iPhone Trade Secrets Matter Sheds Light on Investigative Resource

Interesting piece linked above in the Silicon Valley Mercury News regarding the REACT outfit in California:

The Rapid Enforcement Allied Computer Team operated out of publicity's glare until last month, when armed with a search warrant, its investigators broke into the Fremont home of a blogger-editor for the website Gizmodo.

Members of the Silicon Valley high-tech law enforcement task force were looking for evidence about a secret, next-generation iPhone prototype left in a Redwood City bar by an Apple engineer. Gizmodo, which paid a source $5,000 cash for the phone and blogged about it on its website, said the search violated its journalistic privilege.

Investigating the theft of trade secrets is one of the missions of the Silicon Valley task force, spelled out in state statutes, but media watchdogs were outraged that a journalist's home was searched in a probe launched on a complaint by Apple.

The Rapid Enforcement Allied Computer Team, or REACT, is one of five regional interagency task forces formed in 1997 by the Legislature in response to a growing number of high-tech thefts and other complex tech crimes such as hacking and identity theft. The other task forces are in San Diego, Los Angeles, Sacramento and Marin County.

The founding statute allocates roughly $12 million to $13 million a year to the task forces from the vehicle license tax. Some of that is spent on training in areas such as computer forensics.
The cases are often complex, require specialized training and many hours to investigate, said Ralph Sivilla, the state deputy attorney general who prosecutes many REACT cases.

Working in conjunction with the FBI, REACT helped crack a major LexisNexis hacking case in 2005. It has helped break up several identity theft rings. It assisted in nabbing someone burglarizing Yahoo's and other corporate campuses last year.

Recently, it tracked down a teenager in North Carolina who boasted on an Internet bulletin board: "Today at 11:30 EST I will attack my school with grenades and other forms of violence." That case — like the Gizmodo search — was handled by the San Mateo County Sheriff's Office REACT team.

"We deal with a lot of high-tech crime," said Mike Mattocks, REACT operations chief and a San Jose police sergeant. "We get lot of thefts still going on in industry, large thefts of high-tech components. We also have our normal day-to-day stuff — a lot of identity theft, where people's accounts are compromised."

The law provides for each task force to be directed by a local steering committee composed of representatives of participating agencies and members of the local high-tech industry. Critics have said this affords Apple — which is on the local steering committee — more law enforcement protection than the average citizen.

"I'm very concerned of REACT being a tool of large corporations, more than I realized before," said attorney Tom Nolan, who is representing Jason Chen, the Gizmodo editor-blogger whose home was searched.

"This group almost looks like they were behaving as if they were Apple's private police force," technology analyst Rob Enderle said.

The San Mateo District Attorney's Office, which issued the search warrant, insists that Apple got no special treatment.

"We're thinking of Apple no differently than we do when a Target or Nordstrom calls us up and says we have an employee embezzling $5,000 from us," said Steve Wagstaffe, San Mateo chief deputy district attorney.

"I know some people are saying, are they getting special treatment? They are just victims," Wagstaffe said. The only issues were, "Was there a crime? Who committed it, if there was one?"