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How 75 Cents Exposed a Russian Spy Operation | Thinker | YouTubeToText
YouTube Transcript: How 75 Cents Exposed a Russian Spy Operation
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Summary
Core Theme
This content details the rise of the first cyber spies, a group of German hackers who transitioned from playful system infiltration to engaging in espionage for the KGB during the Cold War, ultimately leading to a complex conspiracy involving international intelligence agencies and an unsolved murder.
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Summer 1982. Chelabinsk, Soviet Union. [Music]
>> This is the Chelubinsk natural gas
processing unit. And while the Soviet
emergency team scramble to get control
of the chaos, a satellite watches
silently from orbit. It belongs to the
American CIA who are responsible for the
explosion by planting a virus into the
Soviets pipeline software. The attack
marked the beginning of a new digital
front in the Cold War. But while both
the US and Soviets began the race for
cyber supremacy, a different type of
battle was happening in Western Germany.
There a group of young Germans were
fighting with their weed dealer. And
after getting what they actually paid for,
They fire up both their joints and their PCs.
PCs.
They're part of the first generation of
hackers and are currently having fun
infiltrating random systems and devices.
However, what they don't know is that
pretty soon they will also be involved
in the Cold War, specifically in a
massive international hacking
conspiracy. one that involves money,
drugs, spies, and a murder mystery that
remains unsolved to this date. This is
the story of the KGB hackers, the first
cyber spies in history.
This video is sponsored by NordPass, but
1985, Hanover, West Germany.
It's around 1000 p.m. when a group of
German computer enthusiasts come
together in a scene restaurant called
Spectacle and Sesame. The group is made
of a bunch of hackers, but the following
story mainly revolves around Carl Cau,
alias Hagbard, a 19-year-old pthead and
conspiracy theorist, Marcus Hess, alias
Umerell, a 25-year-old physics student,
and Hans Hinrich Hubner, aka Pangu, a
17-year-old from Berlin. The three are
big fans of the Chaos Computer Club, a
German hacker association that got
famous by exploiting a bank in an
incredible way. They managed to steal
130,000 German mark or about $100,000 US
adjusted for inflation by hacking into
an account of the Sparasa bank and using
it to load their BTX site, which was
basically a pre-in online service
operating via telephone lines. Either
way, Carl Kau is convinced that they can
also pull off a move like that. However,
right now, the rest of the group just
wanted to party. [Music]
[Music]
And at the end of a turbulent night full
of alcohol, the trio create their own
unofficial hacking group and with it
Mid 1985, Hanover, West Germany. Over
the next few days, the three begin to
hack everything they can get their hands
on. German universities, US military
facilities, and even the European
Organizer for Nuclear Research,
otherwise known as CERN. [Music]
[Music]
There was just one problem. They weren't
making any money. But this was about to change.
Mid 1985, Hanover, West Germany.
The three hackers are once again at
their group's headquarters. the now
so-called computer stampish table at
their favorite restaurant. However, this
time it's not to celebrate, but to add a
recruit to their team. The prospect is a
man called Dirk Otto Berzinski, aka Dob,
a 25-year-old computer specialist
motivated by the group's opposition to
government surveillance and, of course,
the adrenaline rush from hacking the
biggest institutions. But while West
Germany is going through a liberal cyber
rebellion against authoritarian ideas,
East Germany is the complete opposite.
It was the most extreme surveillance
state in the world at the time and
especially strict in East Berlin. Both
the East German secret police known as
the Stacey and the Soviet intelligence
services were constantly spying on their
own populations and suppressing any
ideas of personal freedom. It went so
far that for every seven East German
citizens, at least one of them was a
secret informant. However, both the
Stacey and the Soviet intelligence
agencies were not only surveilling their
own people, they were also closely
monitoring the West. And as interest in
the emerging hacker underground grew, so
did their concern.
