Sneaky Sneaky: FBI Created Company That Sold Encrypted Devices; Led to 800 Arrests in 16 Countries

By B.N. Frank

Encrypted devices are obviously a popular item among criminals, but also for average users who value privacy amid rising corporate and government surveillance. Nevertheless, 800 suspected criminals and counting got more than they bargained for with their purchases of supposedly encrypted devices.

From Ars Technica:

FBI sold phones to organized crime and read 27 million “encrypted” messages

Messages were routed to an FBI-owned server and decrypted with master key.

The Federal Bureau of Investigation created a company that sold encrypted devices to hundreds of organized crime syndicates, resulting in 800 arrests in 16 countries, law-enforcement authorities announced today. The FBI and agencies in other countries intercepted 27 million messages over 18 months before making the arrests in recent days, and more arrests are planned.

The FBI teamed up with Australian Federal Police to target drug trafficking and money laundering. They “strategically developed and covertly operated an encrypted device company, called ANOM, which grew to service more than 12,000 encrypted devices to over 300 criminal syndicates operating in more than 100 countries, including Italian organized crime, outlaw motorcycle gangs, and international drug trafficking organizations,” Europol said today.

Distribution of the devices began in October 2018. The cellphones sold by the FBI-run company were “procured on the black market” and “performed a single function hidden behind a calculator app: sending encrypted messages and photos,” The New York Times wrote today. The cellphones were “stripped of all normal functions,” with the faux calculator being the only working app. Once users entered a code, they could use the app to send messages that they thought were protected by end-to-end encryption.

“For years, organized crime figures around the globe relied on the devices to orchestrate international drug shipments, coordinate the trafficking of arms and explosives, and discuss contract killings, law enforcement officials said,” the Times wrote. “Users trusted the devices’ security so much that they often laid out their plans not in code, but in plain language.”

Unbeknownst to users, messages were routed to an FBI-owned server and decrypted with a master key controlled by the FBI.

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Between the FBI’s recent “interesting” announcement of reclaiming Bitcoin used in the Colonial Pipeline ransomware, and an ongoing narrative leading to the July 9th Cyber Polygon drills, the goal seems to be to connect anyone who seeks encryption as a potential criminal or terrorist, justifying an eventual ban on all legitimate end-to-end encryption.