In teresting post indeed. I remember the days of Mercs, OCH, Six Feet Under, Mr. Vega$... All you needed was a copy of Ares or Access Diver and a couple of wordlists... a fresh plate of about 1,000-2,000 level 3 or better proxies and you were in business.
There were quite a few sites at the time that had their ccbill.log file available for the entire world to see with some simple exploits (
http://www.yoursite.com/ccbill/ccbill.log) and all you need to do was copy, pste, and throw into JTR and have them decrypted.
I think this guy is going about this the wrong way, and what he is in fact doing is extortion. The governement isn't going to help you though, unfortunately. They want you shut down, so complaining to them is kind of moot IMO.
I'm going to do some research and see what I can come up with on this guy, for the sake of this industry. I still have a couple of acquaintances that are still involved in the underground. I will report back with my findings...