A concern that culminated when a CIA
planted software program triggered a
massive explosion in a Siberian gas
pipeline, thus marking the start of a
new type of warfare in the digital
realm. This led Nikolai Tigonov, one of
the highest ranking Soviet statesmen, to
build up the KGB's capacity for
telecommunication related warfare. This
included the establishment of a digital
defense division within the KGB's 8th
directorate as well as the creation of a
specialized school for digital spies in
the first directorate. The students
there didn't just learn programming
skills. They were also trained in
espionage tactics and networking skills.
And right in the back of this class was
a young Russian man called Sergey. And
even though he didn't know it yet, he
was going to be part of one of the most
controversial cyber espionage cases the
Late 1985, Hanover, West Germany. This
is Peter Carl, a 30-year-old man from
Hanover, and he's just been fired from
one of the city's biggest casinos. The
casino was going through a rough time
with the owner allegedly using profits
to gamble and losing most of it in other
casinos. The story would turn into an
entire scandal a few years later. But
right now, the main focus is on Peter
Carl. He's currently sitting on a bench.
He knows that he's pretty much broke and
pers on what to do next. That's when he
remembers that one of his good friends
had been talking about something called hacking.
That friend was Durk Otto Berzinski aka
Dob. And after the latter explained what
hacking actually is, Peter proposes an
idea so that both Dob and his team of
hackers can make money. He explains that
he's got connections to businessmen in
the East and they'd probably love to buy
secret information. Dob thinks the
proposal is interesting and after a
short consideration agrees to reach out
to the rest of the hacking group, all of
whom agree to Peter's idea. There was
just one problem. Nobody knew who
exactly the buyer would be, at least not
Late 1985, Munich, West Germany.
>> It's late at night in German
intelligence service, BND headquarters,
and the higherups of the agency have
come together. The reason for the
meeting is the rising popularity of the
hacking scene, the dangers this could
cause, and the unchecked behavior of the
Chaos Computer Club. It was a serious
concern and even more because at this
time Arpanet a precursor to the modern
internet had been connected from the US
to the rest of the world. However, this
version of Arpanet allowed anyone with
the right credentials to access both
research and military systems that were
connected to the network. This openness,
while initially beneficial for
collaboration, became a weakness that
hackers began to exploit and thus turned
the German hacker scene into a major
risk factor. Either way, a BND official
called Christian Stusel, who was a
computer expert himself, explained that
they needed to do two things. First of
all, keep the German hackers in check,
and if plausible, use them for their own
intelligence benefits. Stusel superiors
like the idea and with the help of BND
director Iberhard Blum Stusel and a few
other BND members are tasked with
surveillance of hackers under an
operation cenamed project Rahab
something that will play a major role in
understanding future events.
March 14th 1986 Hanover, West Germany.
It's a rainy night in Hanover and the
group is meeting at Carl Kau's
apartment. They're chugging beers,
passing joints, and telling awful jokes.
But a few hours into the night, Peter
Carl suddenly tells everyone to quiet
down. He's got important news. He says
he's found a way to turn their hacking
skills into money, and a lot of it.
Apparently, Peter had contacted someone
in the East and was told that the
Soviets had serious embargo issues. This
meant that they were buying everything
they could. information on new tech,
weapons, and even simple memos. And they
were paying well. The group quickly
realizes where Peter's going with this.
He wants to sell their stolen info not
to Eastern businessmen, but directly to
the Soviet government itself. This
announcement was obviously unexpected.
However, money is money, and because all
of them needed some, they agreed to
Peter's proposal. Furthermore, they make
the case that to keep a lasting peace,
both the East and the West should have
the same levels of tech. Basically, they
thought that they could contribute to
worldwide peace by leveling the
technological playing field. There was
just one tiny issue. Peter Carl's
contact told him that for this to go
down, someone would have to talk to the
KGB directly, and that meant that one of
them would need to cross the border
straight into the heart of East
Germany's surveillance state. [Music]
Mid 1986, East Berlin border.
