The Scientologist and the superstar hacker: A stock market fable for our times

Kevin Mitnick (b. 1963) was on the FBI’s most wanted list in 1992. As the most notorious and skilled hacker in the US, Mitnick had first crossed the line in the 1980s when he hacked into corporate networks and stole entire computer programs. Mitnick was arrested in 1988, served a year in prison, and was released on supervised probation.

After his release from jail, Mitnick found the temptation to hack too great to resist and reoffended. Mitnick went on a three year rampage. He hacked and destroyed computer networks, stole proprietary data, and generally did whatever he wanted to do online. A US Federal arrest warrant was issued for Mitnick in 1992.

The elusive Mitnick disappeared and kept hacking from the shadows. In one of his capers, Mitnick hacked a computer and stole over 20,000 credit card numbers belonging to powerful players in Silicon Valley. In another, Mitnick hacked a California phone network and was able to wiretap and listen in on the FBI agents in the task force that were pursuing him.

In another exploit, Mitnick hacked the computers of the computer security expert, white hat hacker, and Cal Tech computational physicist Tsutomu Shimomura. Outraged at Mitnick’s theft of materials from his computer, Shimomura was determined to settle the score by tracking down Mitnick. Using sophisticated traffic analysis methods and working with the FBI, Shimomura tracked Mitnick to an apartment in Raleigh, North Carolina.

The FBI moved in and arrested Kevin Mitnick at 1:30 am in February 1995. Mitnick was denied bail and spent the next four years in jail before agreeing to a plea deal in which he served another year in jail. When he was released after five years, Mitnick was a legendary figure in the computer world.

Mitnick created his own security company and became a white hat hacker. In this capacity, companies and government agencies pay Mitnick to try to hack their computers. Mitnick is very successful and almost always hacks systems. He then explains how he did it and helps his clients reinforce their networks.

One key element in Mitnick’s services is to train employees to not download unknown files or give away information to people on the phone. Mitnick has said the the human element is the weakest link in any computer element. In one of his cases, Mitnick posed as an employee of an alarm company. He showed up at a client’s facility and said he needed to make some adjustments to the alarm system. The employee allowed him in and gave him access to the company’s network.

Kevin Mitnick calls this “social engineering” which he defines as the ability of a hacker to manipulate people into giving the hacker what he or she wants. This can include passwords, access to systems, names of key people, and other data a hacker would find useful.

In 2010, Scientologist Stu Sjouwerman (pronounced “Shower-man”) created a company called KnowBe4. Sjouwerman’s company essentially followed Kevin Mitnick’s methodology of training the employees of client companies about social engineering. KnowBe4, based in the Scientology stronghold of Clearwater, Florida, teaches employees about phishing, indiscriminately downloading files in e-mails, and other tricks used by hackers.

After training employees, KnowBe4 staff conducts simulated cyber attacks on a client to see how well its employees have learned the lessons. Sjouwerman’s company wants employees to “KnowBe4” they do something on a computer: To be forewarned is to forearmed.

Sjouwerman’s company showed steady growth from 2010 until 2015, when it reached $7 million in revenue.

It was in 2015 that Stu Sjouwerman said he met super-hacker Kevin Mitnick through a mutual friend. According to a Cybercrime Magazine article, Sjouwerman had an ephiany:

“I can own 100 percent of a muffin or I can own 50 percent of a really large pie, so what am I going to do?” KnowBe4 founder and CEO Stu Sjouwerman asked himself in the formative days of the company.

Sjouwerman went for the pie. “I gave him — Kevin Mitnick, KnowBe4’s chief hacking officer — half the company for his 30 years of hacking experience. The rest is history.”

Sjouwerman’s bet appears to have paid off. According to KnowBe4 published figures, the company skyrocketed after Mitnick came aboard, to $175 million in revenue in 2019.

On April 22, Sjouwerman and Mitnick took KnowBe4 public, raising about $175 million.

Which is pretty amazing, when you think about how companies around the country are trusting their most intimate security issues to an OT Scientologist and his hacker partner. Ah, capitalism!

Underground Bunker readers will also remember Sjouwerman for his performance at the Clearwater City Council last year, asking it not to appoint Scientology critic and new city councilman Mark Bunker to a non-voting seat on the Downtown Development Board.

 
Stu is also a Diamond Meritorious donor, having given at least $5 million to the IAS, Scientology’s membership organization.

 
In other news regarding Scientologists and their money, Scientology donor Grant Cardone succeeded in getting a class action lawsuit filed by investor Luis Pino dismissed. A judge threw the case out on the grounds that Pino had failed to prove that Cardone was making misleading claims on social media about investing in his company, and also that Cardone had the right to suspend payments to investors in April and May 2020 as the pandemic hit.

Cardone told the Real Deal: “It is a shame that in our society, ambulance seeking, vampiric blood-drinking litigation attorneys attempt to threaten people like me who are trying to build businesses,” Cardone said. “The case was completely baseless. There was zero truth to the allegations.”

