Before: Auernheimer waves a gun while delivering a “sermon” on his iProphet Blip.tv channel

AT&T’s iPad security breach saga turned into an episode of COPS and the X-Files yesterday with the arrest of a key member of the group that exposed the security flaw.

Andrew Auernheimer, 24, a key member of Goatse Security, was arrested Tuesday after Fayetteville (Ark.) police uncovered drugs while executing a search warrant in his home.  Auernheimer was charged with four felony counts of drug possession and one misdemeanor charge for prescription medication inappropriately in his possession.  Police found cocaine, ecstasy, and LSD, along with controlled substance-designated prescription medication. The authorities generally take the drug addicts and dealers to rehab centers like mission viejo rehab, to make sure they’re not under the influence of drugs at the time of investigation.

Auernheimer is a key figure in Goatse Security’s revelation of a security flaw in AT&T’s systems that allowed more than one hundred thousand e-mail addresses of iPad owners to be disclosed.

He remains in the Washington County Detention Center pending a bail hearing this afternoon.

His arrest came days after AT&T officials said they would pursue prosecution of the hacking group to the fullest extent of the law.  The FBI is reportedly involved in an investigation over the security breach.

Auernheimer is a controversial figure.  The self-styled “prophet” records anti-Semitic video sermons for his iProphet channel on Blip.tv.  A quick and mind-numbing review of the contents included “revelations,” perhaps drug-fueled, that the Jews represent vermin, Christians should be armed, everyone needs to use mescaline, and a consideration of the essential need to obtain temporary tattoos of dogs named Rocket.  On one of his more recent videos, Auernheimer announced he was “fleeing” the Los Angeles area due to “attacks by the Jews.”

After: Auernheimer is now a guest at the Washington County (Ark.) Detention Center, charged with drug offenses

Ironically, one year ago this month, Auernheimer was detained by Portland FBI officials and questioned about threatening phone messages left on the voicemail of Congregation Beth Israel in Portland, Oregon on the night of June 16, 2009.

Before uncovering AT&T’s security lapses, Auernheimer’s online aliases —  “Escher” and “Weev,” made appearances in the media, especially in an August 2008 piece in the NY Times, “The Trolls Among Us.”

Meanwhile, speculation about how AT&T allowed an obvious security flaw to remain open is now narrowing in on recent company layoffs.

Gawker reports AT&T slashed up to 200 employees in its Security Office in March, nearly 20 percent of its staff.  The group kept its layoffs quiet, Gawker’s tipster said, to avoid damaging the image of deep security expertise its sells to businesses.

That a company as profitable as AT&T was willing to slash employees willy-nilly was a point of confusion for Gawker:

The layoffs seem puzzling given that AT&T had just posted profits up 25 percent to $3.1 billion. The profits rose on strong performance in the wireless division, whose association with the iPhone helped it surpass Verizon Wireless in new customer additions. The wireless division continued to add customers and revenue the next quarter, even as a health care charge ate into its profits.

Simple greed could be one explanation. Our source was told upper management intentionally cut CSO payroll and accepted “greater risk in operations” to fatten up company profits and even their own bonuses.

But even more problems cropped up at AT&T when an untested ordering system crashed when customers tried to reserve the latest iPhone.  CNET covered that story:

As the iPhone 4 preorder disaster worsens by the minute, the blame looks to fall squarely on AT&T’s shoulders as we learn more about what went wrong. The most damaging of these may be an source close to the carrier which now claims the system which AT&T was not tested before the launch.

The source works at a third party facility that processes the orders for AT&T. Apparently, the reports of users being able to login to others accounts even though they were attempting to log into their own could be related to a botched update on AT&T’s side related to fraud.