It's early in the morning and a car from
Hanover is waiting at the Hinrich
Hinastrasa crossing, a border checkpoint
between East and West Berlin. Inside
sits Peter Carl. He really doesn't want
to be there, but since it was his idea,
the group insisted he be the one to talk
to the KGB.
Everything is gray. Massive concrete
walls flank the checkpoint. Armed guards
patrol the street. And just when Peter
looks up at one of the guards in a
fortified tower, the traffic barrier
opens. He slowly drives into the control area.
And just when he stops, one of the East
German border officers orders him to
exit the car. The officer pats him down
and asks for his documents. At the same
time, another officer uses a mirror to
check underneath the vehicle. Peter is
incredibly nervous. He has stolen
documents on floppy discs hidden in the
car, and if they're found, he'll be in
serious trouble. Either way, while Peter
shows the first guard his documents, the
second soldier suddenly decides to
inspect the inside of the vehicle. But
luckily for Peter, he doesn't find
anything suspicious and gives his
colleague the okay.
Peter gets back into his car and drives
He's overcome the first obstacle, but
the second one will be just as hard. He
drives to the Soviet Trade Mission, a
known hot spot for undercover KGB
agents. There, he simply walks through
the front door and naively asks the
receptionist about the person he's
supposed to meet. The receptionist,
however, has no idea what he's talking
about and leaves.
A few minutes later, a tall suited man
appears. The man is none other than
Sergey, one of the new KGB specialists
in cyber related topics. About 180 mi
away. The gang is smoking pot at Coff's
apartment. Everyone is nervous and
nobody is talking. It's really late and
everyone is worried when suddenly [Music]
[Music]
It's Peter Carl. When Peter enters the
apartment, he walks through a room full
of smoke, slowly takes out an envelope,
and throws it on the table. Inside are
about 20,000 mark, which would be about $23,000
$23,000
today. The group erupts. Their plan had
worked and money was finally flowing.
However, there was one catch. The last
thing in the envelope was a strange
list. You see, Sergey had explained to
Peter that he needed better intel and
made a list of stuff they should search
for. This list included a bunch of
different bounties. For example, a
unique source code would be bought for
25,000 mark, compilers for 5,000 mark,
and so on. Basically, the Soviets gave
Peter a shopping list, and now it was
all up to the hackers. They could
finally use their abilities to make
money. And that's exactly what they did. [Music]
Kau and his gang lived in a world of
secrets, selling stolen data from the
west to the east, always looking over
their shoulders. Carl knew better than
most that the real danger isn't just
what you know, but who else gets access
to it. Today, the battlefield isn't the
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Stay protected because history shows us
what happens when secrets fall into the
wrong hands.
August 1986, California, United States.
This is Clifford Stole, an astronomer
working at the Lawrence Berkeley
Laboratory. He's been talking about his
computer skills and got himself
transferred to the lab's computer
center, something he really isn't happy
about. Suddenly, Dave, one of his
colleagues, walks into his office.
Apparently, something was wrong with the
lab's computer usage accounting
software. You see, at that time, the lab
was charging each scientist for their
time of computer usage, and the bill for
the last month's usage had a mistake in
it. For whatever reason, the bill was $2,387.75,
but only $2,387
had been paid. 75 cents were missing.
And given that the accounting software
calculated usage to the hundredth of a
penny, this wasn't a glitch. Stall is
curious about what's happening and
thinks that somebody is simply paying
less than he should. He tells Dave that
he'll look into it and everything looks
fine. That is until he reaches the
newest user. Someone called Hunter used
the lab's computers for a time amounting
to the missing 75 cents. But his account
didn't have a valid billing address and
traces of his activity had been wiped
from the system. Something weird was
going on with this account, but Stall
thinks it's a prank and after monitoring
it for a few days simply deletes the user.
But this isn't where the mystery ends. A
few weeks later, he receives a message
from the Naval Research Lab in Maryland.
