FBI: Tech firms face spy risk

democratandchronicle.com


Kexue Huang, a scientist and native of China, pleaded guilty last week in a federal court to swiping millions of dollars worth of trade secrets from Dow Chemical Co. and Cargill Inc. for other people doing research in Germany and China.


A federal jury last month ordered South Korea's Kolon Industries to pay DuPont Co. $920 million for stealing trade secrets regarding synthetic fibers used in such products as Kevlar body armor. A former DuPont engineer hired by Kolon, Michael Mitchell of Virginia, was sentenced in March last year to 18 months in prison for theft of trade secrets for passing on key DuPont data to Kolon.

And area technology companies are likely fooling themselves if they think they're not in the cross-hairs of such spy efforts, according to the Federal Bureau of Investigation. "If you haven't been a victim yet, it's because you have been and you don't know it, or you will be," Barry W. Couch, a special agent with FBI's Buffalo division, told a conference room full of area optics industry executives last week. "Don't be blindsided."

Chili's Sydor Optics played host as the FBI spent a handful of hours talking about counterintelligence and economic espionage issues, with handouts and a video presentation all revolving around the message that companies are under siege by foreign economic competitors, often with explicit help from foreign governments.

Optics in particular "is a targeted industry," said FBI special agent Chad Kaestle. Other frequently targeted technologies include sensors, aeronautics and marine systems.

Former Akamai employee pleads guilty in espionage case

masshightech.com



A Brookline man who worked in the finance department at Akamai Technologies Inc. has pleaded guilty to foreign economic espionage as part of an agreement with the U.S. Attorney’s Office in Boston.



According to U.S. Attorney Carmen M. Ortiz, Elliot Doxer, 43, pleaded guilty before U.S. District Judge Denise J. Casper to one count of economic espionage for providing trade secrets to an undercover federal agent posing as an Israeli intelligence officer. According to Ortiz, this was only the eighth prosecution in the U.S. under the charge of foreign economic espionage.



As part of the plea agreement, a charge of wire fraud was dismissed. Doxer, facing a maximum sentence of 15 years in prison, will be sentenced on Nov. 30.



Doxer stipulated to a statement of fact that in 2006 he emailed the Israeli consulate in Boston saying that as an employee in Akamai’s finance department he was willing to provide information that might help Israel, and later saying that he wanted to help “our homeland in our war against our enemies.



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FBI warns businesses to protect their trade secrets and information

standard.net

KAYSVILLE -- Companies and individuals need to protect their trade secrets and financial information the way Kentucky Fried Chicken protects its secret recipe of 11 herbs and spices, FBI officials warn.

FBI Special Agent Karl Schmae and FBI Financial Analyst Shane Esplin, from the Salt Lake City office, shared tips with the Davis Chamber of Commerce on Tuesday to help business owners protect themselves from becoming victims of a white-collar crime.

About 30 people attended the presentation titled "Economic Espionage: Trade Secrets Under Attack." The presentation was made at the NorthFront Business Resource Center in Kaysville.

The FBI has a broad mission that includes "economic espionage" and the impact it has on businesses, Schmae said.

Some of that espionage includes the stealing of trade secrets and claims ranging anywhere from the design of America's space shuttle being stolen by Russians, to New England Patriots Football Coach Bill Belichick spying on other NFL teams, Schmae said.

But in the world of economics, it is every company for itself, and it is the responsibility of each company to protect its trade secrets, research or marketing information -- all that separates them from their competitors, Schmae said.

Trade secrets have to be identified, Schmae said, and "reasonable measures" taken to protect them, including educating staff that any information they glean by working for the company cannot be shared.

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Security Report: Stealing ATM PINs with thermal cameras

nakedsecurity.sophos.com

At the USENIX Security Symposium last week, researchers Keaton Mowery, Sarah Meiklejohn and Stefan Savage from the University of California at San Diego presented their paper "Heat of the Moment: Characterizing the Efficacy of Thermal Camera-Based Attacks."

Inspired by previous research on safecracking by Michał Zalewski, they thought it would be easier for a criminal to snoop on ATM PINs using a thermal (infrared) camera to detect residual heat from keypresses rather than current techniques using traditional video cameras.

Thermal imaging provides several advantages. Unlike with traditional cameras, visually masking the PIN pad does not defeat the attack, and the ability to automate PIN harvesting using computer software further simplifies the task.

