For Immediate Release

Contacts:
Paul Vogel, (503) 805-5139, (503) 684-7219
Joseph M. Burton, Duane, Morris & Heckscher LLP, (415) 371-2214

30 August 2001

SAN FRANCISCO, Calif. - After federal charges were brought against his company and one of his employees on Tuesday, Alex Katalov, president of ElcomSoft Co. Ltd., responded saying, "I am saddened by the Justice Department's treatment of my employee and friend, Dmitry Sklyarov. This is a very unfortunate and misguided attempt to enforce the Digital Millennium Copyright Act (DMCA). It appears that the Justice Department is looking for its first test case under the DMCA, but they have mistakenly singled out an individual, simply for developing a program."

Sklyarov was originally arrested at a computer and Internet conference in Las Vegas on July 16th, after he delivered a presentation.

"My top concern is for Dmitry, his future, and that of his young family," Katalov said. "Dmitry has been detained in San Francisco for a month and is unable to return to his home. ElcomSoft did not violate the letter or the intent of the DMCA, which we will prove in due time. Dmitry should not be made some sort of example."

Sklyarov's Attorney, Joseph M. Burton of Duane Morris in San Francisco, said, "The government wants you to think this is about copyright infringement and enforcing the DMCA. It's not." Burton asserted that ElcomSoft and Sklyarov will refute the Justice Department's allegations. "According to the indictment this situation existed for a sum total of 25 days. This hardly would seem to merit criminal prosecution," Burton added.

In their arrest of Dmitry Sklyarov, the government apparently thought they had a rogue cyber-pirate or "hacker." Ironically, ElcomSoft and the government have in the past and continue to work hand-in-hand to fight crime. ElcomSoft Co. Ltd., is a ten-year old company that develops software to recover computer passwords and provide computer security. ElcomSoft also helps identify, trace and shut down hackers, software pirates and cyber-thieves. Their software and consulting services are used in over 80 countries and by U.S law enforcement agencies from the FBI to county sheriffs and local police departments.

The DMCA exists to prosecute those who have no regard for property and intellectual property rights. "ElcomSoft is the exact opposite of those kinds of people," Katalov stated. "We have worked for so long and so closely with law enforcement in this country, you can imagine our surprise that the Justice Department thinks we are criminals. We hope ElcomSoft will have the opportunity to make our case in U.S. courts."

ElcomSoft, (www.elcomsoft.com) is headquartered in Moscow, with approximately 20 employees. Its Password Recovery Kit software is sold and licensed to a majority of Fortune 500 companies and major accounting firm in the U.S., as well as U.S. military, intelligence and law enforcement agencies throughout the country.

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DEFENSE FUND

Alexander Katalov also pointed out that in response to numerous inquiries, a defense fund has been established. Those interested in contributing to Sklyarov's defense fund should make donations by wire to:

First Union National Bank
Philadelphia, PA
ABA #031201467
Account #: 2000104359781
Account Name: Duane, Morris & Heckscher LLP Escrow Account

Contributors MUST reference "The Dmitri Defense Fund - R0247-2" on all incoming wires.

Donations by Check should be sent to the following address:

The Dmitri Defense Fund
c/o Duane, Morris & Heckscher LLP
100 Spear Street, Suite 1500
San Francisco, California 94105
USA

Checks must be payable to "DMH Escrow Agent for Dmitri Defense Fund."