Foreign spies hack computers to bleed billions from industry and steal military secrets. PM explores the dark, relentless scourge of digital espionage.

The first warning that hackers had penetrated the American oil company came soon after the initial breach, in mid-2009. The computer help desk received complaints from employees who were locked out of their accounts or whose computers had already been accessed.

Then the complaints abruptly ceased: the digital spies had obtained an administrator password and were intercepting help-desk tickets, unlocking accounts, and notifying users that their problems had been fixed. With that access, the hackers copied thousands of confidentiale-mails – including those of top executives – and transmitted them to China in massive fi les late at night, after the oil company’s employees had left for the day.

By the time the FBI informed the company of suspicious network traffic a year later, Chinese firms had outbid the oil company on several high-stakes acquisitions by just a few thousand dollars. But it could have been far worse: for months, malware that allowed the hackers to take over terminals had been burrowing deeper into the company’s systems and had wormed its way into computers that controlled oil-drilling and pipeline operations.

Read more in the February 2012 issue of Popular Mechanics - on sale now.