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US Attorney (N. Dist. CA) Press Release

On Dropping of Charges Against Dmitry Sklyarov (Dec. 13, 2001)

FOR IMMEDIATE RELEASE

December 13, 2001

The United States Attorney's Office for the Northern District of California announced that Dmitry Sklyarov entered into an agreement this morning with the United States and admitted his conduct in a hearing before U.S. District Judge Whyte in San Jose Federal Court.

Under the agreement, Mr. Sklyarov agreed to cooperate with the United States in its ongoing prosecution of Mr. Sklyarov's former employer, Elcomsoft Co., Ltd. Mr. Skylarov will be required to appear at trial and testify truthfully, and he will be deposed in the matter. For its part, the United States agreed to defer prosecution of Mr. Sklyarov until the conclusion of the case against Elcomsoft or for one year, whichever is longer. Mr. Sklyarov will be permitted to return to Russia in the meantime, but will be subject to the Court's supervision, including regularly reporting by telephone to the Pretrial Services Department. Mr. Sklyarov will be prohibited from violating any laws during the year, including copyright laws. The United States agreed that, if Mr. Sklyarov successfully completes the obligations in the agreement, it will dismiss the charges pending against him at the end of the year or when the case against Elcomsoft is complete.

Mr. Sklyarov, 27, of Moscow, Russia, was indicted by a federal Grand Jury on August 28, 2001. He was charged with one count of conspiracy in violation of Title 18, United States Code, Section 371, and two counts of trafficking for gain in technology primarily designed to circumvent technology that protects a right of a copyright owner in violation of Title 17, United States Code, Section 1201(b)(1)(A), and two counts of trafficking for gain in technology marketed for use in circumventing technology that protects a right of a copyright owner in violation of Title 17, United States Code, Section 1201(b)(1)(A).

In entering into the agreement with the government, Mr. Sklyarov was required to acknowledge his conduct in the offense. In the agreement, Mr. Sklyarov made the following admissions, which he also confirmed in federal court today:

"Beginning on a date prior to June 20, 2001, and continuing through July 15, 2001, I was employed by the Russian software company, Elcomsoft Co. Ltd. (also known as Elcom Ltd.) (hereinafter "Elcomsoft") as a computer programmer and cryptanalyst.

"Prior to June 20, 2001, I was aware Adobe Systems, Inc. ("Adobe") was a software company in the United States. I was also aware Adobe was the creator of the Adobe Portable Document Format ("PDF"), a computer file format for the publication and distribution of electronic documents. Prior to June 20, 2001, I knew Adobe distributed a program titled the Adobe Acrobat eBook Reader that provided technology for the reading of documents in an electronic format on personal computers. Prior to June 20, 2001, I was aware that documents distributed in the Adobe Acrobat eBook Reader format are PDF files and that specifications of PDF allow for limiting of certain operations, such as opening, editing, printing, or annotating.

"Prior to June 20, 2001, as a part of my dissertation work and as part of my employment with Elcomsoft, I wrote a part of computer program titled the Advanced eBook Processor ("AEBPR"). I developed AEBPR as a practical application of my research for my dissertation and in order to demonstrate weaknesses in protection methods of PDF files. The only use of the AEBPR is to create an unprotected copy of an electronic document. Once a PDF file is decrypted with the AEBPR, a copy is no longer protected by encryption. This is all the AEBPR program does.

"Prior to June 20, 2001, I believed that ElcomSoft planned to post the AEBPR program on the Internet on the company's website www.elcomsoft.com. I believed that the company would charge a fee for a license for the full version of the AEBPR that would allow access to all capabilities of the program.

"After Adobe released a new version of the Adobe Acrobat eBook Reader that prevented the initial version of the AEBPR program from removing the limitations or restrictions on an e-book, I wrote software revisions for a new version of the AEBPR program. The new version again decrypted the e-document to which it was applied. The version of this new AEBPR program offered on the Elcomsoft website only decrypted a portion of an e-document to which it was applied, unless the user had already purchased a fully functional version of the earlier version and had both versions installed on the same machine. The new version was developed after June 29, 2001. At that time, Elcomsoft had already stopped selling the program. The version of this new program offered on the Elcomsoft website did not provide a user with an opportunity to purchase it or convert it to a fully functional one, and was developed as a matter of competition.

"On July 15, 2001, as part of my employment with Elcomsoft, I attended the DEF CON Nine conference in Las Vegas, Nevada. At the conference I made a presentation originally intended for the BlackHat conference that immediately preceded the DefCon Nine in July 2001 in Las Vegas, Nevada. The same group of people organizes both BlackHat and DefCon Nine. Since there was no available slot for a presentation at BlackHat at the time when the paper was sent for the committee consideration, the organizers of both conferences suggested that the paper be presented at the DefCon rather than at BlackHat. The paper that I read at DefCon is attached as Exhibit A. A principal part of my presentation is comprised of my research for the dissertation. In my presentation when I said "we", I meant Elcomsoft."

Mr. Sklyarov's employer, Elcomsoft, remains charged in the case, and the Court in that matter has set hearings for various motions on March 4, 2002, and April 1, 2002.

The prosecution of Elcomsoft is the result of an investigation by the Federal Bureau of Investigation. Scott Frewing and Joseph Sullivan of the Computer Hacking and Intellectual Property ("CHIP") Unit are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of legal technician Lauri Gomez.

A copy of this press release and key court documents filed in the case may also be found on the U.S. Attorney's Office's website at http://www.usdoj.gov/usao/can or http://www.usaondca.com [website no longer exists].

All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181 or Assistant U.S. Attorney Ross Nadel, Chief of the CHIP Unit, in San Jose.



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