Navy Systems Administrator Arrested on Hacking Charges

By Dow Jones Business News, 
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WASHINGTON--A Navy systems administrator assigned to the nuclear reactor department of an aircraft carrier was also the leader of an antigovernment hacking group, prosecutors alleged Monday.

Prosecutors say 27-year-old Nicholas Knight, an alleged hacker since age 16, led Team Digi7al, a group that broke into networks belonging to more than 30 governments, companies and individuals throughout 2012 and stole personal information about employees and customers.

The group, motivated by a mix of antigovernment politics, boredom and desire to prove itself to the hacking community, then posted some of the information online, according to the charging document filed in federal court in Tulsa, Okla., Monday.

Mr. Knight's arrest is a reminder of the dilemma the government faces as it seeks to recruit young adults with hacker- grade computer chops. Often times, they are indeed hackers. Some aren't yet ready to give up the darker side of technology or, in the case of Edward Snowden, the former National Security Agency contractor, they hold beliefs that may clash with the Pentagon.

Mr. Knight was discharged from the Navy after prosecutors allege he got caught trying to hack into a naval database while on board the USS Harry S. Truman.

Federal prosecutors in Oklahoma charged him and Daniel Krueger, an Illinois community college student who allegedly carried out some of the hacks, with one count each of conspiring to break into networks. Lawyers for both men didn't respond to requests for comment. They were charged in a type of document that usually signals a defendant intends to plead guilty, known as a criminal information.

A Navy spokesman didn't respond to a request for comment.

Team Digi7al targeted an odd mix of organizations with its hacks, from the arm of the Defense Department responsible for maps to the Toronto police, according to prosecutors. They caught the eye of investigators from the Naval Criminal Investigative Service with an attack against the Navy's system for arranging the logistics of service member relocations.

Mr. Krueger allegedly stole personal information from the system and later sent it to Mr. Knight, who posted some of it online and bragged about the hack on the group's Twitter account. The Navy had to shut down the system, mitigate the damage and pay for identity theft and credit monitoring services for affected employees. The tab was $514,000.

Mr. Knight, the former nuclear reactor systems administrator, allegedly referred to himself as "a nuclear black hat," according to the government document. Among hackers, so-called black hats tend to be malicious. He also said he "fought for the people of the United States, not the government," according to the charging document.

Danny Yadron contributed to this article

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