The Real Deal also noted that Grant and Elena Cardone have purchased Tommy Hilfiger’s $28 million Golden Beach mansion in South Florida.

— Jeffrey Augustine

 
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Bonus items from our tipsters

Chicago is rambling toward a grand opening.

 
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Happy Mother’s Day

Here in the US we’re celebrating Mother’s Day today, and we hope that you’re getting to have some reunions out there now that vaccinations are taking hold and the pandemic is gradually retreating.

But we reserve a special greeting to those moms out there who have a difficult time not only this year but every year because of Scientology’s toxic policy of disconnection. We’re with you, and we want you to know that we’re looking forward to the day when you can overcome this totalitarian organization’s forced separations.

— The Proprietor

 
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‘Sons of Sam’ on Netflix

Several people have reached out to us about the new ‘Sons of Sam’ documentary about David Berkowitz and journalist Maury Terry on Netflix, which has a brief mention of Scientology.

After viewing the series, we’ll say that we’re glad that some voices of reason like former NYPD Detective Joseph Borrelli play a prominent part in it.

Also, it was a real treat to see Wayne Darwen, someone we have encountered before, and whose participation says a lot about this series. His thirst for a story that sells, whether it’s true or not, certainly is reflected in our own experience with him. And to that end, we encourage you to read our unusual 2000 story for New Times Los Angeles (which we previously reprinted here at the Bunker), Sex, Spies and VideoTape.

 
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Dianetics at 71

Thank you, Sunny, for reminding us that it’s Dianetics Day today. On this date in 1950, L. Ron Hubbard published the book that turned everything around for him and launched what would become the Scientology movement, ‘Dianetics: The Modern Science of Mental Health.’

Please see our story on this date last year when we celebrated the 70th anniversary of this august occasion.

 
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Source Code

“The US in a Masterpiece has officially stated it has no responsibility for its money. They can say that twice. The scoop is that genius Nixon’s Federal Reserve Board lowered bank rates in the US, causing US investment money to flee to Europe. Nazi bankers caught the ball so deftly tossed to them by their US agents and began a smash attack on the dollar. Exchange is still 3.8 francs to a dollar in Switzerland. It should be 4.3. Costing us our shirts. We don’t dare deposit and lose. Somebody in the US Federal Reserve is working very hard for his Iron Cross First Class.” — L. Ron Hubbard, May 9, 1971

 
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Avast, Ye Mateys

“ALL CREW: Please submit to me knowledge reports on any injustices that you may know about. Injustices must be righted. Thank you.” — Lt. Cmdr. Diana Hubbard, May 9, 1969

Overheard in the FreeZone

“LRH got to the point where he was able to perceive what is actually happening here and in the local (galactic) area and so I would not dismiss any concerns about SPs taking over here. I like to look at it from the viewpoint that sowing a seed on one planet would not be sufficient. What if it did not grow and was thwarted before it could turn into a tree? Not every acorn becomes a mighty oak. I would go out and do what every oak tree does. Sow thousands of acorns. And LRH is a lot smarter than I. And as for being welcome in other areas, Well, when you get to OT I think that is a different matter. You can go where you bloody well like. ESPECIALLY if you have training and experience in your repertoire. This planet may or may not be fucked (to coin a phrase) but the Galaxy isn’t.”

 
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Past is Prologue

2000: From the Washington Post: “We hear that members of the Church of Scientology were being urged last weekend to see, over and over again, Scientologist John Travolta’s universally panned movie ‘Battlefield Earth,’ based on the novel by Scientology founder L. Ron Hubbard. An e-mailed message exhorted: ‘Battlefield Earth MUST beat Gladiator on the first weekend B.E. comes out. Anything after that doesn’t count!’ Alas, the hugely expensive ‘Battlefield Earth’ did a disappointing $11.5 million in weekend business, compared with $24.6 million for ‘Gladiator.’ Church spokesman Mike Rinder yesterday insisted the Church had nothing to do with the e-mail. ‘It’s pretty sickening,’ he told us. ‘The last three weeks have been consumed with people telling people not to see the movie.’ We suppose he means film critics.”

 
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Random Howdy

“Hey, a free trip to America and free rice and beans probably sounds pretty good to a fairly large segment of the world’s population.”

 
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Full Court Press: What we’re watching at the Underground Bunker

Criminal prosecutions:
— Danny Masterson charged for raping three women: Preliminary hearing set for May 18.
— Jay and Jeff Spina, Medicare fraud: Jay sentenced to 9 years in prison. Jeff’s sentencing to be scheduled.
— Hanan and Rizza Islam and other family members, Medi-Cal fraud: Trial scheduled for May 20 in Los Angeles
— David Gentile, GPB Capital, fraud: Next pretrial conference set for June 18.