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Computer lab’s Chinese-made parts raise spy concerns

washingtontimes.com

A U.S. supercomputer laboratory engaged in classified military research concluded a recent dealinvolving Chinese-made components that is raising concerns in Congress about potential electronic espionage.

The concerns are based on a contract reached this summer between a computer-technology firm and the National Center for Computational Engineering at the University of Tennessee, whose supercomputers simulate flight tests for next-generation U.S. military aircraft and spacecraft, and simulate submarine warfare for the Navy.

The storage system for the contract calls for using software from U.S. cybersecurity firm Symantec installed over devices made by Huawei Technologies, a Chinese telecommunications giant that U.S. officials have said has close ties to China’s military. Huawei and Symantec formed a joint venture in 2008, with Huawei owning 51 percent of the shares of the enterprise.

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Former Akamai employee in Mass. to plead guilty to economic espionage

washingtonpost.com

BOSTON — A former employee of a website content delivery company has agreed to plead guilty to a charge of foreign economic espionage for providing company trade secrets to an undercover FBI agent posing as an Israeli intelligence officer, federal prosecutors announced Thursday.

Elliot Doxer, 42, will admit to providing trade secrets from Cambridge-based Akamai Technologies Inc. over an 18-month period to the agent, whom he believed was an Israeli spy, the U.S. Attorney’s Office for Massachusetts said in a statement. A plea hearing is scheduled for Aug. 29.

Doxer’s attorney, Thomas J. Butters, did not return messages left after business hours Thursday.

Doxer, of Brookline, worked in Akamai’s finance department at the time he committed the alleged offenses. Prosecutors said he sent an email to the Israeli consulate in June 2006 and offered to provide any information he had access to in order to help that country in exchange for $3,000. Doxer said his main goal was “to help our homeland and our war against our enemies,” prosecutors said.

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Insider Data Theft Costs Bank of America $10 Million

pcworld.com
A Bank of America insider who sold customer data to criminals cost the bank at least US$10 million in losses.

Bank of America began notifying customers of the incident recently, but is not providing many details of the case which is still under investigation. The theft, "involved a now former associate who provided customer information to people outside the bank, who then used the information to commit fraud against our customers," said Bank of America spokeswoman Colleen Haggerty, in an email message.

The bank lost at least $10 million to the criminals, said James Kollar, a special agent with U.S. Secret Service in Los Angeles. "There was information that was coming from the bank to the outsiders," he said. "It was basically a check scam."

About 95 members of the loosely affiliated criminal gang behind the alleged fraud, including the bank employee, were swept up in a February 2011 law enforcement action, Kollar said. However, the names of the accused have not been released, and the court case is under seal as the investigation continues.

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10 Most Notorious Acts of Corporate Espionage

businesspundit.com
There’s no end to the skullduggery that businesses will get involved in with the aim of making a quick buck, or trying to keep up with their competitors. Of course, their fellow companies aren’t beyond their schemes, either. There’s a war going on out there, folks, and spying is part of the game – criminal or not. Corporate espionage was a normal way of doing business back in days gone by, before copyright and patent protection brought the long arm of the law into play, but some companies still engage in the practice of acquiring trade secrets and business information by any means necessary. Here are 10 infamous cases of industrial espionage.

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Millions of Sony Playstation users hit by massive data theft

telegraph.co.uk
Sensitive personal details of tens of millions of internet users have been stolen by hackers in one of the biggest ever cases of data theft, it has emerged.

Fraudsters have obtained data on millions of online video gamers – including three million Britons - after targeting Sony’s PlayStation Network.

The electronics giant is contacting around 70 million customers warning that details including their names, addresses, dates of birth, passwords and security questions have been stolen.

Sony also admitted that the hackers may have gained access to people’s credit card details.

The network provides online video gaming services and allows streaming of films and music via the internet.

It requires members to submit credit card and personal details to subscribe.

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Corporate spying goes unreported

investors.com

SANTA MONICA, Calif. (MarketWatch) — International industrial espionage is on the rise as cyber criminals shift their activities to stealing trade secrets from taking personal data and information.

A new research report from McAfee, the Internet security firm, says, “Globalization and the commoditization of information technology have driven businesses to store increasing amounts of precious corporate data in the cloud. As this shift has taken place, cyber criminals have discovered new ways to target this precious data, both from inside and outside the organization.”

The report, “Underground Economies: Intellectual Capital and Sensitive Corporate Data Now the Latest Cybercrime Currency,” also says many companies are reluctant to thoroughly investigate cyber breaches for fear of publicity and because investigations are costly.

