/Convicted tax fraudster sues CNBC for defamation, says he’s not a “hacker”

Convicted tax fraudster sues CNBC for defamation, says he’s not a “hacker”

An actor playing a simulated Daniel Rigmaiden in <em>American Greed</em>.
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/ An actor playing a simulated Daniel Rigmaiden in
American Greed.

Daniel Rigmaiden wants the world to know that, while CNBC’s American Greed television show may have portrayed him more than two years ago as a “hacker,” a “recluse,” and more, he is none of those things.

Earlier this year, Rigmaiden sued NBCUniversal, CNBC’s parent company, and an Arizona Republic journalist shown in that episode, accusing them all of defamation.

Rigmaiden wants unspecified damages and also a permanent injunction that would stop further distribution of the episode, which is currently available on Amazon Video for $2.99.

Lawyers for CNBC have tried to get the case dismissed, and the two sides will face off in a Miami-Dade County courthouse on Monday, November 19.

In actuality, Rigmaiden is a man convicted of tax fraud who became a privacy activist—he has become something of an icon in surveillance-law nerd circles.

“Plaintiff did not use black-hat computer hacking to steal money from the IRS,” he wrote. “Plaintiff used computer software to automate the process of filing fraudulent tax returns and collecting the refunds. The IRS was not hacked by Plaintiff, and Plaintiff otherwise did not use black-hat computer hacking to facilitate the tax-refund fraud scheme.”

In April 2014, Rigmaiden and federal prosecutors came to a plea agreement in his case, and he was sentenced to time served: 68 months. (Full disclosure: I interviewed Rigmaiden a couple of times for my 2018 book, Habeas Data. An excerpt of the relevant portion was published on Politico.)

While incarcerated, Rigmaiden vigorously defended himself in court and began to shed a great deal of light on the device used to catch him in 2008, a cell-site simulator, or stingray. While Rigmaiden ultimately was not successful in convincing the judge in his case that the warrantless use of the device was unconstitutional, he had much better luck in the court of public opinion, where he attracted privacy researchers and journalists to his plight.

Since then, he has parlayed his skills toward crafting more privacy-minded legislation in Washington state and just might know more about how stingrays work than anyone outside of law enforcement or on a government contract. Since being released from the Arizona county jail where he had been held, Rigmaiden eventually moved to Florida, where he has been working as a freelance Web developer.

As he wrote in Rigmaiden v. NBCUniversal et al.:

From the time of Plaintiff’s arrest on August 3, 2008 (more than a decade ago), Plaintiff has been an outstanding citizen. He has not even had so much as a parking ticket since the time of his release more than four (4) years ago. Plaintiff is remarkably rehabilitated. So much so that he has been trusted to assist in drafting legislation that law enforcement must follow while investigating suspected criminals and when searching for missing persons. Likewise, he has been appointed as a defense expert under the Criminal Justice Act (CJA) and paid by the United States District Court for his expert services.

A 20-year saga

So what exactly is Rigmaiden so upset about?

Primarily, he appears to be incensed by CNBC’s inaccurate descriptions of his past, including allegations that he hijacked computers, served jail time for identity theft, and made seemingly violent threats.

In the opening minutes of the episode of American Greed, the narrator intones that, back in 1998, “Internet posters accuse [Rigmaiden] of selling grossly overpriced Beanie Baby stuffed animals and of hijacking their computers to spam others.”

Rigmaiden maintains that he “did not hijack computers (an act commonly known as a felony) in the year 1998, whether for sending spam or otherwise.”

Then, the episode accurately explains how Rigmaiden decided not to go to college and instead began a career selling fake IDs online. But less than a minute later, the episode states that Rigmaiden was “jailed for six months for identity theft.”

In fact, in 1999, Rigmaiden was sentenced by a court in Monterey County, California, to probation and 180 days in jail for “acquisition of access-card information.” But he never served the time, as he skipped out on a probation hearing. He had an outstanding arrest warrant in California until 2014, when his federal case concluded.

