14 December 2002. Transcript purchased for $45 from Exemplaris.com.

List of daily transcripts: http://cryptome.sabotage.org/usa-v-elcom-dt.htm


                                                                     1
 1               UNITED STATES DISTRICT COURT
 2             NORTHERN DISTRICT OF CALIFORNIA
 3                    SAN JOSE DIVISION
 4   
    UNITED STATES OF         )    CR-01-20138-RMW
 5   AMERICA,                 )
                             )    
 6             Plaintiff,     )                   
                             )    San Jose, California 
 7                  vs.       )    December 5, 2002  
                             )    McGEE TESTIMONY
 8   ELCOM LTD., et al.,      )                    
                             )
 9             Defendants.    )                         
    _ _ _ _ _ _ _ _ _ _ _ _ _)
10   
             PARTIAL TRANSCRIPT OF PROCEEDINGS
11           BEFORE THE HONORABLE RONALD M. WHYTE
                UNITED STATES DISTRICT JUDGE
12   
    A P P E A R A N C E S:
13   
    For the United States    United States Attorney's 
14   of America:              Office 
                             By:  SCOTT H. FREWING, 
15                            AUSA           
                             280 South First Street
16                            Room 371
                             San Jose, CA  95113
17   
    For the Defendants:      Duane Morris
18                            By:  JOSEPH M. BURTON, ESQ
                             GREGORY G. ISKANDER, ESQ
19                            Spear Tower    
                             One Market Street
20                            Suite 2000
                             San Francisco, CA  94105
21             
22   
23   
24   Court Reporter:          PETER TORREANO, CSR
                             License Number 7623
25   

                                                                     2
 1                    INDEX OF WITNESSES
 2   GOVERNMENT'S WITNESSES
 3   KEVIN McGEE
 4             Direct Examination by Frewing   P. 3
              Cross-Examination by Burton     P. 13
 5             
 6                    INDEX OF EXHIBITS
 7   GOVERNMENT'S EXHIBITS         MARKED    ADMITTED
         44                                 P.   12 
 8        45                                 P.   12 
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                                                                     3
 1   San Jose, California              December 5, 2002
 2                   PARTIAL PROCEEDINGS
 3             MR. FREWING:  Your Honor, the Government 
 4   calls Kevin McGee. 
 5             THE COURT:  All right. 
 6             THE CLERK:  Raise your right hand. 
 7                       KEVIN McGEE,
 8   being called as a witness on behalf of the
 9   United States, having been first duly sworn, was 
10   examined and testified as follows:
11             THE CLERK:  Thank you.  Have a seat, 
12   please. 
13             For the record if you can please state 
14   your full name and spell your last name, please.
15             THE WITNESS:  It's Kevin J. McGee.  
16   M-C-G-E-E.
17             THE CLERK:  Thank you. 
18                    DIRECT EXAMINATION
19   BY MR. FREWING: 
20   Q    Mr. McGee, with whom are you employed?
21   A    The FBI.
22   Q    And what's your position with the FBI?
23   A    I'm a special agent.
24   Q    How long have you been with the FBI?
25   A    Two and a half years.

                                                                     4
 1   Q    So you were employed with the FBI in the 
 2   summer of 2001?
 3   A    I went through the academy in -- the early 
 4   2000.
 5   Q    And in the summer of 2001 what -- did you have 
 6   a particular assignment at the FBI?
 7   A    Yes.  I was assigned to the high tech squad in 
 8   San Jose.
 9   Q    And what does the high tech squad do?
10   A    Investigates crimes that affect the technology 
11   industry, intellectual property, copyright 
12   infringement, high tech cargo theft, that sort 
13   of -- those sort of infractions.
14   Q    Were you involved with an investigation of a 
15   company called Elcomsoft?
16   A    Yes, I was.
17   Q    How did you get involved in that 
18   investigation?
19   A    I got involved when I started to assist 
20   Special Agent Dan O'Connell in the ongoing 
21   investigation.
22   Q    At some point did you have an opportunity to 
23   attend a conference in Las Vegas as part of that 
24   investigation?
25   A    Yes, I did.

                                                                     5
 1   Q    What conference was that?
 2   A    That was the DEFCON 9 conference.
 3   Q    And what is the DEFCON 9 conference?
 4   A    DEFCON 9 conference -- the DEFCON conference 
 5   is an annual conference held in Las Vegas primarily 
 6   for the hacking community.
 7   Q    Is it only for hackers?
 8   A    I imagine there's also security-type personnel 
 9   there.  People with an interest in computer 
10   security as well as the hackers.
11   Q    What type of venue was it held in?
12   A    It was held at a hotel and convention center.
13   Q    The -- pardon me just one moment. 
14   A    Sure.
15   Q    What type of events did you observe taking 
16   place at the DEFCON conference?
17   A    In various conference rooms had presentations 
18   being given.  There was also some flea market of 
19   sorts with T-shirts and different computer items 
20   for sale.  There also was a game, king of the hill 
21   type of game for hackers where the different 
22   attendees were attempting to gain control of the 
23   computer and it was a sort of competition taking 
24   place throughout the resort.
25   Q    And did you observe any evidence that at least 

