Solicitation of Tax Evasion--An Example

What could anonymous systems be used for? Besides allowing anonymity
in posting embarrassing or otherwise "questionable" messages, is there
any _commercial_ use? 

These are questions I hear a lot. Yes, there are commercial uses.

Here's a case that just came wafting across the Net: a woman who wants
to evade taxes--she states this explicitly--by bartering her labor for
some software. (I have no problem with this, being against taxes and
all, and knowing that various kinds of untaxable barter exchanges are
going on everywhere.)

Here's her post (no names have been changed, as she posted publicly):

Newsgroups: misc.forsale.computers.mac
From: vanous@mdd.comm.mot.com (Brendan K. Vanous)
Subject: BARTER: graphic design for s/w
Message-ID: <1993Aug14.040010.141@mdd.comm.mot.com>
Summary: would like to barter services for Mac software
Date: Sat, 14 Aug 1993 04:00:10 GMT


POSTING FROM MY HUSBAND'S ACCOUNT (mine's temporarily inaccessable):

Hi.  I'm a freelance forms/graphics designer who would like to expand her
software library in an inexpensive (& non-taxable :-) manner.  Therefore,
I would like to propose the following:

I will trade any of my design services (business forms, business cards,
illustrations, manual formatting, brochures, newsletters, any sort of
desktop publishing task that can be performed on a Mac ...) for an
equivalent amount of Mac software (got an extra copy of PageMaker 4.1
lying around that you don't need?)  All software must be original, with
documentation and letter of transferral.  NO PIRATED COPIES, PLEASE!

If interested, please reply to cyphrkt@eskimo.com and I'll reply to you
as soon as I possibly can (probably another 1 or 2 days before I get
my account back up and running), or contact me at (206) 778-3362 by voice.

Thanks!
		- Cindy Vanous

.................


Chances are no IRS types are watching the Net for such
solicitations--and the act of making such an offer is probably not
itself illegal. The IRS would have to investigate, call an audit,
prove taxes were evaded, etc. The existence of her solicitation might
or might not be considered.

But in an era in which every Usenet utterance is recorde in perpetuity
and is available on CD-ROMs for browsing and compilation of databases
and dossiers (you all *do* know this, don't you? Don't bother applying
for certain jobs if you posted too many times, or even once, to
"alt.sex.perversion.whatever").

Furthermore, anyone _reading_ this kind of post can, for example, call
an anonymous (semi-anonymous?) tip line run by the IRS. Last I heard,
tipsters can get 25% of any taxes collected as the result of their
good citizenship.

So, what can anonymity of the sort we discuss do here? After all, if
she's anonymous, how can a tranaction ever be consummated? (I'll leave
aside purely electronic transactions, which could in principle be done
fully anonymously, using a combination of "pools" (the "digital
democracy walls" I have cited before) and anonymous remailers.)

If Cindy were to use an anonymous remailer to post her offer, and then
offer a public key that could be used by anyone who wished to respond
to her offer, a response could then be posted in the same group.
Something like this:

"Alice" (really Cindy): "Want to trade consulting for a used
Macintosh. If you are interested, use this public key to respond:
3$1k8dRW4..."

Bob (really Jack) sees this, decides to offer a deal, encrypts it with
her public key (a one-time public key, used just for this deal), and
used anonymous remailers to post it in place she is sure to see it
(the same newsgroup, for example, or in one of Miron Cuperman's
"pools," or in "alt.w.a.s.t.e," etc.). Bob also includes a public key
she can use to communicate with him.

If they like the general deal, they can then agree (using only their
encrypted channel, readable only to themselves, even though they have
never met and have no idea who the other is or where they live) on the
next step. In a purely electronic transaction, this process can
continue digitally and fully securely.

If physical goods or money need to change hands, they can agree to
meet, to use phones, etc. The risk to Cindy is still there--Bob (Jack)
could of course be a government agent, etc.--but at least she is no
longer broadcasting her intentions for all Usenet readers, present and
future, to potentially see. And no future readers, such as government
computer programs set to scan all postings for evidence of such
illegalities, can retroactively detect and compromise her.

(If no actual physical contact is needed--such as for software sales
and consulting--then of course the contact can in principle remain
fully anonymous. Even the transfer of physical goods can be done with
moderately good security against tracing...smugglers, drug dealers,
and hijackers do it all the time. "Fences," they are called. And so
on.)

This is just one example of how "the little people" can benefit from
the schemes we are exploring. Understand that I have no illusions that
our friend Cindy will soon be using such methods...but maybe in 5
years.


-Tim May

--
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.