Civil litigation:
— Luis and Rocio Garcia v. Scientology: Oral arguments were heard on July 30 at the Eleventh Circuit
— Valerie Haney v. Scientology: Forced to ‘religious arbitration.’ Petition for writ of mandate denied Oct 22 by Cal 2nd Appellate District. Petition for review by state supreme court denied Dec 11.
— Chrissie Bixler et al. v. Scientology and Danny Masterson: Dec 30, Judge Kleifield granted Scientology’s motions to compel arbitration. June 7: Status conference.
— Matt and Kathy Feschbach tax debt: Eleventh Circuit ruled on Sept 9 that Feshbachs can’t discharge IRS debt in bankruptcy. Dec 17: Feshbachs sign court judgment obliging them to pay entire $3.674 million tax debt, plus interest from Nov 19.
— Brian Statler Sr v. City of Inglewood: Second amended complaint filed, trial set for Nov 9, 2021.
— Author Steve Cannane defamation trial: Trial concluded, Cannane victorious, awarded court costs. Case appealed on Dec 24.

Concluded litigation:
— Dennis Nobbe, Medicare fraud, PPP loan fraud: Charged July 29. Bond revoked Sep 14. Nobbe dead, Sep 14.
— Jane Doe v. Scientology (in Miami): Jane Doe dismissed the lawsuit on May 15 after the Clearwater Police dropped their criminal investigation of her allegations.

 
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SCIENTOLOGY BLACK OPS: Tom Cruise and dirty tricks

The Australian Seven News network cancelled a 10-part investigation of Scientology and its history of dirty tricks. Read the transcripts of the episodes and judge for yourself why Tom Cruise and Tommy Davis might not have wanted viewers to see this hard-hitting series by journalist Bryan Seymour.

SCIENTOLOGY: FAIR GAME

After the success of their double-Emmy-winning, three-season A&E series ‘Scientology and the Aftermath,’ Leah Remini and Mike Rinder continue the conversation on their podcast, ‘Scientology: Fair Game.’ We’ve created a landing page where you can hear all of the episodes so far.

LEAH REMINI: SCIENTOLOGY AND THE AFTERMATH

An episode-by-episode guide to Leah Remini’s three-season, double-Emmy winning series that changed everything for Scientology watching. Originally aired from 2016 to 2019 on the A&E network, and now on Netflix.

SCIENTOLOGY’S CELEBRITIES, from A to Z

Find your favorite Hubbardite celeb at this index page — or suggest someone to add to the list!

 
Other links: Scientology’s Ideal Orgs, from one end of the planet to the other. Scientology’s sneaky front groups, spreading the good news about L. Ron Hubbard while pretending to benefit society. Scientology Lit: Books reviewed or excerpted in a weekly series. How many have you read?

 
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THE WHOLE TRACK

[ONE year ago] Dianetics at 70: Scientology’s bible, endorsing child molestation since May 9, 1950
[TWO years ago] Death in the Timor Sea: The darkest war secret of Scientology’s founder, L. Ron Hubbard
[THREE years ago] Early witness Don Rogers on Hubbard and ‘prior lives’: ‘Nothing but a parlor hypnosis trick’
[FOUR years ago] Danny Masterson hires Michael Jackson criminal defense attorney Tom Mesereau in rape probe
[FIVE years ago] 66 years ago, L. Ron Hubbard transubstantiated from pulp writer to god among men
[SIX years ago] Scientology answers Garcia motion: We are definitely a bona fide worldwide religion!
[SEVEN years ago] Ryan Hamilton adds Colorado in new lawsuits against Scientology’s rehab network
[EIGHT years ago] Search Warrant Affidavit: Scientology’s Atlanta Drug Rehab Billed $3 Million in Insurance Fraud

 
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Posted by Tony Ortega on May 9, 2021 at 07:00

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Our new book with Paulette Cooper, Battlefield Scientology: Exposing L. Ron Hubbard’s dangerous ‘religion’ is now on sale at Amazon in paperback and Kindle formats. Our book about Paulette, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback, Kindle, and audiobook versions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information can also be found at the book’s dedicated page.

The Best of the Underground Bunker, 1995-2020 Just starting out here? We’ve picked out the most important stories we’ve covered here at the Underground Bunker (2012-2020), The Village Voice (2008-2012), New Times Los Angeles (1999-2002) and the Phoenix New Times (1995-1999)

Other links: BLOGGING DIANETICS: Reading Scientology’s founding text cover to cover | UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists | GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice | SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts | Shelly Miscavige, 15 years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill | The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ

Watch our short videos that explain Scientology’s controversies in three minutes or less…

Check your whale level at our dedicated page for status updates, or join us at the Underground Bunker’s Facebook discussion group for more frivolity.

Our non-Scientology stories: Robert Burnham Jr., the man who inscribed the universe | Notorious alt-right inspiration Kevin MacDonald and his theories about Jewish DNA | The selling of the “Phoenix Lights” | Astronomer Harlow Shapley‘s FBI file | Sex, spies, and local TV news | Battling Babe-Hounds: Ross Jeffries v. R. Don Steele