Business Crimes Hotline

Engineer and Manager at Technology Company Guilty of Trade Secret Theft

A former employee of a major wireless communications and technology company was sentenced to three years' probation, a $5000 fine, and 288 hours of community service following his plea of guilty to stealing trade secrets from his former employer in violation of 18 U.S.C. 1832(a)(1), according to the DOJ. The defendant, who was employed in engineering and management positions at the company, reportedly requested and received access to the company's repository for proprietary and confidential source code by falsely claiming that he needed the access to review certain applications. Over the next few months, he downloaded over 400,000 files to his home computer while applying for and accepting a position with a direct competitor in the same field. At his new job, the defendant worked on projects in direct competition with some of the products he illicitly downloaded. There is no evidence that the stolen code was used by or at the competitor company, however, and the competitor cooperated in the investigation. (United States v. Laude, 06cr2147-L, S.D. Ca.).

Colorado

Investment Adviser Indicted For Fraud and Money Laundering

A man holding himself out as an investment advisor was indicted on mail fraud, wire fraud, and money laundering charges related to an investment fund scheme, according to the DOJ. The accused devised a scheme to defraud investors by soliciting them to invest funds into a 'hedge fund.' He purported to operate this fund through a trading company. According to the indictment, the accused claimed that he pooled investors' money to trade in equity securities and options through a predefined trading system. He is alleged to have made fraudulent representations to investors, including that the fund realized annual returns or profits in excess of 40%, that returns for 2005 were projected as reaching 50%, and that the fund earned double-digit returns during both good and bad market conditions. According to the DOJ, at no time was he ever profitable, and no more than half of investors' funds was even transferred to brokerage accounts for use in trading. (United States v. Ferona, 06-cr-00455, D. Co.).

Connecticut

Attorney Guilty of Mail Fraud

A Connecticut attorney plead guilty to mail fraud on a charge stemming from allegations that the attorney knowingly submitted false documents in support of an insurance claim, according to the United States Attorney's Office for the District of Connecticut. The attorney was approached by an undercover FBI agent who was investigating health care fraud and insurance fraud involving the attorney's practice and a local chiropractor. The agent gave the attorney a document that falsely stated that the agent had a claim for lost wages as a result of an automobile accident, and told the attorney that the document was false. Despite knowing it was false, the attorney submitted the document to the agent's insurance company and sought payment for lost wages. (United States v. Corrigan, 07-cr-00002, D. Conn.)

District of Columbia

Director of Accounting for Trade Group Guilty of Embezzling

The former Director of Accounting for a pharmaceutical industry trade group has pled guilty to embezzling $700,000, according to the U.S. Attorney for the District of Columbia. She allegedly accessed the association's accounting system to reroute electronic funds transfers intended for vendors to accounts that she controlled. She is also alleged to have caused two wire transfers to be made into an account she created in the name of a fictitious entity and then altered bank statements to conceal her actions. (United States v. Campbell, 06-cr-00356, D. D.C.).

California

Investigator Guilty of Identity Theft in Pretexting Case

An investigator pleaded guilty to conspiracy and aggravated identity theft in the first conviction resulting from an investigation into allegations that Hewlett-Packard used pretexting in the course of its own investigation into leaks of company information, according to the Assistant U.S. Attorney for Northern California. The defendant pleaded guilty to involvement in a conspiracy to create e-mail accounts to establish online account access for the telephone services of individuals being investigated by the company. He also reportedly admitted to establishing an online telephone service account in the name of a reporter and to fraudulent use of the reporter's Social Security number to access the reporter's personal telephone records. (United States v. Wagner, 07- 00016, N.D. Ca.)

Engineer and Manager at Technology Company Guilty of Trade Secret Theft

A former employee of a major wireless communications and technology company was sentenced to three years' probation, a $5000 fine, and 288 hours of community service following his plea of guilty to stealing trade secrets from his former employer in violation of 18 U.S.C. 1832(a)(1), according to the DOJ. The defendant, who was employed in engineering and management positions at the company, reportedly requested and received access to the company's repository for proprietary and confidential source code by falsely claiming that he needed the access to review certain applications. Over the next few months, he downloaded over 400,000 files to his home computer while applying for and accepting a position with a direct competitor in the same field. At his new job, the defendant worked on projects in direct competition with some of the products he illicitly downloaded. There is no evidence that the stolen code was used by or at the competitor company, however, and the competitor cooperated in the investigation. (United States v. Laude, 06cr2147-L, S.D. Ca.).

Colorado

Investment Adviser Indicted For Fraud and Money Laundering

A man holding himself out as an investment advisor was indicted on mail fraud, wire fraud, and money laundering charges related to an investment fund scheme, according to the DOJ. The accused devised a scheme to defraud investors by soliciting them to invest funds into a 'hedge fund.' He purported to operate this fund through a trading company. According to the indictment, the accused claimed that he pooled investors' money to trade in equity securities and options through a predefined trading system. He is alleged to have made fraudulent representations to investors, including that the fund realized annual returns or profits in excess of 40%, that returns for 2005 were projected as reaching 50%, and that the fund earned double-digit returns during both good and bad market conditions. According to the DOJ, at no time was he ever profitable, and no more than half of investors' funds was even transferred to brokerage accounts for use in trading. (United States v. Ferona, 06-cr-00455, D. Co.).

Connecticut

Attorney Guilty of Mail Fraud

A Connecticut attorney plead guilty to mail fraud on a charge stemming from allegations that the attorney knowingly submitted false documents in support of an insurance claim, according to the United States Attorney's Office for the District of Connecticut. The attorney was approached by an undercover FBI agent who was investigating health care fraud and insurance fraud involving the attorney's practice and a local chiropractor. The agent gave the attorney a document that falsely stated that the agent had a claim for lost wages as a result of an automobile accident, and told the attorney that the document was false. Despite knowing it was false, the attorney submitted the document to the agent's insurance company and sought payment for lost wages. (United States v. Corrigan, 07-cr-00002, D. Conn.)

District of Columbia

Director of Accounting for Trade Group Guilty of Embezzling

The former Director of Accounting for a pharmaceutical industry trade group has pled guilty to embezzling $700,000, according to the U.S. Attorney for the District of Columbia. She allegedly accessed the association's accounting system to reroute electronic funds transfers intended for vendors to accounts that she controlled. She is also alleged to have caused two wire transfers to be made into an account she created in the name of a fictitious entity and then altered bank statements to conceal her actions. (United States v. Campbell, 06-cr-00356, D. D.C.).