A few weeks ago, in ELC 470 class, I spoke in vague terms about a compression hoax that I investigated as part of a due-diligence effort, while employed at ATI Technologies (ATI subsequently merged with AMD, the company that makes the chips in your PC). A friend of mine will soon be joining Intel in Portland, and this prompted me to see if I could dig up more information on this topic (it involved Intel’s video “home” group in Portland). It turns out that this was the early-ish part in the history of an elaborate scam that wound up getting millions from the CIA, and reportedly nearly had civilian planes shot down! My report on the company strongly suggested that there was a hoax being perpetrated, but at the time I didn’t have enough information to prove it beyond doubt. The hucksters skillfully avoiding saying too much, and never returned requests for compression samples to analyze.
A partner at ATI who joined me in the due diligence investigation reported back enthusiastically on the promise of the technology. The positive response that this hoax received from highly intelligent people was pretty amazing and scary, considering that there had been a number of fairly well-publicized video compression scams during the previous decade.
I don’t really know how the compression scam morphed into the intelligence scam, but my vague recollection is that the compression scam was pre-9/11. So the advent of 9/11 probably gave the scammers an opportunity to deftly weasel away from the Intel racket (which would likely have blown up shortly), and start fresh with the CIA.
Here’s some info from an article in “The Register”:
A long and highly entertaining Playboy article explains that in 2003, 50-year-old Dennis Montgomery was chief technology officer at Reno, Nevada-based eTreppid Technologies. The firm began as a video compression developer, but Montgomery took it in new and bizarre directions.
He reportedly convinced the CIA that he had software that could detect and decrypt “barcodes” in broadcasts by Al Jazeera, the Qatari news station.
The Company was apparently impressed enough to set up its own secure room at the firm to do what Montgomery called “noise filtering”. He somehow produced “reams of data” consisting of geographic coordinates and flight numbers.
In December 2003, it’s claimed CIA director George Tenet was sufficiently sold on Montgomery’s data to ground transatlantic flights, deploy heavily armed police on the streets of Manhattan and evacuate 5,000 people from the Metropolitan Museum of Art.
Homeland Security secretary Tom Ridge told the press the terror alert was the result of “credible sources – about near-term attacks that could either rival or exceed what we experienced on September 11”.
And more is detailed in a book:
https://books.google.com/books?id=P7zaAgAAQBAJ&pg=PA48&lpg=PA48&dq=etreppid+pay+any+price&source=bl&ots=W0XWZj083E&sig=ZaZAnjo9gKWEsr4NKPYcvWGI4sc&hl=en&sa=X&ei=G0gMVZHKHIuzggSI1ILwAw&ved=0CB8Q6AEwAA (Links to an external site.)
Another interesting article at:
http://www.nytimes.com/2011/02/20/us/politics/20data.html?_r=0 (Links to an external site.)
The C.I.A. never did an assessment to determine how a ruse had turned into a full-blown international incident, officials said, nor was anyone held accountable. In fact, agency officials who oversaw the technology directorate — including Donald Kerr, who helped persuade George J. Tenet, then the director of central intelligence, that the software was credible — were promoted, former officials said. “Nobody was blamed,” a former C.I.A. official said. “They acted like it never happened.”