                                                                     6
 1   some of the individuals at DEFCON were cognizant of 
 2   law enforcement's potential presence at the 
 3   conference?
 4   A    This was a game that they played throughout 
 5   the conference called spot the fed where -- it was 
 6   a lighthearted game where they attempted to 
 7   identify whether one attendee or another was an FBI 
 8   agent or a federal officer.  And I was present 
 9   while that was played on one occasion.
10   Q    Did they identify you as a federal officer?
11   A    No, they didn't.
12   Q    Now, did you observe any speeches given at the 
13   Elcomsoft conference?
14   A    I observed the Elcomsoft presentation.
15   Q    And generally what was the Elcomsoft 
16   presentation?
17   A    It was primarily a presentation about the 
18   Elcomsoft eBook Reader and eBook security in 
19   general.
20   Q    Who gave that presentation?
21   A    That was Mr. Dmitry Sklyarov.
22   Q    What language did he give it in?
23   A    English.
24   Q    Did Mr. Sklyarov indicate whether Elcomsoft 
25   was distributing the Advanced eBook Processor 

                                                                     7
 1   program?
 2   A    He was -- he indicated that they had 
 3   distributed it or were selling it, but they were 
 4   now giving out a demonstration version while at the 
 5   conference.
 6   Q    And what date was the conference?
 7   A    I believe it was July 15th, 2001.
 8   Q    Did Mr. Sklyarov indicate whether Elcomsoft 
 9   had been selling the program?
10   A    I believe he said they had priced it at $100.  
11   He may have stated that they were not selling it at 
12   that time.
13   Q    Did he indicate that they had been selling it?
14   A    I think he did.
15   Q    Did Mr. Sklyarov demonstrate the program?
16   A    He did.
17   Q    Did Mr. Sklyarov indicate whether the program 
18   would remove all protections from an electronic 
19   book?
20   A    He gave a demonstration in which he showed 
21   that that, in fact, happens with the program.
22   Q    Now, during this conference did you regard 
23   yourself as being undercover?
24   A    Yes.
25   Q    And did you wear a recorder or any kind of 

                                                                     8
 1   recording device?
 2   A    Yes, I wore a recording device.
 3   Q    Now, at any point during the conference either 
 4   before or after Mr. Sklyarov's speech did you have 
 5   an opportunity to speak with him in person?
 6   A    I did.
 7   Q    And how did that occur?
 8   A    He welcomed questions from the attendees at 
 9   the conclusion of his speech at which point I went 
10   up and engaged him in conversation.
11   Q    Were you the only person that approached him?
12   A    I was not.
13   Q    Now, did you overhear some of the questions 
14   that others asked him?
15   A    I did.
16   Q    And did you overhear his responses?
17   A    I did.
18   Q    Did anyone ask him about the ability of the 
19   Advanced eBook Processor to be used to obtain 
20   printed material that one was not suppose to have 
21   access to?
22   A    Yes.
23             MR. BURTON:  Your Honor, I guess I'm 
24   going to object on hearsay because I don't see the 
25   relevancy -- if it's not hearsay, I don't see the 

                                                                     9
 1   relevance.
 2             MR. FREWING:  I believe it's an admission 
 3   of a party which Mr. Sklyarov must be.
 4             THE COURT:  I agree.  I'll allow the 
 5   question.
 6   BY MR. FREWING:
 7   Q    So do you remember the question?
 8   A    Yes. 
 9   Q    Go ahead. 
10   A    The person standing on my left asked if you 
11   could print stuff you should not print to which he 
12   replied yes. 
13   Q    Did Mr. Sklyarov indicate whether one could 
14   obtain the full functional AEBPR program at the 
15   conference?
16   A    I questioned him in a manner to find out if it 
17   would be available to me.  He said that it was not 
18   available at the conference.  So I questioned him 
19   further on whether I could meet him somewhere and 
20   purchase it or if it would be available in the 
21   future and he led me to believe that he did hope to 
22   have it back up for sale within the week upon his 
23   return to the Soviet Union or Russia.
24   Q    Now, while were you in Las Vegas or at any 
25   point in this investigation did you have an 

