December 7, 2021

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Sky ECC provided free cryptophones to a Canadian police force


Sky Global, the Canadian tech company that ran an encrypted phone network at the centre of an international police investigation into organised crime, offered free samples of its encrypted mobile phones to a Canadian police force.

The company’s interactions with the Ontario Provincial Police (OPP) were revealed in a tranche of internal emails and documents filed by Sky Global in a court in the Southern District of California.

Sky Global claims in a legal motion that it was unlawfully targeted by the FBI and other US law enforcement agencies to support investigations into a “small fraction” of its users and third-party resellers that were using the phones for illegal activities.

The company is seeking an order against the US government for the return of 116 internet domains that it claims were unlawfully seized by the FBI and other law enforcement agencies.

It has disclosed internal documents to the court, which it argues show that it took serious precautions to ensure its phones were not used for illegal purposes and that it collaborated with law enforcement agencies.

One email chain shows that a detective sergeant at Ontario Provincial Police approached Sky Global’s encrypted phone operation, Sky ECC, in November 2018 asking someone to contact him about the company’s policies on law enforcement assistance “as a matter of urgency”.

The detective sent a request for further information, a phone and a SIM card to meet an urgent “time crunch” with procurement deadlines.

The emails reveal that Sky offered the Ontario Provincial Police two free phones for testing purposes and offered to supply the police force with customised encrypted phones.

Complaint argues there were no intentional criminal links

Sky Global argues in it court filings that, among other measures, it had reviewed websites and social media posts to ensure that its phones were not being marketed inappropriately, including for criminal purposes.

A spreadsheet of 80 incidents filed in court lists requests to remove a reference to Sky ECC on Instagram because it had an “illegal undertone”, a post on Twitter “linked to criminal activity” and the website of an EncroChat reseller also selling Sky ECC phones.

Most of the incidents in the spreadsheet relate to unauthorised use of Sky Global’s logo on social media services, breaches of branding guidelines and resellers undercutting prices.

They also include links to articles linking Sky ECC to use by criminals and other articles that were disparaging to Sky Global, which were passed on either to “legal” or to Sky Global’s chief operating officer, Alwyn Shu.

One of Sky’s company records refers to the removal of the handle “187ganstersz” from social media for breaching trademark infringement and advertising on criminal networks.

In an email dated November 2019, Shu advised a reseller that Sky Global had revoked distribution privileges from an agent for, among other infringements, being willing to sell Sky ECC services to an individual who wanted to use it for illicit activity.

In May 2020, Sky’s support team received a request from a reseller named “Kaan” in Germany asking the company to urgently wipe the contents of two phones. The reseller wrote: “PLEASE HELP! Two customers have problems with the police. Their devices were confiscated. Please delete two devices and the Sky app.”

The support team sent an email warning that it would decline a customer’s request to remotely wipe a device “that we know is subject to a valid legal investigation”.

The email went on, however: “It should be noted that our software automatically erases all data at least every seven days (fewer, if the user changes their settings) and we are unable to prevent such data from being erased.”

In November 2020, Sky ECC’s support team sent an identical response to a reseller identified as “Pro” after he sent a one-word email: “Police”.

Another reseller, “Kingsman”, received the same reply after emailing Sky support with the request: “Hello Sir, Can you wipe this account, phone is caught by police.”

In June 2019, the company declined to take on a reseller from Montenegro who disclosed that he intended to sell the phones to political parties and criminals. The reseller wrote that he had read that the “police here in Montenegro have a problem with your app, it’s impenetrable”.

In another exchange, a partner identified as “Limitless” filed an activity report to Sky ECC, raising concerns about a potential new reseller. The reseller had made it clear that he intended to distribute Sky ECC software for “illicit” or “criminal activity”, according to the email. “I therefore immediately discontinued the negotiation to become an official reseller,” Limitless wrote.

Sky Global claims US government acted unlawfully

In March 2021, Belgian, French and Dutch police carried out multiple raids on organised crime groups that were using Sky ECC encrypted phones to plan drug deals.

A federal grand jury indicted Sky Global’s CEO, Jean-Francois Eap, and a former phone distributor, Thomas Herdman, for racketeering and facilitating the import and distribution of illegal drugs through the sale of encrypted communications devices.

The Vancouver-based company claims in a motion seeking the return of its internet domains that it has not been charged with any crime and cannot be held criminally liable. The US appears to have taken no action to extradite its CEO to face charges, it said.

The court motion argues that the US government acted unlawfully, causing irreparable damage to the company’s business and operations and the loss of multiple jobs.

Sky Global, which is owned by the Eap Family Trust, was registered in British Columbia by Eap, a Canadian entrepreneur with a background in computer science and the telecommunications industry, in 2010, according to court documents.

It launched its Sky ECC encrypted phone network in 2013 and sold phones through third-party distributors which employed their own resellers and were bound by contracts not to supply phones for illegal use.

Sky Global developed a secure app, Moola, that allows people to buy, store and save gift cards. It also sold a mobile device management console, Sky Work, that allowed companies to control the security settings of mobile devices.



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