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An Australian man who set up an elaborate network of hidden cameras to spy on his flatmates has escaped jail time after police were unable to crack the encryption scheme protecting his computer.

When police raided the residence of Rohan James Wyllie, they found found a series of peepholes drilled into the walls and doors of rooms occupied by his two female and one male flatmates. Wires led to Wyllie's bedroom, and the names of files on his computer were consistent with video footage that would have been recorded onto the hard drive of his computer.

But the files were encrypted, and the 39-year-old Wyllie refused to divulge the password. The inability of police to review the files - combined with the fact that a camera he used was unplugged when the raid was commenced - meant prosecutors lacked the hard evidence they needed to prove the man had secretly taped his flatmates.

Wyllie eventually pleaded guilty in Southport District Court to one count of attempting to visually record a person without consent in a private place. His lawyer said his client suffered from paranoid schizophrenia and believed his mates were conspiring against him.

Given the lack of evidence and the 33 days Wyllie already spent in jail, the judge hearing the case accepted the guilty plea. He sentenced the man to two years of probation.

The legal status of encryption passwords remains unresolved in many parts of the world. There were no press reports suggesting prosecutors in Australia had the authority to compel Wyllie to reveal his code. But a US judge in Vermont earlier this year ordered a child porn suspect to decrypt his hard drive so investigators could inspect its contents.

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