[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





                  HACKED OFF: HELPING LAW ENFORCEMENT
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                             FIELD HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 29, 2011

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 112-43












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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                   SPENCER BACHUS, Alabama, Chairman

JEB HENSARLING, Texas, Vice          BARNEY FRANK, Massachusetts, 
    Chairman                             Ranking Member
PETER T. KING, New York              MAXINE WATERS, California
EDWARD R. ROYCE, California          CAROLYN B. MALONEY, New York
FRANK D. LUCAS, Oklahoma             LUIS V. GUTIERREZ, Illinois
RON PAUL, Texas                      NYDIA M. VELAZQUEZ, New York
DONALD A. MANZULLO, Illinois         MELVIN L. WATT, North Carolina
WALTER B. JONES, North Carolina      GARY L. ACKERMAN, New York
JUDY BIGGERT, Illinois               BRAD SHERMAN, California
GARY G. MILLER, California           GREGORY W. MEEKS, New York
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
SCOTT GARRETT, New Jersey            RUBEN HINOJOSA, Texas
RANDY NEUGEBAUER, Texas              WM. LACY CLAY, Missouri
PATRICK T. McHENRY, North Carolina   CAROLYN McCARTHY, New York
JOHN CAMPBELL, California            JOE BACA, California
MICHELE BACHMANN, Minnesota          STEPHEN F. LYNCH, Massachusetts
THADDEUS G. McCOTTER, Michigan       BRAD MILLER, North Carolina
KEVIN McCARTHY, California           DAVID SCOTT, Georgia
STEVAN PEARCE, New Mexico            AL GREEN, Texas
BILL POSEY, Florida                  EMANUEL CLEAVER, Missouri
MICHAEL G. FITZPATRICK,              GWEN MOORE, Wisconsin
    Pennsylvania                     KEITH ELLISON, Minnesota
LYNN A. WESTMORELAND, Georgia        ED PERLMUTTER, Colorado
BLAINE LUETKEMEYER, Missouri         JOE DONNELLY, Indiana
BILL HUIZENGA, Michigan              ANDRE CARSON, Indiana
SEAN P. DUFFY, Wisconsin             JAMES A. HIMES, Connecticut
NAN A. S. HAYWORTH, New York         GARY C. PETERS, Michigan
JAMES B. RENACCI, Ohio               JOHN C. CARNEY, Jr., Delaware
ROBERT HURT, Virginia
ROBERT J. DOLD, Illinois
DAVID SCHWEIKERT, Arizona
MICHAEL G. GRIMM, New York
FRANCISCO ``QUICO'' CANSECO, Texas
STEVE STIVERS, Ohio
STEPHEN LEE FINCHER, Tennessee

                   Larry C. Lavender, Chief of Staff











                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 29, 2011................................................     1
Appendix:
    June 29, 2011................................................    33

                               WITNESSES
                        Wednesday, June 29, 2011

Hammac, Douglas ``Clay'', Criminal Investigator, Shelby County 
  Sheriff's Office, Shelby County, Alabama.......................    14
Hillman, Randall I., Executive Director, Alabama District 
  Attorneys Association..........................................     9
Smith, Alvin T., Assistant Director, Office of Investigations, 
  United States Secret Service...................................     7
Warner, Gary, Director of Research in Computer Forensics, The 
  University of Alabama Birmingham...............................    12

                                APPENDIX

Prepared statements:
    Hammac, Douglas ``Clay''.....................................    34
    Hillman, Randall I...........................................    39
    Smith, Alvin T...............................................    43
    Warner, Gary.................................................    50

 
                        HACKED OFF: HELPING LAW
                      ENFORCEMENT PROTECT PRIVATE
                         FINANCIAL INFORMATION

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                        Wednesday, June 29, 2011

