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KINGPIN

When he found them, he downloaded 2.3 gigabytes of compressed data and burned it onto CD-ROMs, only later obtaining a warrant from a federal judge to search through the information he'd grabbed. It was the first international evidence seizure through hacking.

When the feds dug into the data, the breathtaking scope of Ivanov's activity became clear. In addition to the extortion plots, Ivanov had developed a frighteningly effective method for cashing out the cards he stole, using custom software to automatically open PayPal and eBay accounts and bid on auctioned goods with one of the half-million stolen credit cards in his collection. When the program won an auction, it had the goods shipped to Eastern Europe, where an associate of Ivanov picked them up. Then the software did it all again and again. PayPal checked the stolen credit card list against its internal databases and found it had absorbed a stunning $800,000 in fraudulent charges.

It was the first tremor in a tectonic shift that would fundamentally change the Internet for the next decade. Maybe forever. With top-flight technical colleges but few legitimate opportunities for their graduates, Russia and the former Soviet satellite states were incubating a new breed of hacker.

Some, like Ivanov, were amassing personal fortunes by looting consumers and companies, protected by corrupt or lazy law enforcement in their home countries and poor international cooperation. Others, like Gorshkov, were driven into crime by tough economic circumstances. The hacker graduated from Chelyabinsk State Technical University with a degree in mechanical engineering and sank a small inheritance from his father into a computer-hosting and Web-design business. Despite his swaggering hacker machismo at Invita, Gorshkov had been a late addition to Ivanov's gang, and he'd paid his own way to America in the hope of improving his fortunes. In a way, he did: After his arrest in Seattle, he was earning more in prison doing janitorial and kitchen work at eleven cents an hour than his fiancée was drawing on public assistance back home.

After his arrest, Ivanov began cooperating with the FBI, rattling off a