Companies worldwide are estimated to lose more than $1 trillion due to data leaks, costs of remediation and reputational damage.

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'Corporate espionage' center of court case

bizjournals.com

A State Supreme Court Justice has barred a national appliance parts distributor from soliciting business and clients from a competitor, who happens to have deep Buffalo roots.

State Supreme Court Justice John Michalek, in a recently unsealed decision, has ruled that 1st Source Servall, which opened a Buffalo sales office shortly after St. Louis-based Marcone Supply Co. acquired AP Wagner Co. in January 2010. AP Wagner began in Buffalo in 1928 when it was founded as Buffalo Washing Machine Repair Co. Marcone and 1st Source Servall are the largest appliance parts distributors in the country.

Read more: 'Corporate espionage' center of court case | Business First

Government cyber-crime report just sales puffery

techwatch.co.uk

You might recall that last week, consultant firm Detica produced a report on the overall cost of cyber-crime in the UK, in conjunction with the government Office of Cyber Security.

The damage of which was calculated to be £27 billion per year lopped off the British economy, a rather staggering figure to claim. Of course, it’s very difficult to quantify these sort of measurements.

A professor from the London School of Economics was certainly unimpressed with this estimation, and pointed out an interesting fact – that Detica is owned by BAE Systems, and the whole report was a “sales promotion exercise” on behalf of the latter.

Peter Sommer told ComputerWeekly: “The whole report has been orientated to areas in which BAE can offer its facilities and services.”

He noted that entire swathes of cyber-crime offences were discarded by the report, with child pornography perhaps the biggest problem area which was ignored.

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Spies at Work Know Where to Find Your Secrets

bloomberg.com

“A mental health specialist recommended that the Army private accused of leaking classified material to the anti-secrecy website WikiLeaks not be deployed to Iraq, but his immediate commanders sent him anyway.”

That’s according to the Washington Post, which noted that the soldier, Bradley Manning, was allegedly storing classified material on an unclassified server, had been demoted for assault, and was acting so erratically that his master sergeant disabled his weapon. So why did this man have a security clearance, and what was he doing in a war zone with access to State Department cables unrelated to his job?

Before you call the Army stupid and forget it, why does your mailroom clerk have unrestricted access to everything on your company’s server, including corporate secrets, or your clients’ merger plans and bid data? And why was a Ford Motor Co. engineer allegedly able to steal thousands of sensitive documents that had nothing to do with his job? Poor information security isn’t just a government problem.

Economic espionage is intensifying. The foreign intelligence services of China, Russia, Iran and other countries are after our technology, and most of what they want is in the electronic-information systems of private companies -- and the law and accounting firms that work for them.

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Leaked Apple secrets lead to arrests

wavy.com

iPhone secrets among tips that led to arrests

Updated: Friday, 17 Dec 2010, 8:29 AM EST
Published : Friday, 17 Dec 2010, 8:28 AM EST

• TOM HAYS,Associated Press

NEW YORK (AP) - Federal prosecutors in Manhattan broadened their insider trading crackdown Thursday, arresting four people on charges alleging that so-called "expert consultants" revealed secrets about Apple Inc.'s iPhone and other technology products to hedge funds seeking a trading edge on quarterly earnings reports.

The latest probe targeted Primary Global Research, a Mountain View, Calif.-based firm that offered consulting services to investors on industry trends, issues and regulations. Instead, prosecutors allege, firm executive James Fleishman used four consultants employed by publicly traded companies to create a corrupt clearinghouse for confidential information.

Fleishman, 41, was charged with wire fraud and conspiracy. Three others, all outside "expert consultants" for Primary Global Research until earlier this year, were charged with wire fraud and conspiracy to commit securities fraud and wire fraud, according to papers filed in federal court in Manhattan.

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U.S. Companies Are at Risk of Spying by Their Own Workers

nytimes.com
Huang Kexue, federal authorities say, is a new kind of spy.
For five years, Mr. Huang was a scientist at a Dow Chemical lab in Indiana, studying ways to improve insecticides. But before he was fired in 2008, Mr. Huang began sharing Dow’s secrets with Chinese researchers, authorities say, then obtained grants from a state-run foundation in China with the goal of starting a rival business there.

Now, Mr. Huang, who was born in China and is a legal United States resident, faces a rare criminal charge — that he engaged in economic espionage on China’s behalf.

