Cybercrime Newsletter March - April 2017

The following is a compendium of news reports, case law and legislative actions over the latest bi-monthly period that may be of interest to our AG offices that are dealing with cyber-related issues. Neither the National Association of Attorneys General nor the National Attorneys General Training & Research Institute expresses a view as to the accuracy of news accounts, nor as to the position expounded by the authors of the hyperlinked articles.

Recent Developments in Cyberspace Law

Recent Developments on Cyber Issues

Facebook Bans Surveillance Use of Its User Data

Facebook announced new policy language intended to clarify that developers cannot use data obtained from either Facebook or Instagram, which it owns, to produce systems or tools that can provide surveillance capabilities. This includes a person’s friend list, location, birthday, profile picture, education history, relationship status and political affiliation.

Report: Smart People Do Dumb Things Online

People who considered themselves as “tech savvy” were 18 percent more likely to be victims of online identity theft, according to a survey of 2000 respondents by online training company CBT Nuggets. The survey also found that people with Ph.Ds were the most unconcerned about security and more frequent victims than high school graduates. Another finding was that 69 percent of those surveyed in the legal industry do not follow online security practices.

AT&T Wins Contract to Build Public Safety Network

The First Responder Network Authority, known as FirstNet, selected AT&T to build the nationwide public safety wireless network for police, firefighters and emergency medical services. Construction is expected to begin later this year, and FirstNet will provide 20 MHz of telecommunications spectrum and payments of $6.5 billion over the next five years to support the network buildout.

Recent State Cybercrime Court Decisions

The North Carolina Court of Appeals ruled that defendant Arthiando Phillips’ act of advertising online and holding the items out as a particular brand, even though he knew the merchandise was counterfeit, established intent on his part to deceive undercover officers and other potential buyers. The case is State v. Phillips, no. COA16-601 (N.C. App. Mar. 7, 2017). Assistant Attorney General Kimberly Murrell represented the State.

The North Dakota Supreme Court upheld a lower court decision denying probationer Jesse White’s motion to suppress evidence where the conditions of his probation allowed police officers to search the cell phones inside his residence as part of the probation search, and officers had reasonable suspicion to conduct a warrantless search of the phones. The case is State v. White, 2017 ND 31 (Mar. 7, 2017).

An Ohio court of appeals affirmed Edward Klingel’s convictions for telecommunications harassment and terrorist threats, as it was established that Klingel engaged in a series of threats toward police on his social networking page which were done in a purposeful and knowing manner for purposes of intimidation. The case is State v. Klingel, no. 15CA010876 (Ohio Ct. App. Mar. 31, 2017).

Recent Federal Cybercrime Court Decisions

The Third Circuit Court of Appeals upheld an order by the U.S. District Court for the Eastern District of Pennsylvania holding a John Doe in contempt for refusing to unlock two external hard drives during a child pornography investigation, finding the decryption order did not violate Doe’s Fifth Amendment rights. The case is U.S. v. Apple Macpro Computer, no. 15-3537 (3rd Cir. Mar. 20, 2017).

The Ninth Circuit Court of Appeals affirmed defendant Robert Rodriguez’s conviction, finding the wiretap affidavits adequately explained why the interception of wire communications was necessary to investigate the conspiracy and the target subjects, and they contained a full and complete statement of facts to establish necessity. The case is U.S. v. Rodriguez, no. 15-50096 (9th Cir. Mar. 14, 2017).

State Legislative Update

The Colorado House passed HB1070, a bill that authorizes a study of drone use by public agencies and a pilot program.

The Hawaii Senate Economic Development, Tourism & Technology Committee passed HB1478, an appropriations bill for funds to test and evaluate drone technologies. The bill has already passed the House.

The Indiana Senate passed with amendments HB1091, which would make it a Level 6 felony to access with intent to view child pornography. The bill has been sent back with the amendments to the House.

The Indiana House passed with amendments SB299, which would create new criminal offenses involving the use of drones, all of which would be Level 6 felonies. The bill was sent back with amendments to the Senate.

The Montana Legislature passed HB147, which would require a search warrant for government access to electronic devices. The bill has been sent to the Governor.

The New Mexico House Judiciary Committee passed SB99, which would prohibit the possession of electronic devices by prisoners. The bill has passed the Senate.

The North Carolina House passed H128, a bill which would prohibit operating a drone over a prison or jail. The bill has been forwarded to the Senate.

The Nevada Assembly passed AB11, which would prohibit operating a drone near a critical facility.

The Oklahoma House passed HB1328, which would prohibit operating a drone over private agricultural property.

