Now we’ve learned a much more colorful part of Anderson’s history: In 1985, when he was fourteen and in high school in Escondido, California, Anderson was subject to one of the largest FBI raids in California history after hacking into a Chase Manhattan Bank computer system and subsequently showing his friends how to do it. He was never arrested because he was a minor, but the FBI confiscated all of his computer equipment and some newspaper accounts of the incident stated incorrectly (see image below from a 1986 LA Times story) that he was “convicted in federal court of computer hacking and placed on probation” (the statements were corrected in subsequent articles). Anderson used the hacker name “Lord Flathead.”
According to a New York Times article in October 1985, “Lord Flathead,” was the leader of an early black-hat hacker group when he was 14 years old. In July and August 1985, between his freshman and sophomore years, Anderson hacked into a Chase Manhattan Bank DEC VAX computer system (like the one in the image below) that handled “much of Chase’s data processing and record keeping, including records of home mortgages and…portfolios of major customers such as pension funds.” He subsequently showed up to 40 of his friends how to do it.
The bank notified the FBI and they set up an “electronic trap in the computer system that traced the calls to at least 23 homes in the San Diego area.” Fifty FBI agents then raided the homes of Anderson and his friends and seized 25 personal computers. The raids were conducted simultaneously at 7 pm to prevent anyone from notifying the other hackers and giving them a chance to destroy evidence. This was one of the largest FBI raids in California history. Our source says the FBI was expecting a serious criminal conspiracy ring of hardcore hackers, not a group of teens led by Anderson, a high school freshman.
Supporting documents are here. The LA Times article linked above and the Newsweek article talk about a friend of Anderson, a hacker named Bill Landreth, a published author for Microsoft Press on computer security issues. At Bill’s suggestion Anderson spoke with a literary agent and published books about computer security as well (we are trying to track them down).
Landreth was living with Anderson’s family and disappeared in September 1986 after leaving a suicide note. We haven’t been able to determine Landreth’s fate, although based on this article from 1991 he or someone with his name became a government agent investigating security crimes.