Week in review: March of the penguins

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Clinton, D-N.Y., railed against the game for its content, despite the fact that the Hot Coffee scenes were not directly accessible without downloading the modification from the Internet.

Meanwhile, hackers are raising the ire of Sony. The company claims a group of hackers illegally created a huge amount of "Everquest II" currency last weekend and said the players caused the game's economy to suffer 20 percent inflation in just 24 hours before being caught.

The week in pictures

A company representative said the players began using their so-called "duping bug" to make large quantities of platinum, the game's currency. (A duping bug is a hack that exploits a weakness in online games' code to effectively create counterfeit currency or other goods.) The players then began trying to sell the ill-gotten plat on Station Exchange, the official auction exchange for EQ2 weapons, armor, currency and other virtual goods.

Criminals play and pay
Phishers have added a new lure to their tackle boxes: e-mails that ask people to fax sensitive information to bogus security investigators.

In a new scam, attackers are sending e-mail warnings that appear to come from PayPal. These e-mails say that someone tried to reset the recipient's password and asks him or her to participate in an investigation. The e-mails direct people to a Microsoft Word document hosted on a Web site and urges them to download the form, fill it out, and fax it to a toll-free number.

And who says Net crime doesn't pay? Software giant Microsoft is planning to invest some of the $7 million it is expecting from a damages settlement with "spam king" Scott Richter into fighting Internet crimes. After covering its legal expenses, Microsoft will dedicate $5 million to helping law enforcement agencies address computer-related crimes. The company also said it will give $1 million to community centers in New York for programs that help expand computer-related skills. The software giant, which had sued Richter in conjunction with New York Attorney General Eliot Spitzer, says it wants to "reward" the state.

Describing Richter as one of the world's most "prolific" spammers, Microsoft called the settlement a milestone and expressed hope the decision will send a clear warning to those dabbling in spamming.

Meanwhile, America Online is on the brink of giving away a fully loaded Hummer H2 and nearly $100,000 worth of gold bars and cash, all of which once belonged to an e-mail marketer. Both AOL members and nonmembers--all of whom will have a chance to win the goods--can thank the Can-Spam Act.

AOL obtained the goods as part of a settlement earlier this year in the first lawsuit it filed under the Can-Spam Act, in a case involving a then-20-year-old New Hampshire resident. The law not only arms Internet service providers with legal weapons against those who fire off unsolicited e-mail, it also allows courts to seize any property that a convicted spammer has obtained using money made through the offense. Any equipment, software, or technology used for illicit purposes is also fair game.

Tracking tech
The Department of Homeland Security is testing immigration documents laced with radio frequency identification chips at five spots on the Mexican and Canadian borders. The goal of the technology is to speed up--if not automate--secure entry and exit of visitors at the nation's ports, according to the Department of U.S. Homeland Security.

The chips are embedded in Customs and Border Protection Form I-94A, which the government issues at all ports of entry to chart the departure and arrival of certain foreign visitors--typically those with nonimmigrant visas, such as students or guest workers. At the test sites, chip readers note the entry or exit of visitors who pass by and transmit that information to a government-maintained database.

The federal government is also financing the development of a prototype surveillance tool by George Mason University researchers who have discovered a novel way to trace Net phone conversations. Their project is designed to let police identify whether suspects under surveillance have been communicating using VoIP, or voice over Internet Protocol--information that is unavailable today if people choose to communicate surreptitiously.

The National Science Foundation grant comes as federal officials are fretting about criminals using VoIP to mask their communications. The Federal Communications Commission has approved mandatory wiretapping requirements for some VoIP providers, and the FBI has been warning for more than two years that VoIP may become a "haven for criminals, terrorists and spies."

Gateway is beefing up security by plugging devices into its machines, including a LoJack-style technology to help customers track down lost or stolen laptops. The Mobile Theft Protection product, which uses technology from Absolute Software's Computrace, promises to locate computers that have gone astray. It also includes a so-called Data Delete feature that removes sensitive personal or corporate data by remote control.

Once the device is activated, Absolute Software guarantees the recovery of the computer. If the laptop is not recovered within 60 days, the customer may be eligible for a refund of up to $1,000. The device is preinstalled in the laptops, but customers will need to add $99 to the price of the computer to activate the coverage for three years.

Also of note
A major identity theft ring has been discovered that affected up to 50 banks, according to the security company that says it uncovered the operation...Microsoft said it found a potentially important document in its case against its former executive, Kai-Fu Lee, and Google in the "recycle bin" of one of Lee's computers...Apple Computer has announced it will refund the "piracy tax" the Canadian government has put on every iPod sold in the country.