Firms Say Hacker Cost Them $291 Million

For a guy who never seemed to profit from his hacking habit, Kevin Mitnick sure took a big bite out of the high-tech economy, if newly disclosed damage estimates from his victim companies are to be believed.

Mitnick’s hacking cost high-tech companies at least $291.8 million over a two-year span before his capture, according to estimates provided to the FBI by NEC America Inc., Nokia Mobile Phones, Sun Microsystems Inc. and Novell Corp.

The damages are listed in previously undisclosed letters that were obtained by 2600 magazine, a pro-hacker publication that has posted the letters on its Web site.

The damage estimates vary widely. NEC said Mitnick stole software code worth $1.8 million. But Nokia figures Mitnick cost the company at least $135 million, including $120 million in lost revenue “due to new developments being delayed in reaching the market.”

Skeptics say the estimates border on fantasy and point out that the companies did not report these hefty setbacks in public financial statements. But the estimates underscore the ambiguities of assessing damages in hacking cases.

Some argue that hackers should be accountable for the cost of developing the software they steal, even though they are only taking a copy. Mitnick himself once argued that was akin to saying someone who shoplifts a 49-cent Bic pen ought to be accountable for the millions of dollars Bic has spent developing and marketing it.

The issue is still significant for Mitnick, who pleaded guilty to various hacking charges last month but awaits a ruling on the restitution he will be ordered to pay victims. “We’re going to make a submission for an amount of restitution we consider appropriate,” said Assistant U.S. Atty. Chris Painter, “not necessarily the full amount of the loss that was caused.”