Book examines how U.S. mobsters, Russian gangsters have rampaged across the Internet

'Fatal System Error' tells of tangled cybercrime web

Fatal System Error is a true-life tale of how U.S. mobsters and Russian gangsters have exploited the Internet and the Web over the past decade to rake in the money. Author Joseph Menn of the Financial Times shows how cybercrime, techies and law enforcement get tangled up from Florida to Costa Rica and from Russia's Moscow and St. Petersburg on out to Kazakhstan.

The first half of the book tells the story of Barrett Lyon, who as founder of Prolexic Technologies seven years ago applied his skills to protecting customers, a number being in the online gambling industry, against denial-of-service (DDoS) attack from extortionists who were bringing down their sites and demanding tens of thousands of dollars to go away. Lyon's technical expertise pinpointed the young Russian cybercriminal Ivan Maksakov, helping a multi-national team of investigators bring Maksakov and others involved in the DDoS extortion racket to justice in a Russian court three years ago.

But Lyon, portrayed in the book as a twenty-something CTO surrounded by high-rolling sponsors from gambling firms in their offshore havens as the U.S. passes laws against online gambling, can't escape the feeling some of his customers are involved in criminal activities themselves.

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Fatal System Error is a true-life tale of how U.S. mobsters and Russian gangsters have exploited the Internet and the Web over the past decade to rake in the money. Author Joseph Menn of the Financial Times shows how cybercrime, techies and law enforcement get tangled up from Florida to Costa Rica and from Russia's Moscow and St. Petersburg on out to Kazakhstan.

The first half of the book tells the story of Barrett Lyon, who as founder of Prolexic Technologies seven years ago applied his skills to protecting customers, a number being in the online gambling industry, against denial-of-service (DDoS) attack from extortionists who were bringing down their sites and demanding tens of thousands of dollars to go away. Lyon's technical expertise pinpointed the young Russian cybercriminal Ivan Maksakov, helping a multi-national team of investigators bring Maksakov and others involved in the DDoS extortion racket to justice in a Russian court three years ago.

But Lyon, portrayed in the book as a twenty-something CTO surrounded by high-rolling sponsors from gambling firms in their offshore havens as the U.S. passes laws against online gambling, can't escape the feeling some of his customers are involved in criminal activities themselves.

And after distancing himself from Prolexic a few years ago, Lyon, at the request of the Florida division of the FBI, agreed to wear a hidden microphone. He used it to converse with Prolexic's then-CEO Darren Rennick, who, according to Menn's book was "installed by the gambling men," infuriating Lyon as he watched Rennick continue to sell his Digital Gaming Solutions casino-style software right in the Prolexic office.

"I felt a moral obligation to expose this industry," says Lyon, now 31 years old. The Internet and the Web are a "new cultural phenomenon" that offers both the good and the "horrible. I don't think a lot of people understand the inner workings of the offshore gaming industry. "

Hollywood, Fla.-based Prolexic was acquired by Philippines firm IPVG in 2008. "We put this behind us ages ago," says COO Gus Cunningham. "This is dredging up ancient history."

Cunningham says he's only seen brief excerpts of Menn's book, which officially appears Tuesday, and attorneys for Prolexic will be carefully reading it with the expectation of making a statement regarding it. He says Rennick left the firm about two and a half years ago. Prolexic retains customers in the online gaining industry, as well as many other types of industries including financial services.

Since leaving Prolexic, Lyon went on to co-found BitGravity and now is launching another firm, San Mateo, Calif.-based 3Crowd Technologies, which next month will be coming out of stealth mode with technology for data transfer, including video, on the Internet.
Author Joseph Menn says Lyon, whose role in wearing a concealed microphone until now hadn't been made public, "took an enormous risk here. The books outs him as unknowingly working for the mob."

But as eye-popping as the book's portrayal of bookies and wise-guy swagger is, even while technical experts were said to be fending off network attacks for their servers, the second half of the book is even more mind-blowing.