-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.

> Bob (really Jack) sees this, decides to offer a deal, encrypts it with
> her public key (a one-time public key, used just for this deal), and
> used anonymous remailers to post it in place she is sure to see it
> (the same newsgroup, for example, or in one of Miron Cuperman's
> "pools," or in "alt.w.a.s.t.e," etc.). Bob also includes a public key
> she can use to communicate with him.

The problem is, unless you're very careful about distributions and such,
you can easily clog the net with zillions of public-key-encryptions to
alt.security.pgp.messages <grin>.  But then again, I suppose it's not
any more traffic than alt.sex.pictures.erotica.* generates. :)

It would be trivial to write a script to be put in your .login to
automatically skim that newsgroup for anything encrypted with your public
key.  Hmmm...
-- 
Ed Carp, N7EKG			erc@apple.com			510/659-9560
                            anon-2133@twwells.com
If you want magic, let go of your armor.  Magic is so much stronger than
steel!        -- Richard Bach, "The Bridge Across Forever"

Ed Carp writes:

...

> The problem is, unless you're very careful about distributions and such,
> you can easily clog the net with zillions of public-key-encryptions to
> alt.security.pgp.messages <grin>.  But then again, I suppose it's not
> any more traffic than alt.sex.pictures.erotica.* generates. :)
> 
> It would be trivial to write a script to be put in your .login to
> automatically skim that newsgroup for anything encrypted with your public
> key.  Hmmm...

Yes, Ed is right. Easy to spot messages intended for you. And the
volumes involved in this "crypto classfieds" are not unreasonable.

Several comments:

1. As Ed points out, not such a large volume compared to the GIFs and
JPEGs (and now even MPEGs) being posted. A "classifed ad" is small for
what it carries (in terms of commercial information). That is, all the
ads we could write as individuals in a year would be less than a
single large JPEG image. And of course the ads could be packed in the
bits of such images, but I digress. And as Hal Finney notes,
steganography is not the main issue.

Ironically, though, these "crypto classifieds" represent a kind of
steganography, in that the authorities may _suspect_ the meaningless
bits are related to tax evasion, or solicitation of murders
(untraceable!), or sales of Stealth bomber plans, but they can't prove
this. The cyphertext could just as easily be love letters, encrypted
notes to lawyers (attorney-client privilege), psychiatric records (the
law now requires due diligence in keeping them secure, so encryption
is increasing here), or the "digital confessionals" of networked
churches! (These "legal covers" for crypto will be _very_ hard to
stop, even if the Administration wants to ban strong crypto. Telling a
priest or a lawyer that his communications with his client must be
wire-tappable will not go over well, and may be ipso facto thrown out.)

2. By analogy with publishing real classified ads in real newspapers,
imagine a "pool" site, reachable by ftp, that could contain gigabytes
of such encrypted "junk." (Incrimination of those who use such a site
can be eliminated by having it used for all kinds of things, and
encouraging everyone who retrieves something that's actually of
interest to them to randomly take a bunch of other stuff. This could
be cumbersome, I'll grant you.)

(Probably easier to just use UseNet, unless and until the volumes get
really large. When we last discussed this in a major way, probably
around last November or so, Miron Cuperman proposed "pools" that
people would subscribe to, automatically getting _all_ messages sent
to the pool. Incrimination is avoided, as above. However, using idle
UseNet groups ("alt.fan.chaum"?) will work just about as well, modulo
some concerns that who reads what newsgroups is theoretically
observable.)

3. Satellite distribution, as with all kinds of feeds. (These various
alternative distribution systems--satellite, pool, newsgroup, ftp
site--are all just variations on the idea that nobody knows who's
reading what ads in a newspaper-type system, a batched transmission
system.)

4. How does the target of a message know where to look? Must he scan
through all messages?

Obviously not, as many indexing schemes can be used which do not
compromise the security. For example, he may know that messages he can
read will start with "BARTER FOR SOFTWARE." The sender's security is
still maintained (remailers) and so is the recipient's (he takes many
messages, or downloads a large chunk of them to his local machine,
where he can extract the message meant for him).

(And the messages may also be apparently meaningless junk, readable
only to the intended recipient. So that he won't have to decrypt each
and every message to see which ones he can open--and he may have
multiple transactions in the pipeline, all with their own unique keys
to use!--there can be simple headers which are very quickly decrypted
Or the two communicants, once a channel is established, can agree to
put keywords in their messages, outside the cypertext. Again, this is
exactly what those communicating with newspaper ads do: they use
codes.)

Enough for now.

