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Federal authorities arrested one man in Miami and another in Spokane, Wash., today in connection with what they said was a hacking scheme involving the resale of Internet telephone service.

The suspects were said to have illegally tapped into the lines of legitimate Internet phone companies, saddling them with the expense of extra traffic, while collecting more than $1 million in connection fees.

The case, one of the first involving this kind of elaborate Internet phone hacking, illustrated how Internet-based communications may be criminally exploited, and raised fresh questions about the security of phone traffic over largely unregulated networks.

Prosecutors say that starting in November 2004, the man arrested in Miami — Edwin Andres Pena, 23, a Venezuelan who has permanent residency in the United States — used two companies he created to offer wholesale phone connections at discounted rates to small Internet phone companies.

Instead of buying access to other networks to connect his clients' calls, Mr. Pena paid about $20,000 to Robert Moore, the man arrested in Spokane, to create "what amounted to 'free' routes by surreptitiously hacking into the computer networks" of unwitting Internet phone providers, and then routing his customers' calls over those providers' systems, according to the federal complaint.

Source: New York Times

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