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 2:03 p.m., at the 
National Computer Forensics Institute, 2020 Valleydale Road, 
Suite 209, Hoover, Alabama, Hon. Spencer Bachus [chairman of 
the committee] presiding.
    Members present: Representatives Bachus and Fincher.
    Also present: Representative Rogers.
    Chairman Bachus. Good afternoon. I see we have a group of 
witnesses seated. We also have several people in the audience 
who played an integral part in helping fund the project: Tony 
Petelos, the Mayor of Hoover; and Tommy Smith of the District 
Attorneys Association.
    Randy, do you want to introduce some of them?
    Mr. Hillman. Yes, sir. Yes, sir, Mr. Chairman. There are 
several elected DAs here. Tommy Smith is the district attorney 
from Tuscaloosa County. He's president of the association.
    Chairman Bachus. Where is Tommy? There he is. Hey, Tommy.
    Mr. Hillman. With your permission, Mr. Chairman, could I 
ask them to stand?
    Chairman Bachus. Yes.
    Mr. Hillman. Any elected district attorneys, would you 
stand, please?
    Mr. Chairman, we have Chris McCool, the district attorney 
in Fayette, Lamar, and Pickens County; Brandon Falls, the DA in 
Jefferson County; Steve Marshall, the DA in Marshall County; 
and Tommy Smith, president of the association. Thank you.
    Chairman Bachus. Do you have your investigators here?
    Mr. Hillman. Yes, sir.
    Chairman Bachus. And we have several members of the 
legislature. Would you stand up?
    Mike, since you're the senior guy, why don't you introduce 
yourself? You are in front.
    Mr. Hill. I'm Mike Hill, a State Representative from Shelby 
County.
    Mr. Johnson. Wayne Johnson, District 22 Representative, 
from Huntsville.
    Senator Blackwell. Slade Blackwell, Senator from 
Birmingham.
    Chairman Bachus. And Jan Williams in the back.
    Mr. Demarco. And Paul DeMarco.
    Chairman Bachus. And Paul DeMarco, Representative DeMarco.
    So we appreciate--I thank everyone in the civil service and 
the District Attorneys Association. The State of Alabama was 
very supportive in their funding. I recognize the Shelby County 
Sheriff. Do you want to stand up and introduce yourself?
    Do you have any other sheriffs? I'll let you introduce 
them.
    Sheriff Curry. Sir, I don't think there are any other 
sheriffs present.
    Chairman Bachus. Okay. We appreciate Shelby County's 
participation. I'm going to--I'm supposed to read this right 
now.
    Without objection--actually, I can do it at the end of the 
hearing.
    At this time, is there anybody else present who--the Secret 
Service--Gary, do you have anybody you want to introduce?
    Mr. Warner. If I may, yes, sir. We have the privilege of 
hosting a National Science Foundation group of researchers this 
summer, and several of our past student researchers from that 
team have joined us today, if they could stand briefly.
    Allison Peck and Hugo and Megan were selected out of 116 
applicants to come and study computer forensics at UAB this 
summer as a courtesy of the National Science Foundation. So we 
want to thank the National Science Foundation for them being 
with us.
    Chairman Bachus. Thank you. At this time, we're going to 
have opening statements from the witnesses. I'll introduce the 
witnesses.
    I really want to kind of emphasize some things that some of 
you might not get into. I'm going to do it sort of from the 
standpoint of, I'm a former trial lawyer, which may be a dirty 
word.
    But computer forensics is the process of extracting, 
analyzing, and preserving data. It is the process of getting it 
successfully introduced either at trial or into evidence or 
ready for evidence. It's a virtual gold mine of very vast, 
precise, and most importantly in a trial setting, our 
investigation of reliable and valuable information.
    It's not a human being sitting on a witness stand with 
evidence that is imprecise or contradictory, subject to memory 
loss or prejudice or motive.
    Two witnesses may testify about the same conversation. Each 
tells a different story, and each tells sometimes what they 
think is true.
    Several witnesses might testify and still the picture is 
unclear and a gap exists. They tell a story about a steamboat 
up in New England that went around a bay, and it sank right in 
front of hundreds of people. And they said they were unable to 
determine what happened because there were too many witnesses.
    And that is somewhat true. That's certainly not true with 
forensic evidence. It's altogether different.
    Think about what's on your computer at home. It's 
thoroughly accurate. It's the most factual information 
available on what, when, and to whom something was said or when 
you did something, like in the Casey Anthony trial.
    That information about chloroform was downloaded and, in 
fact, the technician who testified in the Casey Anthony trial 
on national TV was trained in this very center. And if you saw 
that testimony, the defense attorneys were unable to shake her. 
She was prepared for everything that they had to do. And also, 
I'm sure that she assisted the judge, or at least the 
prosecution, in the proper predicate to be laid so that there 
wouldn't be reversible error.
    I know we have judges here today. We have a group of 26 
judges from all around the Nation who are learning how to 
properly introduce evidence, how to rule on it so there won't 
be reversible error as they preside over a trial.
    And I think law enforcement is very frustrated when a case 
goes up on appeal and it's turned back for a procedural 
technicality.
    Not only emails and instant messages, but your personal and 
financial records are on a computer. Letters and memos, Web 
sites you have visited, it's all there.
    I heard someone say this: It's like reading your mind in 
realtime, when you basically almost know what someone is 
thinking, what their motive is, and what's going on.
    It can be highly revealing. And if you're engaged in 
criminal conduct--that's what this is all about--it's highly 
incriminating.
    Last year--I think I have it in my written remarks--one of 
your software companies estimated that there's $1 trillion of 
software fraud worldwide. Here, at least $37 billion worth of 
losses.
    Just this month, we have seen cyber security attacks and 
cyber attacks on Citigroup, on the Federal Reserve, and on the 
CIA.
    So we're not talking about just criminal activity or 
financial crime, which was the motivation originally behind 
this center, but we're talking about actually espionage and 
people all over the world. And we'll get some terrific 
testimony.
    I want to applaud the Secret Service. This institute was 
opened at a very--District Attorney Association--I think this 
was originally you working with the Secret Service, the 
District Attorneys of the United States. I think the sheriff's 
department and the police department were involved. You wanted 
a place to train people.
    This is very complex, very detailed, very precise work, and 
it's very expensive, too, because of the software that is 
needed. It's always changing and evolving. But law enforcement 
and sheriffs and police departments didn't have the resources 
to combat these crimes.
    And if you think about it, any time someone commits a 
crime, they're going to use an electronic device. It's almost 
impossible to do that without using cell phones.
    We're not talking about just computers. We're talking about 
cell phones. We're talking about iPads. We're talking about 
BlackBerrys.
    I know probably a year after this center opened, a 
detective who was trained here went back to a small town in 
Virginia and got out a computer that had been over in the 
corner for about 3 years, and they tried unsuccessfully to get 
anything out of it.
    Using the software he was given here, he was able to pull 
it off the computer and successfully prosecuted a guy for 
sodomizing a 6-year-old child.
    So it's pretty hard to put a figure on how valuable this 
center is. But, thanks to the Secret Service, thanks to the 
Alabama and National District Attorneys Office and the 
sheriff's department, thanks to the State legislature and the 
City of Hoover and Shelby County, and many other trials.
    We have had at least one case where someone was being 
investigated for a murder, and they were cleared, forensic 
evidence cleared them. So you had someone who may have been 
charged and was able to prove their innocence.
    The witnesses today are going to tell you about some of the 
details of cyber crime, which is now, I guess, the fastest 
growing crime in America. And none of us are safe.
    Of course, I think very seldom is there not a person who is 
either--has been hacked or will be hacked, their computer.
    I don't know whether it was my computer or someone else's 
that was hacked, but I have had charges on my credit card, and 
I was notified the very next day that it had, in fact, 
happened. And it's kind of funny when you go on there--or not 
funny, but you go in and you actually see those charges.
    But with that, I would like to introduce and to turn it 
over to Mike Rogers, one of the senior members of the Homeland 
Security Committee, to make an opening statement.
    Mr. Rogers. I just wanted to thank Spencer for calling this 
hearing. As he mentioned, I was on the Homeland Security 
Committee before it was a standing committee. It was a select 
committee before 9/11, and we recognize the real threat of 
cyber security authorities have for our Nation. The Department 
has been working aggressively to that end.
    I'm very pleased with the presence of this entity, this 
site in Alabama. Folks don't think about this kind of cutting-
edge technology here in Alabama, but it is here, and we're very 
proud of it.
    Randy and his folks have done a good job in the outset of 
keeping me apprised of what they have been doing. I have been 
very supportive, and I know this will be very critical in 
continuing to protect our Nation.
    A lot of people think about the Department and the FBI and 
the Secret Service being on the cutting edge, but the fact is, 
we can't do it without local law enforcement. These 
partnerships that we have in local communities are critical in 
identifying these cells, the people who are problems, the 
threats, and monitoring activity.
    And I have been amazed through the work of this entity, 
like Spencer said, how much of our lives is on a gadget, 
whether it's a computer or BlackBerry or cell phone.
    And even when it comes to small drug deals, there is a cell 
phone involved. This is very critical technology, and I'm very 
supportive of it and look forward to the testimony we have here 
today.
    Like Spencer, I had Secret Service knock on my door one day 
and tell me that someone had attempted to steal my identity, as 
well as the identities of about 20 other Members of Congress. 
Fortunately, they didn't succeed, but it could be anybody. You 
never know who they are. Thank you. We look forward to hearing 
the testimony and asking a few questions.
    Chairman Bachus. Thank you. And actually, I asked Gary 
Warner to introduce those people, but you're with UAB.
    That reminds me, Gary Warner actually was one of the people 
who called and told me that my congressional site had been 
hacked.
    So anyway, let me introduce our witnesses.
    Oh, I'm sorry. Steve is one of my good friends and one of 
the newly elected Republicans to the Congress and to the 
Financial Services Committee. In fact, he is the newest member 
of the Financial Services Committee. Steve Fincher. And--
    Mr. Fincher. Thank you, Mr. Chairman.
    Chairman Bachus. I take back everything I said about your 
tie.
    Mr. Fincher. Well, Mr. Chairman, I'm wearing my orange tie 
today for Auburn. It's not Tennessee. It's Auburn. My middle 
son is a big Auburn fan. I was able to bring him down last year 
to homecoming and it is just a great, great college, a great 
place.
    I was listening to the chairman and Congressman Rogers 
talking about hacking into our credit cards. And I thought one 
day that mine had been hacked into. Come to find out, my wife 
had been shopping. Seriously, that's what I thought it was.
    So it's an honor to be here with you guys today. We can't 
say enough about local, State, and Federal law enforcement and 
what you guys do in the legal system. It's not if we're going 
to have an attack; it's when. We're either moving forwards or 
backwards.
    And it's an honor to be able to serve in the leadership of 
someone like Chairman Bachus because he gets it.
    I'm from Tennessee and I'm just a common sense guy. My 
background is a seven-generation cotton farmer. We need to make 
sure that our priorities are in the right order. And a lot of 
times, they're not.
    But you guys are offering a great service to this country, 
and you're going to stand in the gap when we have another 
attack and when they attack us in this way, because as many of 
us know, this could shut our country down if the right people 
get the right information and go about it the right way.
    So I am very, very interested in hearing what the panel has 
to say today, and it's good to be back in the State of Alabama, 
one of our bordering States.
    With that, I will turn it back over to Chairman Bachus.
    Chairman Bachus. I'm going to introduce the witnesses at 
this time. I just noticed that Joe Borg is here, the Alabama 
Securities Commissioner. Joe, would you stand up?
    Randy, did you introduce everyone in the unit? And how 
about the Secret Service Commission? Do have anybody you want 
to introduce? I know you have several people here.
    Mr. Hillman. I do, actually.
    Chairman Bachus. In fact, it was testified to before some 
of our security members, which was incredible.
    Mr. Hillman. I do, Mr. Chairman. Thank you. I would like to 
recognize several of our people who are here today: Special 
Agent in Charge Ken Jenkins, who is in charge of our Criminal 
Investigative Division, which again is our sort of nexus of 
nationwide oversight; Deputy Special Agent in Charge Pablo 
Martinez, whom I think you have met before; and Special Agent 
in Charge Roy Sexton of the Birmingham office, which is 
responsible for the entire State of Alabama and has a lot of 
interaction obviously with this institute among others that are 
here.
    Chairman Bachus. Thank you. Will you gentlemen stand up? 
Thanks.
    Thank you. And let me say this: When I was talking to 
different people who played a role, obviously the bigger role 
is the Secret Service. The Secret Service is the entity that 
runs this center--along with the cooperation of the district 
attorneys--and makes their expertise available. So we can't 
thank you enough, I think, for the excellent job you do.
    And this obviously goes beyond counterfeiting, and it is a 
tremendous challenge. So thank you very much.
    Spencer Collier is the Alabama Homeland Security Director. 
Thank you.
    Mr. Hillman. U.S. Attorney Joyce Vance is here.
    Chairman Bachus. Okay. I had no idea. Would you please 
stand up?
    Ms. Vance. I am happy to be here with you.
    Chairman Bachus. Thank you very much. Congratulations on 
your appointment.
    Ms. Vance. Thank you.
    Chairman Bachus. Her father is Judge Vance, who is actually 
a sitting judge who was attacked and wounded by a bomb.
    But anyway, we'll go ahead now and introduce our witnesses. 
Gary Warner is director of research in computer forensics at 
the University of Alabama at Birmingham where he teaches in the 
computer and information science and justice science 
departments with more than 20 years of IT experience.
    He previously served on the national boards of the FBI 
InfraGard program and the DHS Energy ISAC. His lab works 
closely with the Birmingham FBI cyber crimes task force and the 
Birmingham USSS electronic crimes task force with whom he 
shares his research on spam, malware, investigating on-line 
crime, and--I guess that's phishing. How do you--
    Mr. Warner. Phishing. It's tricky with the ``P-H.''
    Chairman Bachus. Thank you.
    Randy Hillman is the executive director of the Alabama 
District Attorneys Association of the State Office for 
Prosecution Services, a position he has held since January 
2002. Prior to this, he was chief assistant DA for the Shelby 
County District Attorney's Office.
    And Robbie is here. Were you introduced, Robbie?
    Mr. Owens. I was left out as usual.
    Mr. Hillman. Thank you, Mr. Chairman. I appreciate that.
    Robbie Owens is the district attorney from Shelby County, 
which is where this facility is located.
    Chairman Bachus. Thank you.
    During Mr. Hilman's tenure, he led trial counsel in seven 
capital murder prosecutions where the defendant received the 
death penalty or life without parole, many of them tried before 
my former partner, and he tried numerous other high-profile 
cases, including the road rage murder.
    Randy is a member of the Alabama Bar Association, Shelby 
County Bar Association. He's on the Board of Trustees at the 
University of West Alabama and the Board of Directors for Owens 
House, which is a child advocacy center.
    He was really a moving force in visualizing the need for 
the National Computer Forensic Institute, and working with the 
Secret Service in partnership to bring it here. It wouldn't 
have happened without Randy and his association. Or it may have 
cost a whole lot--
    I don't know whether you know this, in the crowd, but the 
City of Hoover--you can see what a beautiful facility this is--
donated this at no charge for 7 years rent free.
    One of the sites they were considering was up at Aniston 
Army Depot, where they were going to spend several million 
dollars to renovate it.
    Mr. Rogers. Thank you for reminding everybody we lost.
    Chairman Bachus. I actually always wanted to renovate 
something and--it was one of the few things that hadn't gone to 
West Virginia. You can actually get here from there.
    But Clay Hammac is a 7-year veteran of the Shelby County 
Sheriff's office, currently assigned as a criminal investigator 
specializing in financial and electronic crimes. He's a 2008 
graduate of the National Computer Forensic Institute and has 
utilized his skills and training received here to investigate 
crimes ranging from the typical on homicide to organized 
financial crime rings. And that was the case off 280 there?
    Mr. Hammac. Yes, sir. That's right.
    Chairman Bachus. That was one of the most heinous crimes 
you can imagine.
    Mr. Hammac holds a degree in finance from the University of 
South Alabama, and an MBA from Regis University in Denver.
    And finally, I guess the star witness is A.T. Smith, 
Assistant Director of the United States Secret Service. We're 
honored to have you here in Hoover.
    A.T. Smith is from Greenville, South Carolina, and was 
appointed Assistant Director of the Office of Investigations in 
October 2010. In this capacity, he develops and implements 
policy for all Secret Service criminal investigations 
pertaining to counterfeit currency and financial crimes and 
electronic crimes.
    Mr. Smith is responsible for oversight of the Secret 
Service Criminal Investigative Division, Forensic Service 
Division, Investigative Support Division, Asset and Forfeiture 
Division, International Programs Division, and over 3,000 
personnel assigned to 140 domestic and 22 international offices 
in 6 continents. Some of those are pretty unfriendly 
territories.
    So we welcome our witnesses. Do any of you want to suggest 
an order we go in? Why don't you go first, Mr. Smith, since you 
are here as our guest?