Apparently, someone from Stall's lab had
tried to break into their systems, and
the user in question was someone called
Joe Ventic, a respected computer
scientist and Unix systems expert. And
this connection attempt would have made
sense. There was just one problem. Joe
Ventic, the owner of that account, was
in Cambridge, England. Stole, now slowly
realizing what's going on, checks the
accounts logs, and just like Hunter, the
activity logs had been deleted. The only
place where its activity was still saved
was in the lab's custom computer usage
system, which meant that whoever was
using the account didn't know about it
Meanwhile, on the other side of the
Atlantic Ocean, Carl Cau, Marcus Hess,
and the other hackers were partying.
They've been making a good amount of
money and weren't really saving any of
it. drugs, women, parties. They were
having the time of their life. All while
chasing the high of infiltrating the
most secure systems in the West.
However, for one of them, things started
to go too far. Carl Kau found himself
falling into the void of addiction,
specifically with LSD and cocaine. And
even though nobody knew it yet, this
would have serious consequences down the road.
road.
But back to Clifford Stall. He's been
observing the hacker, writing down what
he does every day. But one day, he
notices that the hacker had given
himself all privileges. He'd become an
admin with absolute control in the lab
system. And this was the final straw for
Stole. He picks up the phone and calls
the FBI. But on the other end, the
agents, probably not understanding what
he's talking about, simply brush him
off. Next, Stole contacts the CIA, who
also ignore him. And so did the NSA,
DOJ, and all other governmental agencies.
>> Hello. Are you still there?
>> You still talking to the computer group?
>> Yeah. Yeah. The nut job won't shut up
about his machines.
>> This meant that there was only one
possible next move. He had to catch the
hacker on his own.
Late 1986, Hanover, West Germany.
It's midnight when Marcus Hess aka Irmal
gets ready to search for sellable
information and usually he connects from
his home setup to the University of
Bremen and from there he tries to
infiltrate his victim's systems.
However, today is different. The
University of Bremen shut down its
networks for Christmas. So, he decides
to attack systems directly from his home
connection. Unluckily for him, one of
the places he infiltrates that night is
the Berkeley lab, the only place where
someone was actually waiting for him. On
the other side of the planet, Stole and
his colleague Steve were watching Hess
connect to their system. And today,
they're ready. They had created a fake
file which they named SDI or Strategic
Defense Initiative and filled it with
technical looking text and fake reports
to make it seem classified. But the
important part of this was that because
the file was so big, it would take a lot
of time to download. And if the hacker
fell for their honeypot, they would be
able to track him down. And this is
While Hess downloads the file, the two
Americans managed to find the hacker's
data network identification code, a sort
of country code for data networks during
the 80s. And this time the code
indicates that the connection is coming
from West Germany. Luckily for the two,
Steve knew a man called Wolf Gang
Hoffman, a manager at the German
Bundespost, the country's agency
responsible for telecommunications
services in West Germany at the time.
Steve asks Hoffman to take a look at the
full DNIC number to pinpoint the
hacker's exact connection. A few hours
later, Wolf Gang replies, "The hacker is
somewhere in the city of Hanover. The
first digital honeypot in history was a
complete success. But there was one
massive problem. Hoffman had tracked
down Hess without any warrants. And this
was of course illegal. This meant that
once the authorities were informed about
these events, everything up to that
point would be put under serious
scrutiny from the German justice system.
And as such, the famous German
bureaucracy machine also makes its
appearance. Interestingly, this machine
made so much noise that a bunch of
journalists working for NDR, one of the
biggest German media networks, heard
rumors about hacker spies in handover.
And these two journalists would turn
everything on its head.
1987, somewhere in West Germany,
it's around 8:00 p.m. and Marcus Hess is
doing an interview at a radio station.
In front of him are Axel Lersia and Burn
Schneamman, two journalists working for
NDR2. Both of them had heard the rumors
of hackers from handover. And at one
point during the program, one of them
suddenly asks Hess an unexpected question.