Law enforcement officials say the kind of spying Mr. Huang is accused of represents a new front in the battle for a global economic edge. As China and other countries broaden their efforts to obtain Western technology, American industries beyond the traditional military and high-tech targets risk having valuable secrets exposed by their own employees, court records show.

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Former Con Man Helps Feds Thwart Alleged ATM Hacking Spree

wired.com

A North Carolina grocery worker is being held without bail in Houston on attempted computer hacking charges after inadvertently partnering with an undercover FBI agent in an alleged citywide ATM-reprogramming caper.

Thor Alexander Morris, 19, was arrested at a Houston flea market last month after trying a default administrative passcode on a Tranax Mini-Bank ATM there, according to the FBI. Morris, who was wearing a wig to disguise his appearance, allegedly hoped to reprogram the machine to think it was loaded with $1 bills instead of $20 bills. That would let him pull $8,000 in cash with $400 in withdrawals from a prepaid debit card.

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Hilton Worldwide execs accused of corporate espionage

bizjournals.com

Starwood Hotels & Resorts Worldwide Inc. has accused Hilton Worldwide' chief executive officer, Christopher Nassetta, of playing a role in an alleged case of corporate espionage, according to The Wall Street Journal.

Starwood filed a lawsuit last April, against Hilton, alleging that two top executives stole confidential and proprietary information used to launch Hilton into the lifestyle-hotel market. The suit specifically claimed that Ross Klein, global head of Hilton Luxury and Lifestyle Brands, and Amar Lalvani, global head of Hilton Luxury and Lifestyle Brand Development, pilfered more than 100,000 electronic files from Starwood when they were recruited to Hilton in June 2008.

The Journal reported Friday that Starwood has now filed an amended complaint in U.S. District Court in White Plains, N.Y., claiming that Hilton's misconduct reached the highest levels of the McLean-based chain's management, including CEO Nassetta, and its head of global development, Steven Goldman. The complaint says that the alleged theft was condoned by at least five of the 10 members of Hilton's executive committee.

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Corporate espionage case moves forward

pasadenastarnews.com

HACIENDA HEIGHTS - A federal judge has upheld most of a local company's counter-lawsuit against Seiko Epson that claims the printing giant used a spy to gain trade secrets while illegally cracking down on the local firm's right to sell recycled products.

The ruling was a victory for two-year-old Hacienda Heights-based Green Project, a 13-employee company that recycles and sells used ink and toner cartridges.

In July, the firm alleged in U.S. District Court in Oregon that Seiko Epson sent an investigator named Herbert W. Seitz, who trespassed into its Hacienda Heights headquarters and used a false identity to obtain price lists and other information from Green Project's sales department.

Green Project's lawsuit was a response to Seiko Epson's original suit in April, claiming that Green Project and several similar firms infringed on their copyrights.

For Judge Anna H. Brown, the issue centered around whether Green Project had taken reasonable measures to protect what the firms says were vital "trade secrets."

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China sends Rio espionage case to prosecutors

cnbc.com
Chinese authorities have referred the Rio Tinto commercial espionage case to the Shanghai People's Procuratorate (prosecutor) to decide whether the case will be brought to court, said Australia's Department of Foreign Affairs & Trade on Monday.

Chinese prosecutors will have about a month to decide whether the case should go on trial, or they could refer it back to the police if they feel there is insufficient proof for a prosecution.

Four Rio staff have been under Chinese custody since July after China accused them of illegally obtaining commercial secrets.

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Devine sues former employee over espionage claims

news.com.au

TWO of Queensland's biggest construction firms have been drawn into a legal battle involving allegations of commercial espionage, fraud and embezzlement of more than $500,000.

Devine Industries Pty Ltd is suing the former personal assistant of founding director David Devine in the Supreme Court for $570,000.

Mr Devine accuses Gissel Alves of leaking corporate secrets to the Queensland head of Leighton Properties, with whom he alleges she shared an "intimate personal relationship".

Last month Mr Devine lodged an affidavit accusing his secretary of more than 10 years of embezzling money by altering cheques and making fraudulent claims for travel, accommodation and other expenses.

Mr Devine also claimed in the court documents that Leighton Properties state manager Andrew Borger was the recipient of hundreds of emails from Ms Alves undermining him and the company. "During the course of their relationship, Ms Alves had sent a large number of emails to Mr Borger disclosing, and attaching, highly confidential information and documents," his affidavit claimed.

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