  STATEMENT OF ALVIN T. SMITH, ASSISTANT DIRECTOR, OFFICE OF 
          INVESTIGATIONS, UNITED STATES SECRET SERVICE

    Mr. Smith. Thank you, and good afternoon, Chairman Bachus 
and members of the committee.
    If I might, just at the outset, let me say that with regard 
to what you said about the Secret Service being integral in the 
forming of this institute, that is true.
    But we are equal among partners. And we are all in this 
together. I can assure you that no one has worked harder, again 
as you pointed out, than Randy Hillman to design and coordinate 
and actually get this facility to where it is today. So I want 
to publicly thank him as well.
    Thank you for the opportunity to testify on the emerging 
threat that cyber criminals pose to both personal and business 
finances and to financial institutions.
    On February 1, 2010, the Department of Homeland Security 
delivered the quadrennial Homeland Security Review, which 
established a unified strategic framework for Homeland Security 
missions and goals and underscored the need for a safe and 
secure cyberspace.
    In order to be successful in this mission, we have to 
disrupt criminal organizations and other malicious hackers 
engaged in high consequence or widescale cyber crime.
    In this arena, the Secret Service has been leading the 
Department's effort for some time. As the original guardian of 
the Nation's financial payment systems, the Secret Service has 
a long history of protecting American consumers, industries, 
and financial institutions.
    Over the past decade, Secret Service investigations have 
revealed a significant increase in the quantity and complexity 
of cyber crime cases. Broader access to advanced computer 
technologies and the widespread use of the Internet has 
fostered the proliferation of computer-related crimes targeting 
our Nation's financial infrastructure.
    Current trends show an increase in network intrusions, 
hacking attacks, malicious software, and account takeovers 
which result in data breaches that affect every sector of the 
American economy.
    As a result of this increase and in line with the 
Department's focus of creating a safer cyber environment, the 
Secret Service developed a multifaceted approach to combat 
cyber crime by expanding our electronic crimes special agent 
program, expanding our network of Electronic Crimes Task 
Forces, creating a cyber intelligence session, expanding our 
presence overseas, performing partnerships with academic 
institutions, focusing on cyber security, and working with the 
DHS to establish the National Computer Forensic Institute.
    The Secret Service partnerships with State and local law 
enforcement remain at the very core of our approach and are 
reflected in our task force model and through the work 
conducted here at the NCFI.
    The 31 Electronic Crimes Task Forces (ECTFs) that the 
Secret Service established domestically and abroad exemplify 
the Secret Service's commitment to sharing information and to 
best practices.
    Membership in these ECTFs include more that 4,000 private 
sector partners; nearly 2,500 international, Federal, State, 
and local law enforcement officials; and more than 350 academic 
partners.
    Based on this model, the Secret Service has been 
responsible for the arrest of numerous transnational cyber 
criminals who were responsible for some of the largest network 
intrusion cases ever prosecuted in the United States.
    These intrusions resulted in the theft of hundreds of 
millions of account numbers and a financial loss of 
approximately $600 million to the financial and retail 
institutions nationwide directly impacting the lives of many 
American citizens.
    Recognizing that cyber crime is not just a Federal problem, 
the Secret Service partnered with the National Protection and 
Programs Director of DHS, the Alabama District Attorneys 
Association, the State of Alabama, and the City of Hoover to 
create a center where State and local law enforcement 
officials, prosecutors, and judges could be trained on cyber-
related crimes.
    I am proud to say that since its establishment, 644 State 
and local law enforcement officials, 216 prosecutors, and 72 
judges representing over 300 agencies from all 50 States as 
well as 2 U.S. Territories have received training from the 
Secret Service here at the NCFI.
    In concert with our Federal, State, and local law 
enforcement partners, the Secret Service will continue to play 
a critical role in preventing, protecting, and investigating 
all forms of cyber crime.
    Chairman Bachus and distinguished members of the committee, 
this concludes my prepared remarks, and I will be happy to 
answer any questions that you may have.
    [The prepared statement of Assistant Director Smith can be 
found on page 43 of the appendix.]
    Chairman Bachus. Thank you. Mr. Hillman?

 STATEMENT OF RANDALL I. HILLMAN, EXECUTIVE DIRECTOR, ALABAMA 
                 DISTRICT ATTORNEYS ASSOCIATION

    Mr. Hillman. Thank you, Mr. Chairman. Chairman Bachus, 
Congressman Fincher, Congressman Rogers, Governor Bentley, 
honorable members of the Alabama legislature, other guests, and 
our respected colleagues in law enforcement, thank you for the 
opportunity to address this committee today.
    In the last 25 years, the criminal justice community has 
witnessed two watershed events with respect to criminal law. 
The first is the advent of DNA evidence. The second, and the 
reason that we're here today, is the creation and proliferation 
of digital evidence and cyber crime.
    In my current position as executive director of the Alabama 
District Attorneys Association, it is my daily job to analyze 
and attempt to meet the needs of law enforcement and 
prosecutors. Without question, the need for digital evidence 
training is one of our most pressing.
    The media work escalation of digital evidence can be 
compared to a tidal wave looming over the criminal justice 
community. This type of evidence is present in the majority of 
all cases, whether it is identity theft, phishing, child 
pornography, murder or any other crime.
    We have very quickly moved from just blood and guts to 
megabytes and megapixels. The question is, do we as law 
enforcement agents and prosecutors have the means to gather 
that evidence? And the answer in most cases is a resounding no, 
we do not.
    Gentlemen, you know better than most anyone that we cannot 
stick our proverbial heads in the sand. We must endeavor to be 
ahead of the curve. We must be ahead of the criminals who would 
prey on our family's financial security. This effort starts 
here at home.
    When I was a child, the bank was a brick building in the 
center of town that you walked into to deposit a check or to 
withdraw money.
    Today, we can access our virtual bank nearly anywhere. This 
convenience, although desirable, makes us extremely vulnerable 
to criminals.
    I will submit to you that not one individual in this room 
has not had their personal data or financial holdings 
compromised in some way due to a surreptitious intrusion by a 
cyber criminal.
    We are not immune and our children are not immune either. 
They are by definition prime targets for identity thieves 
because they have identifiers. They have information that is 
considered pristine because they generally will not discover 
that their identity has been compromised for several years. 
This gives the criminal a very long time to use our identity 
fraudulently.
    We are bringing forth a crop of young adults who will exist 
entirely on technology-based banking and commerce. Today, our 
kids and young adults have credit cards, PayPal accounts, 
PlayStation credit accounts, Wii accounts, and Apple APP 
accounts.
    Each of these areas are fertile grounds for a cyber 
criminal. And once one of these accounts is compromised, who we 
will call? More often than not, it will be your local police 
department or your local prosecutor who will then be asked to 
investigate and prosecute these bad guys.
    Additionally, at the opening of this facility in 2007, 
Chairman Bachus stated that terrorists such as Osama Bin Laden 
were using technology and the Internet to fund and to manage 
their worldwide terrorist networks most often by identity 
theft, bank fraud, and phishing.
    Recently, his comments were proven true after the capture 
and killing of Bin Laden. Bin Laden had in his possession 
hundreds of computer disks and digital devices containing 
priceless evidence that will be used to understand terrorist 
networks and ultimately help eliminate them.
    Similarly, domestic and international terrorists and common 
criminals fund their criminal enterprises through the use of 
cyber crime and digital devices. They do this by compromising 
banking systems through network intrusion and stolen 
identities. This not only cripples our banking industry and 
financial institutions, but it devastates our citizens.
    Some would say this is strictly a Federal matter, Mr. 
Chairman, but I wholeheartedly disagree. The State and local 
law enforcement in this country tries over 95 percent of the 
criminal cases. Those officers on the street are the first 
responders and they are absolutely critical to building an 
identity theft or network intrusion case and will, in the end, 
provide the key evidence that will convict criminals and 
provide restitution for victims.
    Members of this committee, it's imperative that all law 
enforcement agents and prosecutors be given the ability to 
protect your constituents. It is both shocking and tragic that 
law enforcement is ill equipped and trained to respond to a 
digital crime scene.
    I submit to you that the only way we can change this is by 
greatly expanding training for law enforcement and prosecutors 
and by providing them with the equipment they need to do their 
jobs properly.
    Unless and until we do these things, thieves, scammers, 
pedophiles, and other criminals will continue to go unpunished 
because they know that we simply do not have the ability to 
reach out and catch them.
    Chairman Bachus, Senator Shelby, Alabama District Attorneys 
and my staff at the ADAA set out to address this issue some 
years ago. We experienced the lack of quality computer 
forensics training firsthand. Our trials in attempting to find 
trained law enforcement agents and prosecutors to staff our own 
computer forensics labs were the catalyst.
    Because no one entity made it their mission to train law 
enforcement, prosecutors, and trial judges in digital evidence, 
we were left in a very difficult position of staffing these 
labs. This facility that you are at now, the National Computer 
Forensics Institute, is a direct result of this need and the 
unprecedented cooperation of all levels of government, from the 
highest Federal agencies to the smallest local governments.
    This facility focuses on all computer-related crimes with 
an emphasis on financial crimes, and more importantly, is 
taught by true investigators who have been and are now in the 
field each day. They understand and teach the curriculum from a 
law enforcement perspective, not that of an academician or a 
layman.
    I witness each and every day the inherent value of quality 
digital evidence training and education here, and I know that 
the graduates from this facility have both solved thousands of 
criminal cases and have prevented many others from being 
committed.
    In closing, I would like to thank you for being here, Mr. 
Chairman and members of this committee. Your presence is both a 
sign and a promise that you are committed to a unified front 
against cyber criminals.
    Furthermore, I respectfully challenge you to join me and my 
colleagues in law enforcement to ensure that training 
facilities like NCFI that train authorities to investigate, 
prosecute, and even prevent cyber crimes and other crimes 
remain as one of our top priorities.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Hillman can be found on page 
39 of the appendix.]
    Chairman Bachus. Thank you. And, Gary, before we go to you, 
I notice that one of our Supreme Court judges is here, Michael 
Joiner. Would you stand up, Mike?
    Judge Joiner. Court of Criminal Appeals.
    Chairman Bachus. Court of Criminal Appeals. I appreciate 
you being here. And did you try the four criminals that we were 
talking about earlier?
    Judge Joiner. I tried many of the ones you talked about 
earlier.
    Chairman Bachus. Okay. We appreciate you. Are there any 
other judges or anyone else that I should have introduced?
    I didn't have a list. A lot of times I have a list, but I 
didn't get one.
    Mr. Hillman. Mr. Chairman, former Congressman Bob McEwen is 
with us today.
    Chairman Bachus. Oh, wow! Bob, it is good to see you. Thank 
you. We're honored to have everyone.
    Do we have any other law enforcement officers that we have 
not recognized? Would you stand up? Thank you. I appreciate you 
all being here.
    Chris Curry of Birmingham. So--I guess he's deputy chief; 
is that--
    Mr. Curry. Chief deputy, yes, sir.
    Chairman Bachus. Chief deputy. I want to welcome you.
    With that, Mr. Warner.