-Tim May



-- 
..........................................................................
Timothy C. May         | Crypto Anarchy: encryption, digital money,  
tcmay@netcom.com       | anonymous networks, digital pseudonyms, zero
408-688-5409           | knowledge, reputations, information markets, 
W.A.S.T.E.: Aptos, CA  | black markets, collapse of governments.
Higher Power: 2^756839 | Public Key: PGP and MailSafe available.
Note: I put time and money into writing this posting. I hope you enjoy it.

The example given (someone soliciting an act of questionable legality)
is a perfect application for the SASE remailer that I've been
developing.  I presented it at a phys-meeting a few months back, and
have been working on coding it sporadically since then.

The idea is that you have an address block that encodes the
information on how to get a message to you.  This is like a self
addressed envelope.  The envelope can specify multiple hops through
remailers, but is encrypted in layers so only the next hop is revealed
at each remailer.

The difficulty comes in allowing the message to be re-encrypted at
each stage (to keep a remailer from recognizing a message it has
passed through itself on an earlier hop), but still allow it to be
reconstructed at the final destination.

The protocol also allows postage stamps to be securely delivered to
each hop along the way, and yet be provided by the sender (who doesn't
know the identity, or public key, of the remailers).

You could use this by paying someone to forward messages to you via
your SASE address.  This way, you can publish an address by which
messages can be sent to you, but without leaving yourself easily
trackable. 

-eric messick

> > The problem is, unless you're very careful about distributions and such,
> > you can easily clog the net with zillions of public-key-encryptions to
> > alt.security.pgp.messages <grin>.  But then again, I suppose it's not
> > any more traffic than alt.sex.pictures.erotica.* generates. :)
> > 
> > It would be trivial to write a script to be put in your .login to
> > automatically skim that newsgroup for anything encrypted with your public
> > key.  Hmmm...
> 
> Yes, Ed is right. Easy to spot messages intended for you. And the
> volumes involved in this "crypto classfieds" are not unreasonable.
> 
> 4. How does the target of a message know where to look? Must he scan
> through all messages?

PGP will fail if signed with a key that it doesn't know about - that makes
it easy... So, one doesn't need to decrypt all the messages (or try to),
nor does one have to agree on a subject header or anything else.
-- 
Ed Carp, N7EKG			erc@apple.com			510/659-9560
                            anon-2133@twwells.com
If you want magic, let go of your armor.  Magic is so much stronger than
steel!        -- Richard Bach, "The Bridge Across Forever"

Tim May: 

> This is just one example of how "the little people" can benefit from 
> the schemes we are exploring. Understand that I have no illusions that 
> our friend Cindy will soon be using such methods...but maybe in 5  years.

Did you forward her a copy of your excellent ariticle?  That would
be a start.  More generally,  we can explain how Usenet can be
archived and used for these kinds of purposes, posting 
to newsgroups far & wide (esp. alt.drugs, *.activists, soc.motss,
support newsgroups, flame-prone political newsgroups, etc.) until 
net.users have been made aware of the consequences of their posting.

Alas, mere explanation and exhortation might indeed take five years.
Illustration could be far more effective.  Perhaps we should do some
dossier accumulation ourselves, blatantly.  Interesting replies 
could be sent via anon remailer to people who post on controversial 
political topics.   For example, a hit on '/black/ && /welfare queen/' 
might trigger the following:

----------------------
From: multicult@nowhere.com (Racism Tracking Project)
Organization: Multicultural Unity Activists
To: redneck_poster@deep.south.edu

Your recent post to soc.culture.usa, enclosed below, has been archived 
as part of an exciting new experiment to stamp out racism worldwide.  
Our first step is the Racism Tracking Project is to track
racist hate speech in order that society may never again be caught
unaware of those promoting hate.  Our database will be made 
available to selected scholars, journalists, and law enforcement 
officials upon request.

Your posting has been recorded as follows:

<carbon copy of redneck's post here>

Please let us know if this is in error.  Have a good day.
--------------------

A more sophisticated version would respond to intercepted private
e-mail in addition to grepping netnews.  Such "Tracking Projects" 
might, if net.users continue scrawling their private thoughts on
the public archives, accumulate detailed blacklists on homophobes, 
homosexuals, satan-worshipers, Aryan Nationalists, Communists, anarchists, 
Scientologists, atheists, pagans, promoters of illegal drug use and tax 
evasion, etc.  Preemptive, blatant Net.Blacklists may be the only way
to effectively raise awareness of the issue before the real blacklists
start up -- if they haven't already.

Nick Szabo				szabo@netcom.com