One of the cornerstones of Murphy's claims revolve around being busted for "computer crime" and the first to be tried or convicted "as a felon". This has been repeated by Murphy and journalists alike. Examples:
Captain Zap: Ian Murphy, known to his friends as Captain Zap, was the first cracker to be tried and convicted as a felon. Murphy broke into AT&T's computers in 1981 and changed the internal clocks that metered billing rates. People were getting late-night discount rates when they called at midday.
Of course, the bargain-seekers who waited until midnight to call long distance were hit with high bills.
Murphy, now the chairman of IAM/Secure Data System, was the inspiration for the movie "Sneakers." - Michelle Delio for Wired on 2001-02-06
Captain Zap: Ian Murphy, aka "Captain Zap," was the first person convicted of hacking. He and three friends broke into AT&T's computer system and shifted the metering clocks around, so the system charged peak rates at off-peak hours and vice versa. Busted in 1981, he was convicted in 1982, and is credited as the real-life source for the movie "Sneakers." Murphy has since run a security consulting firm, IAM/Secure Data Systems. - Michael Fitzgerald in "Nine Famous Hacks" for ExtremeTech on 2004-01-08
Not only was no "hacking" involved in the charges, but some reports state it was plain old physical theft. According to the Threat Report, the 1981 charge was for theft.
These claims have been debunked as far back as November 19, 1987 in Tolmes News Service (TNS) #13.