  STATEMENT OF GARY WARNER, DIRECTOR OF RESEARCH IN COMPUTER 
        FORENSICS, THE UNIVERSITY OF ALABAMA BIRMINGHAM

    Mr. Warner. Thank you, Mr. Chairman. Mr. Chairman and 
members of the committee, I'm very happy to be before you today 
at this hearing. I think this hearing is a sign of your wisdom 
and your leadership in the financial services area. I'm very 
glad that you chose to have it here in Alabama because there 
are some very neat things happening here at the National 
Computer Forensics Institute and around the State. So we thank 
you for that.
    Some of you may wonder what the University has to do with 
law enforcement. We feel like we're contributing to the cyber 
crime efforts in three main areas.
    First, we're training the next generation of cyber crime 
investigators. Because we have a partnership with our computer 
science and our justice science programs, we feel like we're 
offering a very unique graduate, someone who comes with both a 
formal understanding of the justice process and a computer 
science background to go with it.
    The second area is that we're providing through my research 
lab training and tools and techniques for fighting cyber crime. 
Some of these datasets that we work with, there are a million 
computers involved in a single live net. And you need some 
high-powered computer science if you're going to be able to 
analyze those sorts of datasets.
    The third area that we're working with is in the area of 
outreach and public education. We call it actually reducing the 
victim pool.
    The more we can identify outstanding threats that are 
currently emerging, the more we can protect people by sharing 
information with them in the media and in speaking in specialty 
conferences. We don't just do training for computer scientists; 
we also do training for health care information and workers for 
educators and other organizations.
    I think it's important that the committee understand that 
this is the fastest growing category of crime.
    If we look back to the year 2000, in 2000, there were only 
360 million people on the Internet. And almost all of them were 
in the United States.
    That year, e-commerce really took off for the first time. 
There were $5 billion worth of transactions that year.
    If we go forward a decade to 2010, we're sitting at $164 
billion of online commerce last year, a 3200 percent increase. 
We now have 2 billion users of the Internet, and only 13 
percent of them are in the United States.
    We're now dealing with a situation where the United States 
is the holder of most of the wealth that's accessible to the 
Internet, and yet 87 percent of the Internet users live in 
countries, many with shattered economies, which would like a 
piece of that wealth.
    One of the areas that we're struggling with is the lack of 
computer science that has been applied to this area. Not only 
has the criminal element grown on the Internet, as the economy 
has grown, we're also dealing with very advanced sophisticated 
computer criminals.
    These people are getting advanced computer science degrees, 
Ph.D.s in computer science and economics, and then are unable 
to find a job in their home economies. And they're taking those 
technology skills and working with the Russian Mafia and other 
organizations to come after our money.
    Law enforcement has not had a similar increase in focus in 
high-tech crime fighting. That's one of the things we're 
contributing from the University.
    I'm also very concerned about the lack of complaints. When 
we look at the Federal Trade Commission's consumer sentinel 
report, last year they identified 1.3 million victims of fraud 
and identity theft.
    Unfortunately, all of the best surveys were saying there 
were closer to a million victims of identity theft. Where do 
those other 9.7 million complaints go?
    We have trained our consumers that to be a victim of a 
cyber crime is not something that you should engage law 
enforcement on. You should call your bank. You should call your 
credit card company.
    Until we have access to the truth about those complaints, 
until we know how many victims of cyber crime there are and 
until we have a good way of gathering that evidence in a way 
that has meaning, not just I lost some money but answering 
particular questions, we aren't going to be able to do 
intelligence-based policing of the Internet.
    That's one of the places that we have also established a 
partnership that you may not have heard of. It's called 
Operation Swordphish.
    Randy Hillman's office and my lab at UAB have been working 
with the Department of Prosecutorial Services and the Alabama 
District Attorneys Association and the Department of Public 
Safety in Alabama to try to do something about this.
    We have developed a Web site and a PSA campaign to attract 
complaints from Alabama citizens who may have been victims of 
cyber crime and are unaware that they ought to be reporting 
these things to law enforcement.
    Our Web site will gather those complaints. Our students 
will help to triage that data and combine it with the evidence 
that we have in our databases so that we can make qualified 
referrals to law enforcement.
    We think that this is one of the important things we have 
to do to move forward, and we're looking forward to answering 
any other questions you may have about these efforts.
    [The prepared statement of Mr. Warner can be found on page 
50 of the appendix.]

 STATEMENT OF DOUGLAS ``CLAY'' HAMMAC, CRIMINAL INVESTIGATOR, 
     SHELBY COUNTY SHERIFF'S OFFICE, SHELBY COUNTY, ALABAMA