The episode also claims that, during his tax-fraud scheme, he used “malware programs called bots,” which Rigmaiden flatly denies.

“To facilitate the tax-refund scheme, Plaintiff was not using malware programs called bots, he was not spreading viruses, and he was not taking remote control of random computers (acts commonly known as felonies),” he writes in the civil complaint. “Neither Plaintiff’s indictment nor the Factual Statement contain any of these claims.”

But perhaps the most egregious falsehood, Rigmaiden suggests, is the moment in the episode where he is portrayed as being “willing to kill if anything goes wrong.”

At this point in Rigmaiden’s story, we’ve almost reached the moment when law enforcement, which had been investigating him for some time, was finally close to reaching him.

“Did not write”

While the American Greed episode doesn’t cite the IRS specifically, this “willing to kill” narrative comes directly from an affidavit filed in Rigmaiden’s case, just 19 days after his arrest.

As the IRS special agent wrote:

On April 17, 2008, [Confidential Informant] 2 sent an e-mail to the “Hacker” explaining he/she had received an additional $9,000.00 in currency from the Meridian undercover bank account, and was expecting to receive an additional $75,000.00 by April 22, 2008. CI 2 inquired how the “Hacker” wanted his cut of the money. The “Hacker” provided CI 2 detailed instructions regarding how to physically wash $68,000.00 in currency with lantern fuel to remove any drug or explosive residues which might cause a detection dog to alert on the package. CI 2 was further instructed to double vacuum-seal the currency, to place the sealed currency in the cavity of a toy, gift-wrap the toy so it appeared to be a present, attach a birthday card for a dying child, package it for overnight FedEx delivery, and have the package held for pickup at the destination location.

Additionally, the “Hacker” informed CI 2 he would send a courier, armed with an AR-15 [semi-automatic rifle] in a duffle bag, to pick up the package. The “Hacker” added the courier would be prepared to shoot anyone who attempted to arrest him while he was in possession of the package. The “Hacker” informed CI 2 he would send details of the operation in an encrypted format to the media before the pickup date. If law enforcement conducted a sting on the pickup, the “Hacker” would then provide information to the media to decrypt his prior message. The “Hacker” advised this would make law enforcement look bad by proving that law enforcement knew the potential for violence at a public place before conducting the sting.

But in the new Florida lawsuit, Rigmaiden said he “did not write or send the emails referenced by Defendants” and that they were “sent by someone other than Plaintiff.”

The episode goes on to portray Rigmaiden as describing himself as the “single biggest threat to the US government currently living, and they don’t even know it.”

Again, Rigmaiden wholly denied that he wrote this message.

“If sent at all, the noted email was written and sent by someone other than Plaintiff,” he wrote.

Lawyers for NBCUniversal, who did not respond to Ars’ request for comment, said that what Rigmaiden has primarily asked for—to halt future sales of the episode—is unconstitutional.

“To put it mildly, this case does not even remotely come close to the level of an ‘exceptional’ case worthy of overcoming the presumption of unconstitutionality,” Dana McElroy, one of CNBC’s lawyers, wrote in their motion to dismiss.

“Indeed it has been filed by a convicted felon who admits to pleading guilty to federal crimes and spending nearly six years behind bars, yet he now blames Defendants rather than himself for damaging his reputation, and seeks to restrain them from publishing their report about him.”

For his part, Rigmaiden responded in another filing expressing his displeasure with CNBC’s approach.

“Defendants claim that Plaintiff is trying to ‘escape his past,’ but the so-called ‘past’ referred to by Defendants is a defamatory one that they invented,” he wrote. “If it means higher ratings and increased profits for a multi-billion dollar entertainment network, Defendants argue that the law and common decency go out the window. The editorializing in Defendants’ motion makes clear that they see Plaintiff as discarded trash, a person they can paint in any negative false light they please, merely because he has a conviction on his record. This is morally offensive and will not stand.”