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from Newsday (New York, NY) on Thursday, February 06, 2003

The trial of a Kazakhstan man charged with hacking into Bloomberg L.P. computers opened yesterday with prosecutors painting Michael Bloomberg as a do-gooder who stood up to an extortionist.

Meanwhile, the defense claimed their client was an "entrepreneur" who was merely seeking payment for trying to show Bloomberg the flaws in his computer-information system.

Assistant Manhattan U.S. Attorney Robert Strang charged that Oleg Zezev, 29, is a mercenary hacker who used a Bloomberg financial computer at his Kazakhstan securities office to break into the Bloomberg company's computer database in March 2000. Before he was elected in 2001, Bloomberg was chief executive of Bloomberg L.P., based in Manhattan. It has more than 143,000 subscribers who lease the firm's computers and software to gain access to its information network.

Strang said Zezev, using a Bloomberg computer, hacked into the system and illegally obtained personal data about Michael Bloomberg.

The prosecutor said Bloomberg reacted correctly when he went to the FBI after Zezev sent e-mails, calling himself "Alex," in which he demanded $200,000 to reveal the computer system's weaknesses.

"Mr. Bloomberg made two very important decisions," Strang said. "He decided he was not going to pay off an extortionist and not cave into any of his demands."

Strang told jurors that Bloomberg agreed to see Zezev and a second man, Igor Yarimaka, in August 2000 at a London hotel, where authorities surreptitiously videotaped the meeting. Zezev and Yarimaka were arrested by British authorities that day and extradited to the United States.

Defense lawyer Baum acknowledged that his client had sent e-mails requesting $200,000, he insisted they were an effort by Zezev to sell his computer acumen.

"He wanted Michael Bloomberg to know how easily he'd gained entry into the computers," Baum said. "There were no threats in his e-mails ... Oleg saw this as an opportunity to be an entrepreneur. And it's not a mistake to ask to be paid for your services."

Baum insisted that his client had been "set up" by someone in Kazakhstan who hacked into Zezev's e-mails to get the $200,000 Zezev was seeking from Bloomberg.

"This case is about a rush to judgment by a multibillionaire who could not accept that his computer system was fallible and had a bug in it," Baum said.

Testimony is slated to resume tomorrow morning. Yarimaka, 39, who also was indicted, will be tried at a later date.

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