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KINGPIN

Maksik’s accounts in the e-gold database and found that between February and May 2006, Maksik had transferred $410,750 out of his account to “Segvec,” a Mazafaka dumps vendor generally thought to be in Eastern Europe. An outward transfer implied Segvec wasn’t one of Maksik’s customers but a supplier getting his cut.

The feds got a chance at more direct information in June 2006, when Maksik was vacationing in Dubai. Secret Service agents from San Diego worked with local police to execute a “sneak-and-peek” in his room, where they secretly copied his hard drive for analysis. But it was a dead end. The sensitive material on the drive was all encrypted with a program called Pretty Good Privacy. It was good enough to stop the Secret Service in its tracks.

Carders like Maksik and Max were at the fore in embracing one of the unheralded gifts of the computer revolution: cryptography software so strong that, in theory, even the NSA couldn’t crack it.

In the 1990s the Justice Department and Louis Freeh’s FBI had tried hard to make such encryption illegal in the United States, fearing that it would be embraced by organized crime, pedophiles, terrorists, and hackers. It was a doomed effort. American mathematicians had decades before developed and published high-security encryption algorithms that rivaled the government’s own classified systems; the genie was out of the bottle. In 1991, a U.S. programmer and activist named Phil Zimmerman had released the free software Pretty Good Privacy, which was available on the Web.

But that didn’t stop law enforcement and intelligence officials from trying. In 1993, the Clinton administration began producing the so-called Clipper Chip, an NSA-developed encryption chip intended for use in computers and telephones and designed with a “key recovery” feature that would allow the government to crack the crypto on demand, with the proper legal authority. The chip was a dismal failure in the marketplace, and the project was dead by 1996.