    Mr. Hammac. Chairman Bachus and distinguished members of 
this community, thank you for the opportunity to testify before 
you today regarding the growing need for continued training and 
resources to be made available to local and State law 
enforcement at the National Computer Forensics Institute.
    It has become unfortunately far too common for law 
enforcement to encounter evidence of electronic crimes such as 
fraud, embezzlement, and even espionage.
    Without specialized training and resources, these cases 
would certainly be impossible for local and State agencies to 
investigate and prosecute due to the anonymity of the Internet.
    Without question, electronic and financial crimes are the 
fastest growing crime trends in the United States and 
throughout the globe.
    With each passing year, identity theft of individuals and 
organizations behind it become more complex and capable of 
rapid adaptation due to changing circumstances.
    The foundation of identity-related crime is the compromise 
of secured data held by private institutions, which typically 
is achieved by means of electronic intrusions. And it's common 
knowledge within the law enforcement community that on any 
given day, there are thousands, if not tens of thousands of 
individuals throughout the world hacking various point-of-sale 
systems here within the United States as well as compromising 
networks that hold valuable consumer information that will 
inevitably be used by or sold to other criminal elements.
    The growth of these crimes trends has unfortunately far 
outpaced the growth of resources available to combat this 
activity. Fortunately, the NCFI provides local and State law 
enforcement agencies with the ability to confront these crimes 
as they affect individual citizens of our communities and 
throughout the country.
    Electronic crimes are becoming more popular due to the fact 
that the criminals have discovered that in many small towns 
across our country, local law enforcement simply does not have 
the resources or the capability to investigate such crimes.
    As a result, the criminals exploit the lack of resources, 
and complex electronic and financial crimes are often unsolved.
    These crimes are difficult to solve due to the fact that 
electronic crimes are often faceless crimes. The traditional 
means of investigative work such as neighborhood canvassing, 
witness interviews, and processing physical evidence are all 
too often unnecessary and ineffective with these type of 
crimes.
    With the assistance of the NCFI, law enforcement men and 
women across this country have received specialized training in 
complicated fields of data analysis and computer forensics.
    They have taken this training back to their respective 
agencies throughout the country, and they are now fighting on 
the front lines in this war against electronic crime.
    Shelby County Sheriff Chris Curry is one of the many law 
enforcement leaders in this country who has recognized the 
change in crime trends within our communities and the United 
States.
    Sheriff Curry chose to utilize the NCFI to invest in his 
personnel and capitalize on this specialized training.
    Prior to attending the NCFI, I, like many of my colleagues, 
had a very basic understanding of computer skills. Three years 
later, I have completed more than 100 forensic examinations on 
computers and cell phones. Many of the examinations have been 
at the request of neighboring law enforcement agencies, as is 
the case for many graduates of NCFI, thus alleviating the case 
loads for State crime labs as well as the Secret Service.
    And though my training at the NCFI has assisted me in the 
investigation and resulting arrests of violent crimes such as 
the quintuple homicide I was requested to assist with less than 
24 hours after completing my training here, it has proven 
equally vital in the investigation of financial crimes that 
range from embezzlement to organized crime scenes.
    As a very brief example, I was recently contacted by an 
employee of a nationally recognized insurance company. The 
employee made a simple complaint indicating that she believed 
her 401(k) account was electronically compromised.
    Utilizing the training that I received from the NCFI, I was 
able to trace electronic routing numbers, bank account numbers, 
and identifying IP addresses. Not only did I identify the 
offender that compromised the data entry of the retirement 
account, but also illustrated that he had done the same to 4 
other employees as well as embezzled nearly $100,000 from the 
insurance company.
    That offender has since been arrested and indicted by a 
grand jury in two separate jurisdictions. The potential loss in 
this case cannot be identified by dollars and cents. The money 
involved in this case makes up the retirement accounts that the 
victims have invested in and depend on for many years to come.
    Law enforcement is dedicated to not only responding to 
these reports of criminal activity but also preventing these 
criminal acts. And such a task would be more than challenging 
without the tools and resources made available to us through 
the NCFI.
    Chairman Bachus and distinguished members of this 
committee, this concludes my prepared statement. Thank you for 
this opportunity to testify on behalf of local law enforcement 
officers, and I'll be pleased to answer any questions that you 
have.
    [The prepared statement of Mr. Hammac can be found on page 
34 of the appendix.]
    Chairman Bachus. Congressman Rogers?
    Mr. Rogers. As you heard, Chairman Bachus and Congressman 
Fincher are with the Financial Services Committee, so they're 
going to be much more focused, I'm sure, on the financial crime 
than I am. I'm more focused on threats to our homeland than 
cyber security stuff.
    My concern is there, so I'm going to make that the focus of 
my questions.
    Mr. Smith, you talked about a number of people who received 
their training here, a relatively small number when you think 
about it. What is the number that you think should be annually 
having access to this training?
    Mr. Smith. As I said, we have trained a significant number 
of people. And quite frankly, the positive of that is--which I 
didn't elaborate on as much--that we used this as a force 
multiplier, because what we are able to accomplish here through 
training is literally putting a mini crime lab, if you will, in 
every one of the locations that those individuals represent.
    When they go back to the field, they are able to take the 
knowledge and expertise that they gain here and apply that not 
only in their department there locally, but as you heard Mr. 
Hammac say, from other departments regionally.
    And I think we have done a very good job in terms of 
spreading the wealth, if you will. There has been pretty equal 
representation from all of the States across the country.
    Having said that, we, as you saw in my prepared remarks, 
operate at about 25 percent here. We understand, like certainly 
members of the committee do, that budget issues are always a 
concern. But quite frankly, we could always do more, if that 
opportunity comes our way.
    It would be hard for me to put an exact number on that 
because again, it is such a benefit for us to approach this, as 
I have said, from a force multiplier standpoint.
    So in terms of actual numbers, I'm sure that's something 
that we could get for you after we delve a little further, if 
need be. I think that would be the best way to answer it. We 
could always use a little more, but certainly I think we're 
able to accomplish a lot with what we are able to have and to 
do.
    Mr. Rogers. Thank you. Mr. Hillman?
    Mr. Hillman. Congressman, right now we are running at this 
facility somewhere around 25 percent capacity. We could--we are 
putting, give or take, 400 people per year in this facility. 
The capacity is 1,600. And we have--
    Mr. Rogers. This is a big facility. Just because you have 
the capacity doesn't mean it's needed. That's what I'm after.
    Mr. Hillman. Yes, sir.
    Mr. Rogers. How many people would like to get in here but 
can't because you just don't have the funding to meet that need 
and it's really inhibiting your ability to pursue leads and 
crimes and threats that are out there that need pursuing? 
That's what I'm asking.
    Mr. Hillman. Congressman, we are running anywhere from 8 to 
10 to 12 applicants per spot right now trying to get in here.
    Mr. Rogers. How is that applicant selected and how are 
they--what's the criteria for their approval?
    Mr. Hillman. The Secret Service, that's the State and local 
law enforcement candidates through their local field offices. 
There are special agents in charge--in charge of gathering 
those names and then they select those candidates.
    The Alabama District Attorneys Association, that's the 
candidates for prosecutors and judges throughout the country. 
There's a lot of give and take on both sides. There are lots of 
people from different jurisdictions who need to come here that 
we might not know about that the Secret Service does and vice 
versa.
    Mr. Rogers. Mr. Smith, how many of these folks are backed 
up and can't get in here because of space?
    Mr. Smith. Again, as Mr. Hillman said, I would say on 
average with every class, we turn away about 60 percent of the 
candidates who apply.
    Mr. Rogers. What's the criteria of the ones that you do 
approve?
    Mr. Smith. Again, like Mr. Hillman said, it's almost a 
pyramid. The local agencies, sheriffs' offices, and police 
departments make it known to our special agents in charge that 
our--within our 45 field offices around the country that they 
have a candidate that they would like to put forward and are 
interested in having someone attend this training.
    From there, that special agent in charge will submit the 
names and the biographical information of those individuals, 
and then it is actually looked at again at our headquarters 
level to do the things that I mentioned a minute ago, to make 
sure that we're disbursed equally across the country, that 
those areas which have a very high incidence of this sort of 
crime are given some priority.
    So it's really a lot of things that go into the equation. 
We try to make sure at the end of the day that the back-and-
forth multiplier, a term that I use, that we're putting the 
right number of people in the right places based on the 
availability that we have and, again, trying to be equal 
across-the-board throughout the entire country.
    Mr. Rogers. As you heard Randy Hillman state in his opening 
statement, when Bin Laden was killed, we captured a lot of 
computer data that has been a real wealth of information for us 
in the fight on terror. That has been the case throughout the 
Middle East when we have killed leaders in the Al-Qaeda 
movement.
    What a lot of people may not understand is that we have a 
lot of those cells here, folks here who are collaborating. The 
best example, as most of you are aware of, is the young man 
from Mobile who graduated from high school and is over there 
fighting, the same thing, using the Internet.
    How much of the information sent to you is information that 
is relevant to the terrorist threat, or would that really go to 
the FBI more than to you?
    Mr. Smith. Probably more to the FBI. But I will say that 
again, as you probably know, there is a protective intelligence 
portion of the Secret Service. We're concerned about threats, 
particularly those involving our techniques and that sort of 
thing.
    So there is certainly, post 9/11, a lot more interaction, a 
lot more communication among the agencies, as there should be. 
And so quite often, we will get leads from either the 
intelligence community or other law enforcement agencies on the 
very things that you're talking about, certainly that involve 
the technique. We have a high interest in that.
    But for the most part, it would be either the intelligence 
agencies or probably the FBI in terms of counter-terrorists.
    Mr. Rogers. It seems like to me overseas is Secret Service. 
I knew the answer to that question. I'm glad you pointed to 
that aggressively.
    What I want to get to is: Do you work with the Justice 
Department and the FBI to provide the same computer forensic 
service to them as well? Do they have a separate agency that 
does what this one does?
    Mr. Smith. Again, post 9/11, there is a lot more sharing 
than there ever was before.
    Chairman Bachus. So FBI agents would apply to you to come 
here in an effort to train?
    Mr. Smith. We have not done that. This is primarily State 
and local law enforcement who train here.
    Mr. Fincher. Do you know where the FBI gets this kind of 
training?
    Mr. Smith. Within their own venue. I think they do have 
training, and I think they take it down into other things out 
there through the National Institute of Justice and so forth. 
I'm really not qualified to speak too far in depth on that, but 
I believe they do.
    Mr. Rogers. What about local law enforcement who has not 
been able to get in in this community--and this would be the 
attorneys office here, sheriff, whatever--that's not had the 
opportunity to get one of their personnel sent here for 
training? Do they have the opportunity to just send the 
hardware over here for analysis?
    I understand that the ideal is to have the investigators 
working the case go through it because they know pig trails 
they may want to go down. But in the absence of that, can they 