Hess quickly denies these claims, saying
that I can't say anything more about it,
except that I definitely did not work
for the Russians and that the suspicion
is complete nonsense.
Nonetheless, the two journalists could
tell that Hess was lying and realized
that they had a massive story on their
hands. A few hours later, they meet at
Schneimman's apartment and decide that
they have to find out what Hess is doing
at all costs. Shortly after, they reach
out to all of their contacts in the
handover hacker scene. Someone had to
know about Marcus Hess and his group
spying attempts. And luckily for them,
>> This is Johan Sperber, a teacher during
the day and a cyber activist at night.
He's highly connected in the handover
computer scene and good friends with the
two NDR journalists. He's currently
drinking a beer and smoking some
cigarettes with one of his
acquaintances. And this companion is
none other than Carl Kau. The two chat
and Kau reveals that he's been having a
lot of issues sleeping, but even worse,
he's been spending too much money and is
in a terrible place right now. Spurba
can clearly see that Kau is in a pretty
bad state, and not only financially.
Either way, he explains that he has an
opportunity for him to make some quick
cash, and all he had to do was meet up
with the two NDR journalists. Coch
hesitates for a second, but eventually
It's late at night and Carl Kau as well
as Pango are both sitting in the living
room of Shinman's apartment. In front of
them are two IBM portable computers as
The two intrude into the Optimus
database, which was none other than the
US Pentagon's database, a truly
important archive of confidential
information. During their intrusion, the
journalists asked them for keywords, and
the hackers would find any documents
The two NDR writers were surprised with
the abilities of the young men, and once
the filming concluded, they knew that
they had an insane story on their hands.
But the two journalists weren't the only
ones uncovering what Carl Kau was up to.
and Ma T show. [Applause]
[Applause] [Music]
[Music] [Applause]
[Music]
Luckily for the two journalists, the
police didn't find the hacking tapes.
However, the two got paranoid and
decided to hide the tapes in addition to
a bunch of notes and documents
pertaining to the KGB operation in a
safe deposit box at the Hamburg Central
Train Station. This box, however, had to
be refilled with a few coins every 48
hours, and as long as the two
journalists were doing this before the
time elapsed, the tapes were secure. Or
so they thought. You see, it's unknown
who exactly made the first mistake.
Nonetheless, one of the two journalists,
let's just assume it was Shinyaman, was
supposed to keep the safe deposit box
filled with coins. However, he had to
leave for an emergency, and when he
arrived at his destination, he tried to
contact Lara so that he could refill the
safe deposit box. Lara, however, didn't
pick up his phone. And this is because
at the same time Schneimman left for his
emergency, Lersia also left Hamburg. And
since he expected Shinyamman to pay the
box, he didn't alert his colleague. This
meant that the box full of hacking
tapes, KGB information, and personal
hacking notes had now turned into a
ticking time bomb. If neither of the two
journalists paid in time, an inspector
would remove the material and most
>> He was too late. And in front of him
were a bunch of police officers holding
none other than his security box. All
the tapes, documents, and even lists
from Sergey. Even worse was that a few
days before, Carl Caulk handed himself
to the police. He knew that the
authorities were on to him. His friends
had left him and he was literally losing
his mind due to his addictions. He had
nothing left and thought that the only
way out was to request espionage
amnesty. You see, West Germany was in a
spy war with the East and to attract
defectors, created a legal espionage
amnesty, which allowed spies to escape
prosecution if they confessed before
charges were filed. And Carl tried to
use this to his favor. He turned himself
in and agreed to testify if the charges
against him were to be dropped. A move
that would evolve into one of Germany's
March 2nd, 1989.
It's around 5:00 a.m. while a member of
the German intelligence service is
surveilling Marcus Hess at his
apartment. And today was going to be the
Marcus Hess, Durk Otto Berzinski, and
Peter Carl were all arrested on the 2nd
of March, 1989, and thus marked the end
of the first cyber spy ring in history.