The Rhode Island House passed H5304, a bill making it a crime to electronically disseminate sexually explicit images of another without their consent, known as revenge porn, and a crime to force persons to engage in sending more sexually explicit photos under threat of making them public, known as sextortion.

South Dakota enacted SB80, which prohibits operating a drone over a prison or correctional facility, airport or military facility.

Utah enacted SB111, which establishes that only the state can regulate drones within its borders and prohibits local government entities from regulating drones. .

Cybercrime Initiatives in the Attorney General Community

Arkansas Attorney General Leslie Rutledge’s Cyber Crimes Unit special agents arrested Gerald Groomes on 30 counts of possession of child pornography.

Delaware Attorney General Matt Denn announced that Jason Wood pled guilty to two counts of dealing in child pornography and one count of unlawful conduct by a sex offender. Deputy Attorney General Periann Doko represented the State.

Illinois Attorney General Lisa Madigan sent letters to six national career and job search companies over potential age discrimination violations in setting age requirements for job seekers. The letters were sent to Beyond.com, CareerBuilder, Indeed Inc., Ladders Inc., Monster Worldwide Inc. and Vault.

Kentucky Attorney General Andy Beshear announced that Dale Hammond was found guilty of online sexual enticement of a minor and sentenced to one year in prison. The Cyber Crimes Unit and the Department of Criminal Investigations investigated the case.

Massachusetts Attorney General Maura Healey entered into a settlement with Copley Advertising, LLC, prohibiting the company from using mobile geofencing technology to target women entering reproductive health facilities. The case was handled by Assistant Attorney General Jared Rineheimer and Director of Data Privacy and Security Sara Cable assisted by Investigator Kristen Salera.

Mississippi Attorney General Jim Hood’s Cyber Crime Unit investigators arrested William Wicker, Jr. on one count of possession of child pornography after executing a search warrant at Wicker’s home. The case will be prosecuted by Special Assistant Attorney General Brandon Ogburn.

Nevada Attorney General Adam Paul Laxalt announced that John and Joseph Lubera were indicted by a grand jury on nine felony charges for perpetrating an eBay scam. The Luberas used aliases to sell goods such as electronic devices and musical instruments on eBay, but never delivered the purchased goods or refunded buyers’ money. The case was investigated by the Fraud Unit.

New Jersey Attorney General Christopher Porrino announced that Daniel Derringer III was indicted on charges of manufacturing and possession of child pornography and extortion for allegedly using the Internet to blackmail five teenage girls into posing nude and engaging in sexual conduct on web cameras while he recorded them. Deputy Attorney General Lilianne Daniel presented the case to the grand jury.

New Mexico Attorney General Hector Balderas announced that Jeffrey Morrill was sentenced to two years in prison and four years of supervised probation with lifetime sex offender registration after being convicted of two counts of distribution, and one count of possession, of child pornography. The case was prosecuted by Assistant Attorney Generals Jennifer Hughes and Tony Long.

New York Attorney General Eric Schneiderman obtained seven settlements with online third party sellers who used Amazon to sell prohibited toy guns. The companies are Holloweencostumes.com, Holy Monkey, Dentt Inc., GLa LLC, Chevere International Corp., Fatherland Shop and Costume Hub. The case is being handled by Assistant Attorney General Benjamin Bruce assisted by Senior Consumer Frauds Representative Emily Brightman.

Pennsylvania Attorney General Josh Shapiro’s Child Predator Section agents arrested Joseph Wilmer, a chief warrant officer with the National Guard, on charges of online solicitation of a minor.

Texas Attorney General Ken Paxton’s Child Exploitation Unit arrested William Gant on five counts of possession of child pornography, a third degree felony. The investigation began following a Cyber Tipline report from the National Center for Missing and Exploited Children.

Vermont Attorney General Thomas Donovan announced that Stuart Lizotte, Jr. was sentenced to 22 years to life on charges of aggravated sexual assault and distributing and possession of child pornography. The investigation into Lizotte ensued from a Cyber Tipline report.

Utah Attorney General Sean Reyes’ investigators executed warrants to seize evidence of an alleged statewide enterprise involving illegal gambling machines. The operation, jointly executed with state and local law enforcement partners, identified an estimated 500 machines in more than 130 locations.


Hedda Litwin is the Editor of the Cybercrime Newsletter and may be reached at 202-326-6022. The Cybercrime Newsletter is a publication of the National Association of Attorneys General. Any use and/or copies of this newsletter in whole or part must include the customary bibliographic citation. NAAG retains copyright and all other intellectual property rights in the material. For content submissions or to contact the editor directly, please e-mail hlitwin@naag.org.

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