just send hardware over here to be analyzed with some ideas 
about what they're looking for and then you send a report back?
    Mr. Hillman. Yes, sir, they can. In the back of this 
facility is the Birmingham or the Alabama ECTFS, Electronics 
Training Task Force, who belong to the Secret Service that we 
are partners in.
    Those investigators back there have the ability and the 
training and the wherewithal to take in those cases from 
different agencies.
    The evidence room back there is full of cases that have 
been brought to us by other law enforcement agencies that don't 
have this kind of training or equipment, and we help them out.
    Mr. Rogers. And how much of a backlog--how many weeks and 
months of a backlog do you have in analyzing that hardware?
    Mr. Hillman. We're able to turn it around pretty quickly. 
Before we established these in our Alabama Computer Forensics 
labs that you gentlemen helped us start, the turnaround time on 
evidence that I know is going to the FBI was somewhere around 2 
years.
    With those labs, with the ECTFs, we are able to turn it 
around generally within a matter of days, if not a week or two 
at most. And we prioritize items when they come in. If we have 
a pretty hot case, a murder case, an abduction case, a really 
hot financial fraud case, we put that at the top of the stack, 
and we work those first and we can turn it around in a matter 
of hours or days.
    Mr. Rogers. Do you have experienced counsel at the Federal 
level? I know the Department has its own intelligence besides 
the security officials. Of course, the FBI does.
    Do you have a clearinghouse, if you get a tip or 
information from analyzing one of the computers that may relate 
to a terrorist threat, you share that with a larger group of 
intelligence officials?
    Mr. Smith. Yes, sir, we do. And that goes on the 
intelligence side of the house. We have a Director of the 
Secret Service who is responsible for protecting intelligence, 
and that goes to them. They interface and communicate quite 
literally daily with the other intelligence entities around the 
country.
    Mr. Rogers. The 9/11 Commission found that one of its 
biggest concerns is stove-piping, information sharing in 
Federal agencies. In your opinion, is that stove-piping problem 
gone?
    Mr. Smith. As I said a minute ago, there certainly is a lot 
more sharing of information than there was before and--
    Mr. Rogers. It's not a guess.
    Mr. Smith. I don't know everything that's going on. There's 
always that possibility. But I think from our perspective, 
certainly we share information. I think that the other Federal 
agencies, both within the Department as well as outside the 
Department, certainly the Justice Department and others, we 
have excellent relationships with.
    If I could add just a follow-up about our electronic 
process. As I mentioned, we have 31 task forces across the 
United States and 2 in foreign countries now. They as well take 
in computers that need to be imaged that may be the results of 
searches or other crimes and that sort of thing. Certainly, 
there is a priority put on the major crimes.
    But they are--we do work for most any agency that asks 
again whether it--it might be as financial crime or whether it 
involves pornography--or any other crime related to computers, 
which touches almost everything now.
    These task forces that are around the country do that. And 
they do respond to the local agencies and other Federal 
agencies which occasionally ask for help.
    So outside the perimeters here, I will be glad to have a 
briefing schedule for you and provide some more information 
about exactly the amount of work they do.
    Mr. Rogers. I appreciate that. I asked Mr. Warner this 
question before. I was waiting for what would hopefully be a 
second round of questions. I don't want to take up all your 
time.
    Mr. Warner, I want to talk about your priorities. And what 
is your greatest unmet need here in your view?
    Mr. Warner. I think the greatest unmet need is the ability 
to open cases. And what I mean by ``open'', most phishing 
cases, for instance--phishing is the--
    Mr. Rogers. Define ``phishing.''
    Mr. Warner. Phishing is when a counterfeit bank Web site is 
created by a hacker. They make a site that looks just like the 
real financial institution's Web site, and they usually break 
into someone's Web site and add that content onto their server.
    My lab has identified 180,000 counterfeit bank Web sites so 
far. We see 521 new counterfeit bank Web sites on a daily 
basis.
    One of my students was doing research for his master's 
thesis--interviewing the heads of security for very large 
banks, the top 10 banks, and asked as one of his questions, 
what percentage of those phishing cases do you believe are 
investigated by law enforcement? The highest number he got was 
perhaps 1 percent.
    These are not being treated like crimes. Someone performs a 
computer intrusion where they break into a Web server. They 
counterfeit a bank Web site. They send out spam illegally 
through Botnets pretending to be the bank, which they're not.
    They steal the personal financial information, and then 
they take the money out of the victims' accounts, and no one is 
investigating that as a crime, because they say the bank will 
give you your money back.
    So that's the biggest challenge for me. How do we turn that 
into a crime that someone is going to investigate?
    Mr. Rogers. Seeing that need, what do you need to meet that 
need in a more responsible fashion?
    Mr. Warner. We have the evidence. We need law enforcement 
people who have time cleared out of their schedule to deal with 
that evidence.
    You spoke about the Homeland Security priority, and I 
firmly believe that's a very important priority. But for an 
example, we established a firm identity on a particular 
criminal whom we knew had stolen information from more than 1.4 
million Americans. The field office where that crime was being 
worked, the agent was told he was not to work on any cases that 
did not involve terrorism. They didn't have anyone free to work 
on something as low priority as 1.4 million people having their 
money stolen. Even though we already knew the criminal's 
identity, there just wasn't enough manpower to work on it.
    Mr. Rogers. Thank you, Mr. Warner.
    Chairman Bachus. Mr. Fincher?
    Mr. Fincher. Yes, sir. Thank you, Mr. Chairman.
    Back to Mr. Warner. Can you tell where most of these 
hackers, where they were? Where are they?
    Mr. Warner. Sure. Most of the sophisticated hacking that we 
see is coming from Eastern Europe. These are Russians, 
Estonians, Ukrainians. Primarily, Ukraine has the most talented 
computer programmers, the people who create computer viruses. 
Most of the low-tech crime comes from Nigeria. The truth is, 
it's just a funnel of money going overseas and no one's 
stopping it.
    If someone steals $70 million, that's a Federal 
investigation, and there have been some fantastic arrests just 
recently on those type of cases. But who's going to help you 
when somebody steals $600 from your wife? No one.
    Mr. Fincher. What type of oversight or regulation do you 
think is needed to tighten this gap? It kills me as a 
Republican to talk about the government always skimping when 
more regulation is needed.
    Mr. Warner. One of the things is that the criminals are 
very aware of our current policies. For instance, one of the 
best ways to identify someone stealing money out of bank 
accounts is to do what's called an ACH wire transfer, an 
automated clearinghouse financial transfer.
    The most common identifier that it's a criminal is if you 
suddenly have lots of transactions between $9,500 and $9,900. 
The criminals know if it's $10,000, it's a suspicious activity 
report.
    As long as they keep below the thresholds, they feel safe. 
We have to start, as I already mentioned, reporting every cyber 
crime as a crime.
    Mr. Fincher. Mr. Hillman, the cost of people coming here 
and time, how much time does it take to run through the 
process?
    Mr. Hillman. Actually, Congressman, I'm glad you asked that 
question.
    When we established this facility, it was our agreement 
with the Secret Service to work--my guys who work with me and I 
are fond of saying, ``The answer is money, what's the 
question?''
    When we started putting this thing together, the greatest 
need in law enforcement was for money and training. We knew 
that the law enforcement agents who would come here would not 
have the money to pay. And so, we decided to take care of that.
    When we vet a candidate and we select that candidate, 
whether it be State or local law enforcement, a prosecutor or a 
judge, we fly them in, we house them, we feed them, and we 
train them.
    In a couple of cases, the network intrusion course and the 
true forensic course, the 5-week course, we send them home with 
equivalent software that we just trained them to use.
    The only outlay of dollars that they have as an agency is 
to cover that officer's shift while he's gone.
    Mr. Fincher. What does it cost?
    Mr. Hillman. Right now, with the annual appropriation 
coming from NPPD and Homeland Security through the service and 
out to here, it is about $4 million. And for that, you're 
getting roughly 400 bodies, give or take, depending on what 
classes we schedule and how we do that.
    One other thing, Congressmen, if I may, that we haven't 
even touched on yet is the aspect of cell phone forensics. That 
is a completely different animal on how you extract that data.
    Most of the things that we're seeing now are moving toward 
cell phones, PDAs, the iPhones, those types of things. We have 
to get on top of that because we're seeing that tidal wave of 
digital evidence coming our way, and that requires a different 
set of skills to get to that evidence.
    That is one of the things that we have been working on with 
the Secret Service. We have changed our curriculum this year to 
add a cell phone class as well as a social networking class, 
which is another way the bad guys can get to you and get to 
your financial information and that sort of thing.
    So we will definitely need--to answer your question, we 
definitely need help in the area of cell phone forensics as 
well.
    Mr. Fincher. My last question is for the Shelby County 
sheriff's guy.
    Being from a rural county, so rural we don't even have a 
traffic light in my county--
    Chairman Bachus. No traffic lights.
    Mr. Fincher. No traffic lights in my county, Crockett 
County. We're pretty small.
    Chairman Bachus. You need to invest in infrastructure.
    Mr. Fincher. But we're not going to raise taxes.
    What can we do, because we have great law enforcement but 
it is sophisticated and it is passing us by?
    What can we do to be more productive and to get more of our 
guys into facilities like this?
    Mr. Hammac. Sir, I'm going to echo Mr. Hillman and Mr. 
Smith's statements. This training is absolutely necessary. The 
need though is, I would say, volume.
    Though we have had some well-qualified folks who have come 
through these doors and go back to their agencies not only 
working for their agencies but neighboring agencies, they 
quickly discover--the phrase around here is, ``If you build it, 
they will come.''
    Their computer labs are quickly overflowing with evidence 
and requests. Before we realize it, we're so backlogged that 
we're virtually ineffective in getting the evidence turned 
around in a timely manner.
    The answer is, we need additional resources. We need backup 
as the police say. We need some additional bodies who are there 
to help us and assist us in this fight on the front line.
    And that's beneficial in the sense that many of these cases 
we investigate carry us across multiple jurisdictions and 
across State lines. Having the confidence to say we will reach 
out to a neighboring law enforcement agency several States 
away, they're going to have the capability to assist us in this 
investigation at the part that we are in.
    Mr. Fincher. Okay. One more question, Mr. Chairman. This 
is--I guess, Mr. Smith, what types of financial institutions 
and their customers are most at risk for cyber attacks, larger 
banks with more assets or smaller banks? And how at risk are 
community banks for cyber attacks?
    Mr. Smith. One of the things that we have seen--and again, 
in my prepared remarks, we talk about the Verizon studies that 
the Secret Service participates in.
    The first few years of this, we saw the larger entities 
more often than not attacked, the larger banks. And a lot of 
times, they already--and certainly since a lot of these attacks 
have occurred, they have placed a lot of security measures 
within their systems to protect them.
    So of late, the trend has been more of what you're saying, 
smaller banks, smaller businesses and that sort of thing. And I 
think the criminal is a criminal is a criminal. They're going 
to always take the path of least resistance.
    So when you harden up one side of the house, they're going 
to go for the softer side. And a bank, because they have not 
been involved in hacks or breaches of the smaller businesses, 
if you will, for a period of time, now that the other side has 
hardened up, we're seeing more of that.
    Chairman Bachus. I want to thank--specifically, I want to 
compliment the Secret Service. There have been many cases where 
financial institutions' computers have been compromised and 
