted son who rarely misses a Sunday breakfast of lox and bagels with her at a Beverly Hills deli. Despite his record with the phone company, he has had no problem getting two lines and six extensions installed at home. Now Ma Bell is making money from Schneider—his phone bills run between $700 and $900 a month.