FBI Defends Dallas Equipment Seizures

The FBI is defending its actions in several controversial raids on Dallas data centers, in which it seized equipment belonging to customers with no visible ties to the fraud charges the agency was investigating. Owners of the two companies whose data centers were targeted, Core IP and Crydon, say the FBI seized all of the equipment in their data centers, interrupting service for dozens of companies.  

The FBI is investigating allegations from AT&T and Verizon that the telcos were defrauded out of millions of minutes of VoIP traffic by companies housed in space Crydon was leasing at the Dallas Infomart carrier hotel, according to an affidavit filed as part of the case, which also mentions Core IP and owner Matthew Simpson. The FBI raided Crydon's facility on March 12, and seized equipment from the Core IP data center at the 2323 Bryan carrier hotel in Dallas on April 2. 

What remains unclear is why the FBI chose to seize all of the equipment in multi-tenant data centers. Crydon owner Mark Faulkner says his data center housed gear for more than 300 customers, while Simpson claims Core IP had 50 customers. In an interview with Wired's Threat Level, an FBI spokesman explained the agency's rationale for the seemingly indiscriminate equipment seizure.

"My understanding is that the way these things are hooked up is that they're interconnected to each other," Mark White, spokesman for the FBI's Dallas office, told Threat Level. "Company A may be involved in some criminal activity and because of the interconnectivity of all these things, the information of what company A is doing may be sitting on company B or C or D's equipment."     

The affidavit filed by FBI Special Agent Allyn Lynd repeatedly emphasizes the difficulty of making an on-site evaluation of computer equipment in a data center. "Searching computer systems is a highly technical process which requires specific expertise and specialized equipment," Lynd says in his affidavit.

"There are so many types of computer hardware and software in use today that it is impossible to bring to the search site all of the necessary technical manuals and specialized equipment necessary to conduct a thorough search," Lynd continues. "A controlled environment, such as a law enforcement laboratory, is essential to conducting a complete and accurate analysis of the equipment and storage devices from which the data will be extracted."

Critics charge that by getting involved in a case built around unpaid telecom bills, the FBI is "acting as a collection agency for AT&T and Verizon," as Slashdot put it. The FBI's White insisted that the facts supported a criminal investigation.

"We wouldn’t be looking at it if it was a civil matter," White told Threat Level. "And a judge wouldn’t sign a federal search warrant if there wasn’t probable cause to believe that a fraud took place and that the equipment we asked to seize had evidence pertaining to the criminal violation."

CMG Booking, which represents Catholic speakers and musicians, is among the companies that has spoken out publicly about the incident. CMG was hosted at Core IP, but has posted a temporary site with Rackspace. Owner Joe Condit told CBS 11 TV in Dallas that the outage has damaged his business.  

"It's crippled us completely," Condit said. "Now that we don't have a website, we have no business, and a lot of speakers are without representation. ... "We're all for catching the bad guys and the criminals. It also has to be recognized that young, small businesses can't take a hit like this, especially in this time."