[ISN] Spy coin report overblown, U.S. official says

From: InfoSec News (alerts@private)
Date: Thu Jan 11 2007 - 22:03:58 PST


Globe and Mail Update

A report that that some Canadian coins have been compromised by secretly 
embedded spy transmitters is overblown, according to a U.S. official 
familiar with the case.

There is no story there, the official, who asked not to be named, told 
The Globe and Mail.

He said that while some odd-looking Canadian coins briefly triggered 
suspicions in the United States, he said that the fears proved 
groundless: We have no evidence to indicate anything connected with 
these coins poses a risk or danger.

A report from a Pentagon agency made headlines this week after it stated 
unequivocally that Canadian coins found in the possession of U.S. 
defence contractors had been tampered with.

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 
on their persons, reads the U.S. Defence Security Service report.

The account which gave no further elaboration appeared in the latest 
annual edition of the agency's Technology Collection Trends in the U.S. 
Defence Industry report.

The declassified report also made vague references to other cases, 
including one in which a female spy allegedly seduced a U.S. government 
translator for his computer password. In another example, a defence 
contractor with carpal-tunnel syndrome raised concerns after using a 
voice-recorded pen to take notes during sensitive meetings Nothing else 
is known about these cases. But the item about the Canadian coins item 
appeared to be the result of only partial intelligence.

Defence contractors had apparently been give certain special-issue 
Canadian coins, the unfamiliar look of which caused them to be concerned 
about the money, a source said. That led to an investigation once the 
contractors returned to the United States .

But a U.S. agency that investigated the complaint found no evidence of 
any secret transmitters, or of any other tampering.

It's not clear why this information failed to find its way into the 
released U.S. Defence Security Service report.

The U.S. agency works with military contractors to make sure that 
sensitive U.S. secrets aren't stolen by spies. The case of the Canadian 
coins was just one of the case studies released in the unclassified 
version of the report.

There is a classified version of the report with more details 
circulating within the U.S. government, but officials are not speaking 
to it.

Canadian officials, who were not in the loop on the U.S. investigation, 
reacted to the transmitter-carrying coins skeptically.

What is the value of a device for tracking someone when it changes hands 
so frequently and so readily?, said Alex Reeves, a spokesman for the 
Royal Canadian Mint, in an interview.

In addition to standard currency, the Mint produces special-issue coins, 
like pink-ribbon quarters to raise awareness about breast cancer or 
lucky Loonies to celebrate Canada's accomplishments in hockey.

Mr. Reeves said it is a crime for anyone to tamper with Canadian money.

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