there's fraud going on over a matter of hours or days, and it 
is the Secret Service that calls and informs these banks that 
their systems have been compromised, and it's hard to put a 
dollar amount on how valuable that is.
    As I said, everything from ATMs to their entire credit card 
operation, so you have done an extremely good job. And I think 
what Mr. Warner mentioned is that you are up against some of 
the most sophisticated criminal organizations in the world.
    Some of these organizations have several hundred, is my 
understanding--several hundred members. And they are highly 
skilled, and you have had some real international successes.
    On occasion, I think these people travel from time to time. 
And I think that local law enforcement, their training here 
will assist in criminals being apprehended, and it gives you 
more eyes in the field.
    I can also say that the 900 or 1,000 people who train here 
is probably not an altogether accurate figure in that these 
people go back and train other people.
    We have had the head of the whole LAPD forensic task force 
who was in here probably 2 years ago. When he came here, he was 
swapping information and techniques that he had already learned 
with other departments and with the staff here. And I guess you 
would call it almost a cross-pollination. It was exchanging 
information.
    And, of course, his intention was to go back and train the 
LAPD. He was very impressed. This was a career officer who was 
very excited about--and he was actually a specialist already. 
And so that whole department--I'm sure we'll never know how 
many crimes they solved.
    So I think there's a $4 million a year investment by the 
Secret Service. And just a few of these cases being just 
financial fraud, and then we have cases like child pornography, 
rape cases, child predator cases where people are killed.
    It's hard to put a number on when you catch one of these 
people. I think we know and the legislators know and law 
enforcement knows that child predators repeat these crimes. 
They don't just kill one child. They don't just kidnap, rape, 
and murder one child. They're going to continue to do that 
until they're caught. They're going to continue to abuse 
children.
    And financial fraud, these people are going to continue to 
do it until they're caught.
    I had a case where a Congressman in Texas contacted me 
about a suspected child abuse involving sexual abuse. And we 
were able to get the name of someone who was within another 
county, an officer who had been trained here. And that person 
was able to assist them in that investigation.
    So I don't know how many times that has happened, but I 
would--if any of you wish to comment--I know you're dealing 
with these organizations in Eastern Europe, and there's only so 
much that you want to share your techniques or the extent of 
that. But there have been some incredible successes.
    They are, I guess, incredibly sophisticated--in fact, in 
many cases, these people are much more sophisticated than our 
guys. Their techniques and their operations are far more 
sophisticated than Al-Qaeda. And, several of them become 
multimillionaires. So they have the financial resources, too.
    But do any of you wish to comment further?
    Mr. Smith. I would add, Mr. Chairman, in regard to what was 
said about the fact that these criminals can be anywhere. 
Certainly, a lot of them are outside the United States. And as 
you heard, a lot of them are in Eastern Europe. So it's through 
the training that the State and local agencies get here and 
then a portion of us trying to share some of our expertise with 
them, not that we're total experts. But again, we're trying. We 
do recognize these things.
    In fact, just last month we officially opened a Secret 
Service office in Tallinn, Estonia, which is in the Baltic 
region, because again, so much of the computer crime and cases 
such as that originate in that area or that region.
    So we try to be as proactive as we can. And again, it goes 
back to that cross-pollination or force multiplier methodology.
    We try to take that beyond the borders of the United 
States. And that's why in all of the foreign offices that we 
have around the world, we use the same methodology that I 
described earlier for our investigative mission. We try to 
recruit--have good liaison, good cooperation with the local 
entities there, whether it is the local law enforcement or the 
State militia or whatever the law enforcement entity in that 
country might be.
    And as I said a moment ago about our Electronic Crimes Task 
Forces, we extended that as well. We recently just opened two 
ECTFs: one in London, England; and the other one in Rome, 
Italy.
    And quite frankly, the one in Rome, Italy, has a lot of 
interest in it, particularly from private sectors. The law 
enforcement entities are involved and interested, but also Post 
Paliano, which is the equivalent of the head of the postal 
service--is the chairman of the ECTF out there as far as 
quarterly meetings are concerned.
    So we try to gain as much expertise as we can outside of 
the United States, because again, as the professor mentioned, 
that's quite a problem there.
    Chairman Bachus. Okay. These are very risky operations 
because some of these people and some of these countries care 
nothing about retaliating. And then there is a hatred or an 
envy of the United States. So it's amazing how many of these 
people don't think there's anything dishonest about stealing 
money from American citizens. It's almost regarded as a noble 
profession.
    And it's very hard. Sometimes, the locals do not prosecute 
those crimes, although the Secret Service has had greater 
success in breaking those barriers. But I know you are 
basically overwhelmed.
    A hundred hard drives will fill the library of Congress. 
Probably somewhere in America, there are 100 hard drives in the 
last week that have been recovered.
    And one of the things about the training that the Secret 
Service gives local law enforcement officers and that also 
other local law enforcement officers here is that they learn 
how to, as I said earlier, extract this information. It can be 
on the computer. But if you don't have the expertise and if you 
don't have expensive software--we're talking about, what, 
$14,000 or $15,000 worth of software, sometimes the most 
advanced software. And the criminals are always one step ahead.
    It's just like with counterfeiting. They have become more 
and more sophisticated. Now, we have a new hundred-dollar bill 
coming out, which will stop them for awhile. But it's a 
daunting task.
    But I'm very grateful myself that the Secret Service has 
seen fit to partner with our local, State, and Federal 
agencies. It's a must. And I give you high marks because a lot 
of times Federal agencies, just like State and local agencies, 
focus on their jurisdiction. They are protective of that. And 
you have not shown any inclination to do that.
    These are resources that could be diverted and that are 
probably diverted from some of your own operations to this 
operation. So, we're very thankful.
    As I mentioned at the start, the testimony offered in the 
Casey Anthony case, that lady was very well trained and she was 
equal to the defense attorneys. She was probably one of the 
finest there was.
    Judges go back and train other judges. Judge Joiner knows 
this. If one has the training, that judge in a circuit will try 
all those cases. He may try all the cases involving complex 
forensic matters.
    He will teach his fellow jurists. He will go to courses and 
law enforcement training courses, and they will train other 
people.
    And some of these departments will see what the software is 
here and they'll buy it and such. And I'm sure a lot of that is 
going on.
    Mr. Rogers. Thank you, Mr. Chairman. I want to go back to 
the subject matter I was talking about with Mr. Smith here 
earlier.
    I would point out to the folks that these field hearings 
are congressional hearings just like we have in Washington. The 
primary purpose of a congressional hearing, whether it's in 
Washington, D.C., or here, is to weigh in on the information 
and that helps us develop policies. That's why you see this 
lady over here taking everything down.
    When I was talking with Mr. Smith earlier about the number 
of people going through it and what the need is, there's a 
reason for that.
    One of the problems that I found on the Committee of 
Homeland Security for years is it's hard--and the same thing is 
true for the defense of the Armed Services Committee which I 
serve. We try to get information out to people who know it so 
we can make a better policy.
    The problem is, Mr. Smith has a boss who works for the 
Secretary of Homeland Security who works for the President who 
has been given a number. And that's your budget, and you salute 
and say yes, sir, and make it work.
    I don't work for their boss. My job is to make a policy. So 
I'm trying to get Mr. Smith here what he needs.
    If Mr. Smith tells me what he really needs, it may cost 
more than $4 million a year, which means his boss is going to 
get mad at him because his boss is going to get in trouble with 
the Secretary.
    So having said that, I'm going to talk to Mr. Smith again.
    My preacher says if you want to know what somebody's 
priorities are, you look at their checkbook register and their 
calendar. Wherever they spend their time and money is what 
their priorities are.
    My priority is protecting the homeland. Cyber security is 
critically important. And that partnership between the Federal 
Government, State, and locals is absolutely essential.
    So I look at the numbers we're talking about--we're 
training about 8 people per State in this technology. That 
seems inadequate to me.
    And I understand we have budget constraints, but the 
Department of Homeland Security has nearly $50 billion a year 
to spend. And some of it is being wasted. That doesn't mean we 
can't shift it over here.
    So having said that, what's the number we need? Nobody is 
paying attention. You can tell me.
    Mr. Rogers. Be careful.
    Mr. Smith. Could I just refer to my earlier testimony? That 
way, I won't contradict myself.
    Mr. Rogers. You will be amazed how many generals I have 
come to me and state, I talked to you privately. That doesn't 
help me if it's not on the record.
    Really, there has to be some number that you think this 
entity could meet that is reasonable that would give you a 
better reach into the problem areas that we have. And if you 
don't want to tell me--Randy, maybe you will be able to tell 
me?
    Mr. Smith. I would like to defer to Mr. Hillman on that.
    Mr. Hillman. Congressman, I will tell you very quickly, $16 
million a year would put us at capacity and start to scratch 
the surface on the needs that we have in law enforcement.
    Mr. Rogers. So you think you have to be at capacity?
    Mr. Hillman. I think--no, sir. We're going to do with what 
we have, the best we can. But if we are at capacity, we--you 
talk about the force multiplier that Mr. Smith was talking 
about. It will get even larger and larger.
    Think about this, Congressman. We're losing probably $100 
billion a year if not more to financial fraud in this country 
every year. Think about when this committee considered--and I 
can't remember--I don't know what the protocol was, but they 
gave the TARP money and bailout to financial institutions. I 
don't know how many billion dollars that was, 600-plus billion 
dollars.
    If they're losing a hundred billion dollars a year in this 
country, you're feeding money in this arm and they're 
hemorrhaging out of this arm to fraud and phishing. It doesn't 
take long for that $600 billion to just wash out and go 
overseas or somewhere else.
    All we're asking for is a very small investment in law 
enforcement that will help prevent some of that stuff and will 
cover some of those dollars that are going to Estonia and 
Latvia and--
    Mr. Rogers. If you had $16 million, you said a little while 
ago that 40 percent of your applicants are being approved. Do 
you think that applicant pool will grow?
    Mr. Hillman. Absolutely.
    Mr. Rogers. How much of the--you have a $4 million a year 
budget.
    Mr. Hillman. Yes, sir.
    Mr. Rogers. I know that you prevent some crimes, have 
successful prosecution that recoups money.
    Do you get a pool of ceased assets which you're able to 
participate in the distribution of that to help sponsor this 
entity?
    Mr. Hillman. It depends on what type of crime you're 
working. Generally, when we get into the larger financial 
crimes--we join in with Ms. Vance's office, the U.S. Attorney's 
office. They have asset forfeiture divisions and they have 
asset forfeiture laws that help us draw in those assets, 
whatever we can put our hands on.
    Mr. Rogers. What percentage of your budget each year is 
pooled into assets?
    Mr. Hillman. None.
    Mr. Rogers. So you haven't been able to generate this so 
far?
    Mr. Hillman. Not that I know of.
    Mr. Rogers. How about you, Mr. Smith?
    Mr. Smith. We do receive funding from TEOAF, but again, 
that is for very specific new initiatives normally with a 2- or 
3-year life span startups.
    So our relationship, if you will, is very, very good with 
TEOAF and the funding that we receive for them which we put 
toward our investigative mission almost in total. And that goes 
toward major case funding and the purchase of equipment. That 
