Mike Pepper, a self-taught programming child prodigy, reverse engineered AOL’s instant messenger system, wrote a list-serve program that was a precursor to Napster, and earned boat loads of cash from the sale of software he developed himself – all by the age of 13. (Mike Pepper is an alias.)
By 16 he had parlayed his skills into a lucrative and luxurious lifestyle spamming for the porn industry, a gig he invented that earned him more money than both of his parents combined. Later he would lose his virginity to a porn star during a drug-addled jaunt to the AVN Awards in Las Vegas. His twisted ride through the dingy jungle of the porn industry had reached a fever pitch – at a rate of tens of thousands of spambot-infected computers a day – when the FBI’s identity theft squad showed up, mistaking his dad for their suspect. A life of salacious parties, Versace, gold chains and widespread mayhem soon gave way to a life of legitimate computer programming. Now he works for a company that helps businesses go paperless.
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I sat down with Mike to find out what it was like to be a hacker whiz kid in the porn industry – and what led him out.
MB: How did you get started with hacking?
Mike Pepper: Originally, when AOL was still a very large ISP, I got started by reverse engineering these programs that would essentially boot people offline, which I thought was really funny. And also, before there was Napster and any sort of file sharing, there were means to get stolen software and music. I wrote a file server to serve that kind of stuff up to people and modified a lot of stuff.
How old were you when you started doing that?
I was eleven or twelve. I learned how to do all these things in a community of people. We were all kind of learning together and so as that community evolved, and as people matured, naturally we got more and more into the darker side of things.
How did you go from reverse engineering these programs for fun to hacking in a way that was lucrative?
Well, there was this guy. His alias was “snort” and he wrote a pretty big hacker program for AOL, and essentially he started sending out these advertisements for porn websites. He would get large commissions based on whoever he could get to sign up and the file-sharing program I mentioned earlier basically worked off of email.
It would send an email out as attachments and people would request the email – say if they were looking for a song or some software. So really it was a modification from that to get inside of a chatroom, collect everyone that was in the room, and then send an email containing this advertisement, where I would get a commission. From there it got more and more complicated. Basically as the demand went up and speeds increased and I had a better working knowledge, things got more complex.
OK, so basically you went on from hacking to working for advertisers in the porn industry.
Right. Basically, those porn websites wouldn’t necessarily condone the techniques I was using. It was more like a “don’t ask, don’t tell policy,” but sometimes [the web masters] would do stuff like terminate your account one day before payday. They had an idea that what I was doing wasn’t quite right. But other people would continue to pay if you brought a lot of traffic in. So, the more advanced that I got and the faster I was able to push these advertisements out, the less likely it was that I was going to get terminated.
So, how old were you when you were doing this?
At the age of 13, I reverse engineered AOL’s instant messaging protocol and I was able to basically send out a few hundred of these advertisements a minute. That’s when demand and my name started building up in this little community. Towards the end I was able to do about ten thousand a minute. So I kind of held a monopoly, for AOL at least.
How much would you get paid for doing that?
It was commission based. So I would get money based on how many people I could get to sign up. But at the rates I was sending them out I would hit every single member of AOL every single day. So, that’s thirty-something million people. If I could get even one in—I’m doing real rough math—one in ten thousand people to look at the site and one in a hundred of those would sign up, that would still be two or three thousand dollars a day. Which was a lot for a 14 or 15-year-old.
How did you do this without your parents knowing? They didn’t know you were getting paid to do this, right?
Well, from what they knew I was just writing software. I kind of stayed in the grey area with them in terms of what I was actually doing. But there was a definite demand for the software I was writing and because I did a lot of the work independently, there weren’t that many people who could replicate the software I had written.
Some software I could sell for around 10 grand a copy. That was really the front for how I was getting the money. They were supportive of the fact that I was very good at computers but they still didn’t quite grasp exactly what it was all about, so it was pretty easy for me to masquerade the kind of evil things I was doing and cast them in a positive light.
Your client flew you to Las Vegas for the Adult Video News conference? How old were you, fifteen?
Yeah, 15. It was kind of like being a child movie actor. Because they were so appreciative of all the traffic I was sending them, they would send me gold necklaces and really gaudy gifts. I remember I had a gold necklace that had diamonds on it that spelled out “SPAM” and it was all very cash money millionare-ish.
One of the things that I wanted to do at the conference was meet these people I was sending all this traffic to and maybe work out some better deals with my commission. So, I went out there on this fake ID that was really sketchy. It had a hologram, a barcode, everything. And this was after 9/11, too. That’s a whole different story, how I got that.
But anyway, I was able to go to Vegas, get into the convention, which was 21 and up, gamble, party with porn stars, do all that stuff. And also, try to do business but really all that happened is that I got really drunk and lost my virginity.
To a porn star?
To a porn star, yeah. But for the record, well, never mind. I won’t really get too much into that. Anyway, I did actually meet a few people there that I ended up doing business with. I don’t want to bring down the porn industry as a whole, but if you’re working kind of in the black market side of the industry you don’t really meet too many people with worthwhile connections. It was pretty snaky.
So, you went to Vegas and met all these people. At some point you got into trouble for your hacking? When did that happen?
I want to say it was maybe a year after I went to Vegas. Since AOL was essentially the Internet service for dummies, [its users] were way more susceptible to falling for email spam. But they eventually started really cracking down on junk mail. I was sending it internally through all the spam filters. So what I did is I wrote a script that would essentially steal AOL email accounts and would use them to send junk mail and AOL would then terminate these accounts after a certain amount was sent. So I had to strike a balance of sending out advertisements and also obtaining new accounts. When I was cycling through and hitting most of their database daily, it would go through up to ten thousand accounts a day, basically just destroying and terminating those accounts.