                                                                    10
 1   opportunity to speak with an Andre Malyshev?
 2   A    Yes, I did.
 3   Q    And was that in your undercover capacity?
 4   A    No, it was not.
 5   Q    What capacity was it in?
 6   A    Just as an FBI agent.
 7   Q    And did you identify yourself as an FBI agent 
 8   to Mr. Malyshev?
 9   A    I did.
10   Q    Did Mr. Malyshev indicate whether he was 
11   employed at Elcomsoft?
12   A    He did.
13   Q    Did you ask him whether he had participated in 
14   the development of the Advanced eBook Processor?
15   A    I did.
16   Q    And how did he respond?
17   A    He told me that Mr. Sklyarov was the only 
18   person to have developed that program at Elcomsoft.
19   Q    Did Mr. Malyshev indicate why he was in Las 
20   Vegas?
21   A    He traveled to assist Mr. Sklyarov with the 
22   presentation at DEFCON.
23   Q    Did Mr. Malyshev indicate whether Elcomsoft 
24   had sold the program, the Advanced eBook Processor 
25   program?
                                                                    11
 1   A    He told me that they had sold it for $100, but 
 2   he also stated that it wasn't their intent to make 
 3   money off of it.
 4   Q    Did Mr. Malyshev explain how -- why they were 
 5   selling the program if they didn't intend to make 
 6   money?
 7   A    He didn't.
 8   Q    I'd like to show you what's been marked as 
 9   Government Exhibit 44.  I'll ask you to look at 
10   that and see if you recognize it. 
11             THE CLERK:  Is that 44?
12             MR. FREWING:  44.
13             THE WITNESS:  It's a copy of a tape of 
14   the presentation of Mr. Sklyarov that the FBI 
15   obtained through grand jury subpoena.
16   BY MR. FREWING: 
17   Q    And have you had an opportunity to review that 
18   tape?
19   A    I have.
20   Q    And does it accurately represent the 
21   presentation that you saw at the DEFCON conference?
22   A    It does.
23             MR. FREWING:  Your Honor, I'd like to 
24   move Exhibit 44 into evidence.
25             MR. BURTON:  No objection.

                                                                    12
 1             THE COURT:  44 is admitted. 
 2             (Whereupon, Government's Exhibit Number 
 3             44, previously marked for identification, 
 4             was admitted into evidence.)
 5   BY MR. FREWING: 
 6   Q    I'd also like to show you what's been marked 
 7   as Government Exhibit 45 and ask you to take a look 
 8   at that. 
 9             Do you recognize that?
10   A    Yes, I do.
11   Q    What is it?
12   A    It's a disk containing Elcomsoft demonstration 
13   softwares that I picked up immediately following 
14   Mr. Sklyarov's presentation that he offered to 
15   audience members.
16   Q    And is that that actual CD you obtained from 
17   Mr. Sklyarov?
18   A    Yes, it is.
19             MR. FREWING:  Your Honor, I'd like to 
20   move Government Exhibit 45 into evidence.
21             MR. BURTON:  No objection.
22             THE COURT:  45 is admitted. 
23             (Whereupon, Government's Exhibit Number 
24             45, previously marked for identification, 
25             was admitted into evidence.)

                                                                    13
 1             MR. FREWING:  I have no further 
 2   questions. 
 3             THE COURT:  Okay.  Mr. Burton? 
 4             MR. BURTON:  Thank you, Your Honor. 
 5                     CROSS-EXAMINATION
 6   BY MR. BURTON: 
 7   Q    Agent McGee, while you were in an undercover 
 8   capacity at DEFCON did you have occasion to make 
 9   any consensual monitor -- not consensual, but 
10   undercover monitoring of the conversations?
11   A    Yes.  I wore a recording device for 
12   Mr. Sklyarov's presentation and the conversation I 
13   had with him immediately following that.
14   Q    So the conversation that you described to the 
15   jury that you had with him after, you recorded 
16   that; is that correct?
17   A    That's correct.
18   Q    Okay.  And you still have that recording?
19   A    The FBI has that recording.
20   Q    The FBI has that recording?
21   A    Yes.
22   Q    All right.  When you -- you indicated that -- 
23   that there was a game.  You called it a 
24   lighthearted game of something, find the fed?
25   A    Spot the fed. 

                                                                    14
 1   Q    Spot the fed; is that correct?
 2   A    Yes.
 3   Q    Did that indicate to you that -- that persons 
 4   at DEFCON believe that federal agents might also be 
 5   there?
 6   A    Sure.  I think -- you know, it was done in a 
 7   lighthearted way.  It just gave me the impression 
 8   that they were aware that federal officers might be 
 9   present or that they should be concerned for some 
10   reason that federal officers might be present.
11   Q    Okay.  Have you ever been to a DEFCON 
12   conference other than this one?
13   A    No, I haven't.
14   Q    Have you been to any other security 
15   conferences -- strike the question.
16             Had you been to any other computer 
17   security conferences besides DEFCON?
18   A    No.  Just training.
19   Q    Okay.  Are you familiar with the conference 
20   called Black Hat?
21   A    I am familiar with it being a computer 
22   security conference, but not beyond that.
23   Q    Okay.  Do you know who the participants in 
24   Black Hat are?
25   A    I don't.

                                                                    15
 1   Q    Okay.  Do you know if the participants in 
 2   Black Hat are the same or different than the 
 3   participants in DEFCON?
 4   A    I don't know.
 5             MR. BURTON:  Okay.  That's all the 
 6   questions I have.
 7             THE COURT:  Okay.  Anything further? 
 8             MR. FREWING:  Nothing further, Your 
 9   Honor.
10             MR. BURTON:  Your Honor, I'm sorry.  
11   Subject to recall. 
12             THE COURT:  All right.  You're excused 
13   for now then.
14             THE WITNESS:  Thank you, Your Honor. 
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