again is sort of a force multiplier. There's part of that money 
that eventually could help to buy equipment to solve a crime 
that somebody was trained here who ultimately uses that piece 
of equipment.
    I know that's a very convoluted answer, but that is sort of 
the way that we have to operate. TEOAF, as an entity, 
determines how much money we get each year, but of the amount 
they give us, we put almost 100 percent of it toward 
investigations.
    Mr. Rogers. The last question I'm going to ask, I know Mr. 
Smith says it's not for him. Mr. Warner, I know that there have 
been major players in the computer world who have suggested 
lately that to help prevent phishing and spam, there be an 
Internet charge for mass mailings like that per email. That 
sounds like a tax to me. But if it's only for mass 
distribution, do you feel like it's practical or there are 
problems with that?
    Mr. Warner. Yes, I can answer that. The problem, though, 
right now, Mr. Congressman, is that criminals don't use the 
Internet the way you and I use it. The criminal is not 
registering an account and paying his bills. He's sending out 
millions of emails and soliciting.
    The criminal is breaking into your home computer and 
sending the email through your home computer.
    Mr. Rogers. Then I'm against it. That's a tax on me.
    Mr. Warner. Right. The criminal's email sending--we have 
seen Botnets broken down by the FBI in the last year where one 
particular criminal could send 14 billion emails each day. He 
did that by having a network of over 3 million computers all 
around the world that were sending spam on his behalf.
    Mr. Rogers. Thank you very much, Mr. Chairman. That's all I 
have.
    Mr. Fincher. I just have a couple more points.
    Chairman Bachus. He wants a traffic light.
    Mr. Fincher. I'll leave it like it is, Mr. Chairman. It's 
very rural.
    So many times, we don't appreciate what we have until we 
don't have it anymore. And so many times, you guys aren't 
appreciated enough for what you're doing. That's why it's 
crucial that we focus at length today--Mr. Rogers focused on 
the financial side, and I want to stay with that, staying ahead 
of the criminals because it's becoming such a liability issue 
that if they hit us right and hit us hard enough, it will take 
us down big time.
    It's so important. Mr. Chairman, I go back to this. It 
seems like every conversation--and this is why we have been so 
focused, not to get political, to get our economy moving again 
and get people back to work and get revenue rolling again, 
because we can fund the things that are important.
    These things are very important. Should there be 
requirements, you think, like Tennessee? Should it be 
mandatory, or maybe at the State level, that at least one 
person for each county comes through here? Because there are so 
many things slipping through the cracks that they can't see 
until it's too late. And we actually can see it. It has cost us 
how many billions of dollars? But if the money was there and we 
could do what we need to do here, you guys could do what you 
need to do, should that be something that is looked at, or is 
it one per State and then the States can take it or one per 
district? What do you think, just your opinion?
    Mr. Hillman. Congressmen, when we look at those 
candidates--and I'll let Mr. Smith respond as well--you have to 
look at the pockets of crime and where the hot spots are. 
You're going to have more in Los Angeles than you will in a 
rural county in Nevada.
    So we have to pay attention to that, and they do a very 
good job of looking at those areas and you kind of concentrate 
assets there.
    On the flip side of that, in South Alabama, one rural 
county, there might not be another investigator who knows how 
to do this for five or six counties. So you want somebody there 
so that you don't have to drive all the way to Birmingham to 
find an investigator who's capable of doing it.
    I don't know that you could put a requirement like that on 
it because it's moving all the time, and it depends on what 
type of crime. A whole bunch of variables go into that.
    You have to--you're talking about financial crimes. Think 
about it. Every dope dealer is going to send text messages. 
You're getting capital murder cases set up with emails now. So 
it just really depends.
    But the key thing is getting bodies out there who know what 
they're doing and can handle this evidence, because it's coming 
down on top of us very quickly, and we are way behind the eight 
ball in catching them.
    Mr. Fincher. Two more things, Mr. Smith: one, what is the 
greatest expenditure at the training center; and two, kind of 
go through the jurisdiction of how we deal--as Mr. Warner said 
a few minutes ago--with these guys all over the world and do we 
have problems with trying to beat that back?
    Mr. Smith. I think as far as the institution is concerned, 
the costs are fairly equally divided. Out of the $4 million, 
it's fairly equal between the travel costs, the per diem costs 
to the individuals while they're here as well as the equipment 
costs. If you look at that across-the-board, it is pretty 
equal.
    In terms of the jurisdictional issues that I spoke about a 
moment ago, in the Secret Service at least, we take that force 
multiplier approach. We use our foreign offices to liaison and 
try to always have good relationships with law enforcement 
there. And that works for us on two levels. First, on the 
protective mission, because so many of our protectees travel 
abroad constantly now. So we need that. And that is on one 
level how we interact quite a lot with the host countries or 
countries that our protectees may visit.
    But at the same time, those field offices in those foreign 
countries are assigned to the Office of Investigations, so they 
come under our office. And to the other side of the mission 
with the investigations, we use that same formula to try to 
incorporate the work that we are doing with the host country. 
Sometimes, we're able to actually lend some expertise to them 
because this is a new arena for law enforcement agencies in 
those countries as well. And so we try as best we can to brief 
them or give them some adequate training.
    And as someone said earlier, some of the countries are 
easier to deal with than others. We have had great success in a 
good number of them. Particularly in some of the eastern 
countries, we have been successful not only in making arrests, 
but actually being able to extradite a few people along the 
way.
    Mr. Fincher. Thank you guys for your service.
    Chairman Bachus. Let me close by saying that the Secret 
Service investigates financial, cyber crime, and 
counterfeiting. Admission to this institute is somewhat 
restrictive, and there is a lot of demand for this center or 
institute. The feedback has been very complimentary. They come 
here and learn how to investigate other types of crimes, which 
are not under the charge of the Secret Service.
    So the $4 million that you're spending is a small 
investment--I'll say if they break into my bank account, that's 
one thing. If they harm my grandchild, that's quite another.
    So the Secret Service is rendering a valuable service 
outside their primary charge. And I'm very appreciative of 
that.
    We also have had briefings on financial service. I think 
you were there. Some of what you're up against is pretty 
overwhelming. And that's also a demanding area.
    I think maybe some others need to step up and find other 
funding sources to help fund this.
    The Secret Service is the primary agency and will have 
jurisdiction over it, but there may be other ways to help fund 
it. Do you know what I mean? I'm open to any suggestions.
    I do want to let the record show that I have been very nice 
to the Secret Service. Without objection, the hearing--
    Is there anyone who wants to make a final comment? This, I 
think, has been a very good hearing. And the testimony--without 
objection, the hearing will remain open for thirty--
    Judge Cole. Mr. Chairman, I apologize for interrupting. My 
name is Karen Cole. I'm a trial judge from Florida, and we have 
our entire class of trial judges here today. And I just wanted 
to let you know that we are grateful for what you are doing and 
we are particularly grateful for the Institute for what we are 
learning here today. There is nothing like this institute 
available in our jurisdictions, and we need to be able to 
understand the testimony when it is presented to us by law 
enforcement, and that's what we're learning here today. Thank 
you so much for the work you do.
    Chairman Bachus. Great. There are 26 judges in your class?
    Judge Cole. Yes.
    Chairman Bachus. Would you--I think time will allow. I 
would like for you each to stand up and give your name and your 
jurisdiction, if that's okay, your State or your city.
    Judge Cole. Jacksonville, Florida, Circuit Judge Karen 
Cole.
    Judge Leiber. I'm Dennis Leiber from the Circuit Court of 
Kent County, Grand Rapids, Michigan.
    Judge Higgins. I'm Cheryl Higgins, Circuit Judge for 
Albemarle County, Virginia.
    Judge Staab. I'm Tracy Staab, Spokane Municipal Court in 
Washington.
    Judge McGinnis. Mark McGinnis. I'm a trial judge in 
Appleton, Wisconsin, and part of the faculty here.
    Chairman Bachus. Thank you.
    Judge Landenburg. My name is David Landenburg. I'm 
representing the domestic violence coordinating issue with 
regard to cyber crimes that pop up every day, and I'm from 
Tacoma, Washington.
    Judge Deason. Donald Deason. I'm a trial judge, District 
Court Judge from Oklahoma County, State of Oklahoma.
    Judge Giacomo. I'm William Giacomo. I'm a Justice of the 
United States Supreme Court, Westchester County, New York.
    Judge Hoort. I'm David Hoort. I'm a circuit judge from 
Ionia County, Michigan, and I think we have about seven traffic 
lights.
    Judge Cunningham. James Cunningham, Jr., from Anoka County, 
Minnesota, right outside Minneapolis.
    Chairman Bachus. Okay.
    Judge Jarrett. Lisa Jarrett. I'm a District Court Judge, 
Trial Division, in San Antonio, Texas.
    Judge Morris. I'm Judge Denise Langford Morris from the 
Oakland Circuit Court in Pontiac, Michigan. But more 
importantly, I'm a former Assistant United States Attorney. And 
I can't tell you how much we feel comfortable and satisfied 
with what we are receiving this week and more so impressed with 
the staff here.
    The staff is impeccable from the moment that we were 
accepted. Thank you.
    Judge Kennedy. John Kennedy, Superior Court of New Jersey, 
Newark.
    Judge Berger. Wendy Berger. I'm a Circuit Court Judge in 
St. Johns County in St. Augustine, Florida.
    Judge Krueger. Kurt Krueger, a Trial Court Judge in 
District Court, Butte, Montana.
    Judge Evans. My name is Michael Evans. I'm a Superior Court 
Judge in Kelso, Washington.
    Judge Newman. Clifton Newman. I'm a Circuit Court Judge 
from Columbia, South Carolina.
    Judge Moore. I'm Daniel Moore. I'm a Circuit Court Judge 
and Major Felony Court Judge in Clark County, Indiana, near 
Louisville, Kentucky.
    Judge Miller. I'm Rich Miller. I'm a District Judge from 
Madill, Oklahoma. I was told by a lot of the OU football fans 
that they were treated more graciously than they had ever been 
treated when they played Alabama in 2003. I have to agree. It's 
so nice and has been such a wonderful experience to be able to 
come here today.
    Judge VerSteeg. I'm Pat VerSteeg. I'm an Associate District 
Court Judge from western Oklahoma. In my home county, we have 
no traffic lights either.
    Judge Brnovich. Susan Brnovich, Superior Court in Maricopa 
County, Arizona.
    Judge Snyder. Irvin Snyder. I'm a New Jersey State Superior 
Court Judge. I serve in Camden County, which is just outside of 
Philadelphia. And we have a traffic light on every corner.
    Judge Crawford. I'm Charlie Crawford, Circuit Court Judge 
for Viera, Florida. I'm proud to come home. I'm a graduate of 
Cumberland School of Law.
    Judge Meyer. I'm Sam Meyer. I'm a District Court Judge of 
Thurston County, which is in Olympia, Washington.
    Chairman Bachus. That was very inspiring. And Mr. Smith and 
Mr. Hillman, I think that was very--they were very 
complimentary of the center. And I would ask the judges, who 
are always very influential people in their towns and cities, 
to talk to their local Members of Congress and tell them about 
the value that you received here.
    And we appreciate the job you have done. We appreciate your 
sacrifice for coming here and staying and applying yourself to 
what is a complex set of issues, and it's a complex field of 
the law. And you obviously--it speaks well of you that you are 
participating and would more better serve your constituents. So 
I think it's a compliment to you. And we are just overjoyed to 
have you.
    Now, Tony, that has to make you feel good as Mayor of 
Hoover.
    Mayor Petelos. Absolutely, Mr. Chairman.
    Chairman Bachus. With that, I want to recognize Wayne--is 
it Pacine--who is the interagency project manager for the Board 
of Governors of the Federal Reserve System.
    Thank you for being here. And Greg Garcia, who is the FSSCC 
chairman of the cyber committee. Is he here?
    Okay. All right. Thank you very much, and this hearing is 
adjourned.
    [Whereupon, the hearing was adjourned.]




                            A P P E N D I X



                             June 29, 2011






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