Fugitive Hacker Leaves Trail of Strange Claims : Crime: ‘Agent Steal’ said he worked undercover for the FBI while awaiting sentencing for crimes that include rigging radio station contests. Case sheds light on shadowy computer world.

He called himself Agent Steal, computer hacker. He was a slender, good-looking rogue partial to Porsches and BMWs who bragged that he worked undercover for the FBI catching other hackers.

But today Agent Steal, whose real name is Justin Tanner Petersen, is on the run from the very agency he told friends was paying his rent and flying him to computer conferences to spy on the hacking community.

Petersen, 34, a Westside resident, disappeared in October after admitting to federal prosecutors that he had been committing further crimes during the time he claimed to be working with the government “in the investigation of other persons,” according to federal court records.

His story is a microcosmic slice of the close-knit and ruggedly competitive world of computer hacking, where friends struggle to outdo each other and then, when they’re caught, sometimes turn on each other.

Authorities say Petersen’s list of accomplishments, known as “hacks,” includes breaking into computers used by federal investigative agencies and tapping into a credit card information bureau.

Petersen, who once promoted after-hours rock shows in the San Fernando Valley, was involved in the hacker underground’s most sensational scam: hijacking phone lines at Los Angeles radio station KPWR-FM to win contests with prizes ranging from new cars to trips to Hawaii. The mastermind of that scheme was another hacker, Kevin Poulsen, a.k.a. Dark Dante. Poulsen is awaiting sentencing in connection with the case, having already spent three years in custody, the longest term in jail for any hacker in history.

Petersen has boasted that he trapped former colleagues. Last year he gave an interview to an on-line publication called Phrack in which he claimed to have tapped the phone of a prostitute working for alleged madam Heidi Fleiss. He also bragged of working with the FBI to bust another infamous hacker, Kevin Mitnick, a San Fernando Valley man who has been hiding for almost two years to avoid prosecution for allegedly hacking into computers illegally and posing as a law enforcement officer.

“When I went to work for the bureau I contacted Mitnick,” Petersen said in the Phrack interview. “He was still up to his old tricks, so we opened a case on him. . . . What a loser. Everyone thinks he is some great hacker. I outsmarted him and busted him.”

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Much of Petersen’s story may be bunk. He is, after all, a shadowy person who didn’t even use his own name during the years he spent on the fringes of the Los Angeles rock scene. Longhaired Eric Heinz, as Petersen called himself, shattered the computer nerd stereotype. He frequented the Rainbow Bar and Grill on Sunset Boulevard, often with different women on his arm, and handed out cards identifying himself as a concert promoter and electronic surveillance specialist.

The FBI refused to talk about Petersen directly. But J. Michael Gibbons, a bureau computer crime expert, said he doubted Petersen was working as a government informant to ensnare his hacker buddies for the bureau.

That kind of relationship is dangerous for the FBI, Gibbons said. “Across the board, hackers cannot be trusted to work--they play both sides against the middle.” The agents “could have had him in the office,” Gibbons said. “They probably debriefed him at length. (But) send him out to do things? I doubt it.”

However, attorney Richard Sherman of Santa Monica, who represents another hacker, has accused the FBI of actively using Petersen as an informant and turning a blind eye to Petersen’s alleged credit card fraud during the time he was in the bureau’s care.

In a May 19 letter to Atty. Gen. Janet Reno, Sherman said three agents in Los Angeles engaged “in a course of conduct which is illegal and contrary to Bureau policy” in handling Petersen.

Jo Ann Farrington, deputy chief of the Justice Department’s public integrity section, responded July 18 that there were no grounds to begin a criminal investigation. Assistant U.S. Atty. David Schindler in the Los Angeles office said, “It is factually incorrect that we allowed Mr. Petersen to commit crimes.”

Those who knew Petersen best described him as a bright, verging-on-arrogant man who dressed well and sometimes walked with a cane, a result of a motorcycle accident six years ago that cost him a foot. He sometimes promoted after-hours clubs in the Valley and in Hollywood, according to a partner, Phillip Lamond.

Lamond said Petersen once told him: “The difference between you and me is I get a thrill from breaking the law.”

In the Phrack interview, published on the Internet, an international network of computer networks with millions of users, Petersen as Agent Steal bragged about breaking into Pacific Bell headquarters with hacker Poulsen to obtain information about the phone company’s investigation of Petersen’s hacking.

Petersen said they found “a lot of information regarding other investigations and how they do wiretaps.”

“Very dangerous in the wrong hands,” said Phrack’s interviewer, according to a transcript.

“We are the wrong hands,” Petersen said.

Petersen was arrested in Texas in 1991, where he lived briefly. Court records show that authorities searching his apartment found computer equipment, Pacific Bell manuals and five modems.

An FBI affidavit expressed fear that Petersen could have been eavesdropping on law enforcement investigations. The affidavit said Petersen admitted “conducting illegal telephone taps” and breaking into Pacific Bell’s COSMOS computer program, which allows the user to check telephone numbers and determine the location of telephone lines and circuits.

A grand jury in Texas returned an eight-count indictment against him, accusing Petersen of assuming false names, accessing a computer without authorization, possessing stolen mail and fraudulently obtaining and using credit cards.

The case was transferred to California and sealed out of concern for Petersen’s safety. The motion to seal, obtained by attorney Sherman, states that Petersen, “acting in an undercover capacity, currently is cooperating with the United States in the investigation of other persons in California.”

Petersen eventually pleaded guilty to six counts, including rigging a radio station contest with a $20,000 prize. He faced a sentence of up to 40 years in jail and a $1.5-million fine, but the sentencing was continued several times. Sherman believes Petersen continued working for the government during that time. Petersen’s partner, Lamond, said Petersen told him the FBI was paying him $600 a month “to help them track down hackers.”

On Oct. 18, 1993, 15 months after entering his first guilty plea, Petersen was confronted outside federal court by government attorney Schindler, who asked if he had been committing any crimes while on bail. Petersen said he had, according to Schindler.

Petersen then met briefly with his attorney and took off. ‘I’ve got a big problem and I’m splitting,” he told a friend the same day.

Attempts to reach Petersen were unsuccessful and his attorney, Morton Boren, said he has “no knowledge of Justin committing any crimes.”

Sherman also criticizes the government for allegedly allowing Petersen, while serving as an informant, to utilize a Pacific Bell Telephone Co. computer called Switched Access Services, known as SAS. Sherman said the computer allows operators to intercept telephone calls and place other calls, making it appear the calls originated from other phones.

Rich Motta, executive director of applications, reliability and support for Pacific Bell, said he would not comment on Sherman’s allegations.

In the Phrack interview, Petersen made no apologies for his choices in life. Discussing Petersen’s alleged role as an informant, interviewer Mike Bowen suggested that “most hackers would have done the same as you.”

“Most hackers,” Petersen replied, “would have sold out their mother.”