After doing that for about six or seven months, I got in some trouble with the FBI. Essentially, I was smoking a lot of weed at the time; I had a bunch of computers that would send out these requests from all over the US, so it was really hard to track where the source was. But since I was smoking a lot of pot I would forget sometimes to turn that part on and it would all send from my home computer, which had a T1 connection.
That was a suspiciously huge amount of traffic coming out of a home address. That raised some red flags when I did that for about a week straight. But when the FBI came they weren’t actually able to prove it was me because there were so many other sources having the same problem.
So, the FBI came to your house and what? Took your computers?
Actually, a little worse. I’m a junior and my dad is the senior. The Internet was in his name of course because I was sixteen at the time. They picked up my dad at work and held him for questioning. He kind of knew a little bit more of what I was doing than I thought he did. He knew enough to cover the fact that I had three computers in the basement so he only reported his computer—which he knew I never wrote any code on and would have been completely clean.
They wanted him to drop his computer off with the secret service so they could run a forensics test. But after they checked out the profile on my dad, who was a white-collar businessman, he didn’t fit the profile of some cyber criminal. Since he was also willing to bring his computer in for testing, they just kind of dropped the questioning there. There were plenty of people, who were actually the innocent ones, who were very resistant to letting the government look at their personal computers.
They didn’t want the government checking out their porn.
Yeah, probably. The computers [I was using] were like viruses. I didn’t actually own all the other computers that were sending out spam. I bought them from some guy who wrote viruses and basically I could connect to these people’s computers and send the traffic out that way. Those people were resistant to bringing their computers in so actually, when they were questioning everybody, they were really [focused] on bringing those people in and not me.
What were some of the other reasons, other than the FBI, that led you to leave hacking behind?
Spam is one thing; it’s annoying. But the way I was doing it was very hackish. I wrote a program that automated the theft of email addresses, primarily AOL accounts. That’s actually what the FBI was looking into, identity theft. My best friend had an AOL account and one day his family’s Internet got shut off. When it was reactivated they wanted me to look into it. When I looked at it, I realized it had been shut off as a direct result of the program that I wrote. Their outbox was filled with messages that were sent by me. I was 100% responsible for it. I just had to come up with something else. I saw how it affected his family and I knew I was doing this on a scale of ten thousand people a day.
How much money did you make from your hacker days?
I don’t really want to comment on how much I made, but I mean I was making more than my parents were combined. I’m sure you can imagine all the responsible things I bought at the age of 14 or 15 with it.
What’s some of the funniest shit you bought with all that money?
Oh, God. I was such a douche bag. I literally wore designer clothes, like Versace and shit, to school. I already felt kind of alienated and I don’t know exactly how I thought buying these suits was going to help. I had a whole wardrobe of designer clothes. I bought multiple big screen TVs, I furnished my parents house with all this imported Italian furniture. All the stuff was really gaudy. Literally anything that I bought was just so excessive. Jewelry, watches, whatever. I don’t even know what happened to all that stuff. It’s kind of cool in retrospect because I see people who are super money hungry and I’m pretty minimal these days. I genuinely love computers and programming, but it’s a different kind of chase now.
Like I said before, it was a lot like being a child actor. A lot of that money went towards drugs, parties with my friends, etc. I was kind of like the bank for shady stuff at school. I would front dealers their money and stuff. Even though I was into computers I still felt like I had to prove something like I was cool or whatever. A lot of the money went to illicit drug use. I did a lot of harder drugs then, but I kind of broke away from that lifestyle.
At what point did you get into more legitimate tech work?
After that [FBI] scare, I had kind of wanted to stop for a while. I sort of had a divine intervention. I had been making a lot of money, but I was also getting screwed a lot and the people I was working with were people I would never want to associate with in the future. I sort of had that moment that I guess a lot of teenagers have when they sort of start to find their soul. I was becoming conscious of the fact of how many people I was harming and I didn’t want to keep doing that. I wanted to make a name for myself in a legitimate light. That pushed me to really take a step back and think about what I was doing. I actually got a legit job even though I didn’t really need one and then I built my way back up, writing legal software.
How do you feel most Americans regard hackers and computer security?
I think most Americans regard hackers themselves as malicious criminals. Really, I’d say most of them are just bored kids. Some of them with good intentions. Hackers often have a passion for computers which is something you cannot learn in school. You’re then pitting “trained” IT people against people who do these attacks for fun. The results of course swing in favor of hackers.
To answer both questions simultaneously, most people need to be trained like a puppy with computer security. You don’t know you’ve done something wrong until your nose has been shoved in shit. For example, usually website defacements leave the directory structures intact to let the admins fix the exploit and restore their site in it’s entirety. In theory, once a hacker exploits a system and makes his or her presence known, the exploit is patched, which renders the point of entry impotent. Using guerrilla tactics like defacement is a much easier way to get attention than writing a civilized e-mail that will most likely be ignored.
Are there any fellow hackers that you’re still in touch with?
Yeah, I actually have a few people that I still stay in touch with. Some of them are in jail, some of them are off the Internet and have disappeared, and some of them are still doing the same thing. But the people I generally associate with are people who are kind of in the same boat as me, who are doing something a little more positive. A good friend of mine, YTCracker, actually turned his experience into music. He writes nerd-core hip-hop and tours nationally with G4. I keep in contact with a few people. I keep in contact with a few people. I’m actually an administrator on a hacker board called “digital gangster” that’s responsible for a lot of recent hacks, but a lot of the people on there are just old friends. [Digital Gangster has been shuttered, at least temporarily.]
What do you do for work now?
I do a lot of contract work and I also work with a document management company where we basically push small businesses to go paperless. I write Mac software for that. I’m kind of all over the place really. I started so young that I know so many different languages. I just go where I fit in.
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