From the archive, originally posted by: [ spectre ]




Defense Contractors Warned About Spy Coins


Money talks, but can it also follow your movements?

Which country planted the coins with the tiny transmitters? Outside
experts cited several suspects, including China, Russia and France. All
are believed to have espionage operations inside Canada and the ability
to produce such technology.

In a U.S. government warning high on the creepiness scale, the Defense
Department cautioned its American contractors over what it described as
a new espionage threat: Canadian coins with tiny radio frequency
transmitters hidden inside.

The government said the mysterious coins were found planted on U.S.
contractors with classified security clearances on at least three
separate occasions between October 2005 and January 2006 as the
contractors traveled through Canada.

Intelligence and technology experts said such transmitters, if they
exist, could be used to surreptitiously track the movements of people
carrying the spy coins.

The U.S. report doesn’t suggest who might be tracking American defense
contractors or why. It also doesn’t describe how the Pentagon
discovered the ruse, how the transmitters might function or even which
Canadian currency contained them.

Further details were secret, according to the U.S. Defense Security
Service, which issued the warning to the Pentagon’s classified
contractors. The government insists the incidents happened, and the
risk was genuine.

“What’s in the report is true,” said Martha Deutscher, a spokeswoman
for the security service. “This is indeed a sanitized version, which
leaves a lot of questions.”

Top suspects, according to outside experts: China, Russia or even
France – all said to actively run espionage operations inside Canada
with enough sophistication to produce such technology.

The Canadian Security Intelligence Service said it knew nothing about
the coins.

“This issue has just come to our attention,” CSIS spokeswoman Barbara
Campion said. “At this point, we don’t know of any basis for these
claims.” She said Canada’s intelligence service works closely with its
U.S. counterparts and will seek more information if necessary.

Experts were astonished about the disclosure and the novel tracking
technique, but they rejected suggestions Canada’s government might be
spying on American contractors. The intelligence services of the two
countries are extraordinarily close and routinely share sensitive

“It would seem unthinkable,” said David Harris, former chief of
strategic planning for the Canadian Security Intelligence Service. “I
wouldn’t expect to see any offensive operation against the Americans.”

Harris said likely candidates include foreign spies who targeted
Americans abroad or businesses engaged in corporate espionage. “There
are certainly a lot of mysterious aspects to this,” Harris said.

Experts said such tiny transmitters would almost certainly have limited
range to communicate with sensors no more than a few feet away, such as
ones hidden inside a doorway. The metal in the coins also could
interfere with any signals emitted.

“I’m not aware of any (transmitter) that would fit inside a coin and
broadcast for kilometers,” said Katherine Albrecht, an activist who
believes such technology carries serious privacy risks. “Whoever did
this obviously has access to some pretty advanced technology.”

Experts said hiding tracking technology inside coins is fraught with
risks because the spy’s target might inadvertently give away the coin
or spend it buying coffee or a newspaper. They agreed, however, that a
coin with a hidden tracking device might not arouse suspicion if it
were discovered in a pocket or briefcase.

“It wouldn’t seem to be the best place to put something like that;
you’d want to put it in something that wouldn’t be left behind or
spent,” said Jeff Richelson, a researcher and author of books about the
CIA and its gadgets. “It doesn’t seem to make a whole lot of sense.”

Canada’s largest coins include its $2 “Toonie,” which is more than
1-inch across and thick enough to hide a tiny transmitter. The CIA has
acknowledged its own spies have used hollow, U.S. silver-dollar coins
to hide messages and film.

The government’s 29-page report was filled with other espionage
warnings. It described unrelated hacker attacks, eavesdropping with
miniature pen recorders and the case of a female foreign spy who
seduced her American boyfriend to steal his computer passwords.

In another case, a film processing company called the FBI after it
developed pictures for a contractor that contained classified images of
U.S. satellites and their blueprints. The photo was taken from an
adjoining office window.



They say money talks, and a new report suggests Canadian currency is
indeed chatting, at least electronically, on behalf of shadowy spies.

Canadian coins containing tiny transmitters have mysteriously turned up
in the pockets of at least three American contractors who visited
Canada, says a branch of the U.S. Department of Defence.

Security experts believe the miniature devices could be used to track
the movements of defence industry personnel dealing in sensitive
military technology.

“You might want to know where the individual is going, what meetings
the individual might be having and, above all, with whom,” said David
Harris, a former CSIS officer who consults on security matters.

“The more covert or clandestine the activity in which somebody might be
involved, the more significant this kind of information could be.”

The counter-intelligence office of the U.S. Defence Security Service
cites the currency caper as an example of the methods international
spies have recently tried to illicitly acquire military technology.

Nearly 1,000 ‘suspicious’ contacts

The service’s report, Technology Collection Trends in the U.S. Defence
Industry, says foreign-hosted conventions, seminars and exhibits are
popular venues for pilfering secrets.

The report is based on an analysis of 971 “suspicious contact reports”
submitted in fiscal 2005 by security-cleared defence contractors and
various official personnel.

“On at least three separate occasions between October 2005 and January
2006, cleared defence contractors’ employees travelling through Canada
have discovered radio frequency transmitters embedded in Canadian coins
placed on their persons,” the report says.

The report did not indicate what kinds of coins were involved. A
service spokeswoman said details of the incidents were classified.

As a result, the type of transmitter in play – and its ultimate
purpose – remain a mystery.

However, tiny tracking tags, known as RFIDs, are commonly placed in
everything from clothing to key chains to help retailers track

Each tag contains a miniature antenna that beams a unique ID code to an
electronic reader. The information can then be transferred by the
reader into a computerized database.

Makes no sense

The likely need for such a reading device means the doctored coins
could be used to track people only in a controlled setting, not over
long distances, said Chris Mathers, a security consultant and former
undercover RCMP officer.

“From a technology perspective, it makes no sense,” he said. “To me
it’s very strange.”

Then there’s the obvious problem: what if the coin holder plunks the
device into a pop machine?

“You give the guy something with a transmitter that he’s going to spend
– I mean, he might have it for an hour,” Mathers said with a chuckle.

Harris speculates recent leaps in miniaturization could allow for a
sophisticated transmitter capable of monitoring a target’s extensive

“I think we can be pretty darn confident that the technology is there
for the sorts of micro-units that would be required to embed these
things in a coin,” he said.

“It’s a brave new world, and greatly concerning on so many levels.”

Passing the coin to an unwitting contractor, particularly in
strife-torn countries, could mark the person for kidnapping or
assassination, Harris said.

“You could almost, by handing a coin to somebody, achieve the
equivalent of the Mafiosi’s last kiss on the cheek.”

The Defence Security Service report says employees of U.S. contractors
reported suspicious contacts from individuals, firms or governments of
more than 100 countries during the year.

Technologies that generated the most interest were information systems,
lasers and optics, aeronautics and sensors.

A foreign approach often meant a simple request for information from
the contractor.

Can contain built-in scanners

But the report also underscores clandestine means of acquiring secrets
from U.S. employees, particularly those travelling abroad.

“It is important to recognize copiers and shredders can contain
built-in scanners to copy the data.”

Other common methods include placing listening devices in rooms,
searching hotel rooms, inspecting electronic equipment and
eavesdropping on conversations.

The report, which first came to light in a U.S. newspaper, has since
been posted on the website of the Federation of American Scientists, an
organization that tracks the intelligence world and promotes government



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