Interestingly, at the same time, the two
journalists were fired from NDR and
their material was given to two other
journalists who went on to complete
their own documentary on the case. This
may seem like a small detail for now,
but keep it in mind. Either way, these
arrests and firings mark the end of the
hacking story. However, it also marks
the beginning of one of Germany's
These two men are agents from West
German law enforcement. And even though
the case is pretty much concluded,
they're still meeting up with Carl for
interrogation purposes. And this is
where things get weird. These meetings
apparently never ended for Kau. and
during them he was allegedly squeezed
for information on the broader hacking
scene. And all of this was after he was
double crossed by the West German office
for constitutional protection. You see,
before Carl turned himself in, he had
contact with a lawyer called Yan Schven,
someone that was going to help him with
the process of amnesty. And this is
where things get muddy. The lawyer
claims that he had a meeting with the
president of Hamburg's Office for
Constitutional Protection, also known as
BFV. There, the two talked about Kau's
case, and the lawyer was assured that if
Carl handed himself in and cooperated,
any criminal proceedings against him
would be ended. This, however, isn't
what happened. Instead, West Germany's
Federal Police Department immediately
opened a criminal investigation into
Caul, breaking their agreement with his lawyer.
lawyer.
And from here, the situation gets really
dark. The federal authorities began
periodically interrogating Kau, which
even took place at his home without any
surveillance. For some of these
interrogations, he was even sent to
federal police outposts where he
allegedly spilled information on not
only his group but the entire German
hacking community. All of this, of
course, without informing his lawyer.
Strangely though, during this time, Kau
was also given a job at the Christian
Democratic Union or CDU, which was and
still is one of the major political
parties in Germany. But things get even
weirder when we realize that at this
time the CDU was starting to secretly
receive hidden donations from a wide
range of companies to receive future
political favors. One of these hidden
donations came from Yrow GmbH and Co. at
the end of 1989 and amounted to 1.1
million German mark. Another interesting
person was Carl Hines Shriber, a weapons
dealer also beginning to talk to the CDU
for future favors. something that would
eventually culminate in privileges
involving a weapons deal with Saudi
Arabia. Either way, right when the CDU
begins their secret deals, Carl starts
working there. So now, for whatever
reason, a conspiracy obsessed ex-s
Soviet hacking spy is working at a major
political party which is itself involved
in a massive web of corruption. All of
this while being interviewed by unknown
parties in the German intelligence
[Music]
It's the middle of the day when a farmer
is doing his daily land inspection. It's
a nice and warm day. The sun is shining
and everything looks fine. However, just
before reaching the opposite side of his
There is a massive and almost perfectly
round circle of burnt trees and ground.
And in the middle of it all, he finds a
charcoal body almost completely unrecognizable,
unrecognizable,
burnt down to the bones. About an hour
later, the police arrive at the scene,
and alongside the farmer, they can't
explain one major thing. Why did the
fire stop in such an unnatural way? You
see, this was in the middle of the year.
It was hot outside and the farmer's
field was full of litter and dry grass.
Also, it hadn't rained in days. So, why
did the fire stop? And who even was this
dead person? Nothing seemed to make
sense. And as the investigation began,
the authorities decided to search the
surroundings, which led them to the
first clue,
a gasoline container, probably used to
set the person or area on fire. A few
hours later, another police officer
The officer quickly writes down the
license plate and contacts headquarters
to review the car's license plate.
Apparently, the car was a company
vehicle registered to the handover CDU,
and the last person seen in it was Carl
Coch, who had gone missing 9 days ago.
The corpse was quickly identified as
Caul. However, there was still one
massive question. Why did he die? And
also, who was responsible? These are
questions that still have not been fully
answered. The official cause of death is
disputed and to this day multiple
theories try to explain what really
happened. But none of them have been
able to answer what truly happened to
To make these videos, we spend a lot of
time and money creating 3D scenes and
animations from scratch. And when people
comment saying it's AI, we get a bit
surprised. Eric, me, the voiceover
artist, is also a real person. Something
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