Blue Lance InfoSec Blog

Former Stens employee sentenced in computer intrusion

This post updates a previous post on this case.

According to a December 22nd press release from the FBI's Indianapolis office:

Joseph H. Hogsett, United States Attorney, announced today that Walter D. Puckett, 40, of Williamstown, Kentucky, was sentenced to three years of probation by U.S. District Chief Judge Richard L. Young after his guilty plea to computer intrusion. This case was the result of a lengthy investigation by the Federal Bureau of Investigation.

Puckett admitted that he accessed the computer system of the Stens Corporation, based in Jasper, Indiana, from various places on numerous occasions without authorization. Puckett further admitted that the computer intrusions were performed for the purpose of gaining commercial advantage and personal financial benefit. Puckett was employed by a competitor of Stens when he accessed the Stens’ computer system.

According to Assistant U.S. Attorney Todd S. Shellenbarger, who prosecuted the case for the government, Judge Young also ordered Puckett to serve the first 300 days of his probation term in a work release center. Puckett was also ordered to make restitution in the amount of $72,481 to Stens.

 

Former Goldman Sachs programmer found guilty on theft of trade secrets charges

According to the New York office of the FBI, Sergey Aleynikov, a former computer programmer at Goldman Sachs was found guilty last week by a jury in Manhattan federal court.  Aleynikov had been charged with theft of trade secrets and transportation of stolen property in interstate and foreign commerce, stemming from the theft of computer code from the high frequency trading software of Goldman Sachs.

According to the press release:

From May 2007 to June 2009, ALEYNIKOV was employed at Goldman Sachs as a computer programmer responsible for developing computer programs supporting the firm's high-frequency trading on various commodities and equities markets. Goldman Sachs had obtained the high-frequency trading system in 1999, when it acquired Hull Trading Company, the previous owners of the system, for approximately $500 million. Since acquiring the system, Goldman Sachs modified and maintained the system, and took significant measures to protect the confidentiality of the system's computer programs, including firewalls to limit access to the firm's computer network, and limiting internal access to the high-frequency trading program. Goldman Sachs' high frequency trading system generates millions of dollars per year in profits for the firm. Goldman Sachs takes several measures to protect the system's source code, including requiring all Goldman employees to agree to a confidentiality agreement.

In April 2009, ALEYNIKOV resigned from Goldman Sachs and accepted a job at Teza Technologies ("Teza"), a newly-formed company in Chicago, Illinois. He was hired to develop Teza's own version of a computer platform that would allow Teza to engage in high-frequency trading. His last day of employment at Goldman Sachs was June 5, 2009.

Beginning at approximately 5:20 p.m. on June 5, 2009—his last day working at Goldman Sachs—ALEYNIKOV, from his desk at Goldman Sachs, transferred substantial portions of Goldman Sachs' proprietary computer code for its trading platform to an outside computer server in Germany. He encrypted the files and transferred them over the Internet without informing Goldman Sachs. After transferring the files, he deleted the program he used to encrypt the files and deleted his computer's "bash history," which records the most recent commands executed on his computer.

In addition, throughout his employment at Goldman Sachs, ALEYNIKOV transferred thousands of computer code files related to the firm's proprietary trading program from the firm's computers to his home computers, without the knowledge or authorization of Goldman Sachs. He did this by e-mailing the code files from his Goldman Sachs e-mail account to his personal e-mail account, and storing versions of the code files on his home computers, laptop computer, a flash drive, and other storage devices.

On July 2, 2009, ALEYNIKOV flew to Chicago, Illinois, to attend meetings at Teza's offices, bringing with him his laptop computer and another storage device, each of which contained Goldman Sachs's proprietary source code. He was arrested on July 3, 2009, as he arrived at Newark Airport following that visit.

Aleynikov faces a penalty of up to 15 years in prison and is scheduled to be sentenced on March 18, 2011.

 

Read the press release

 

Former Valspar Chemist Sentenced to 15 Months for Stealing up to $20 Million in Trade Secrets

David Yen Lee, a former technical director for Valspar, was sentenced this week to 15 months in prison for stealing an estimated $20 million in trade secrets after accepting a position with a competitor.  Lee pleaded guilty in September to charges that he used his credentials on Valspar's secure network to access and download data including chemical formulas, sales and cost data, product research and marketing data.

According to the Chicago Office of the FBI:

Lee admitted that between September 2008 and February 2009, he had negotiated employment with Nippon Paint, located in Shanghai, China. On Feb. 27, 2009, Lee accepted employment with Nippon as vice president of technology and administrator of research and development beginning on April 1, 2009, in Shanghai. Lee was scheduled to fly from Chicago to Shanghai on March 27, 2009. He did not inform Valspar that he had accepted a job at Nippon until he resigned on March 16, 2009.

At Valspar, Lee’s duties included scouting new paint technologies, coordinating with other paint laboratories, coordinating staffing and projects with Huarun Limited, a Valspar subsidiary located in China, and overseeing Valspar’s technical service group, which conducted experiments for paint coloring.

Between November 2008 and March 2009, Lee downloaded technical documents and materials belonging to Valspar, including the paint formula batch tickets. He further copied certain downloaded files to external thumb drives to store the data, knowing that he intended to use the confidential information belong to Valspar for his own benefit. The total value of the trade secret information Lee took was estimated at between $7 million and $20 million. There was no evidence that he actually disclosed any of the stolen trade secrets.

In addition, Lee has been ordered to pay $30,975 in restitution to cover the expenses of Valspar's internal investigation.

 

Read the press release