Department of Justice

A Preview of the CFAA Arguments in United States v. Nosal, Part II: Could “Phishing” be a Factor?

Oral arguments for the next round in United States v. Nosal have been set for October 20, 2015 at the Ninth Circuit in San Francisco.  So we figured it may be a good time to review both sides’ arguments related to the Computer Fraud and Abuse Act. After doing so, it seems to us that one topic not given any consideration in the briefs, but that may play a role during oral argument is the phenomenon known as phishing schemes, and how such schemes might be compared and contrasted with the scheme alleged in this case. READ MORE

Hacking Your Rivals – Corporate Espionage in Major League Baseball

As we approach the dog days of summer, baseball season is again in full bloom. We previously discussed old-fashioned sign stealing in the context of teams trying to gain a competitive advantage during an actual game. But it appears these hijinks have evolved in today’s electronic world. As the New York Times first reported, the FBI and Department of Justice prosecutors are investigating front-office personnel for the St. Louis Cardinals, one of Major League Baseball’s most beloved franchises, for allegedly infiltrating the internal network of the Houston Astros. READ MORE

Kolon Finally Served With Criminal Summons in Korea, Subsequently Settles for $360 Million

On April 30, 2015, Kolon Industries finally resolved two long-standing disputes regarding its alleged misappropriation of trade secrets related to DuPont Co.’s bullet-proof Kevlar Material.  The settlement resolved a six-year civil dispute with competitor DuPont, as well as an Economic Espionage Act criminal indictment that had been pending for three years.  According to the terms of the plea agreement filed with the court, Kolon will pay $275 million in restitution to DuPont and $85 million to the government in fines. READ MORE

Snowden Strikes Back: Mass Collection of Telephony Metadata Struck Down By the Second Circuit

As post-Snowden America well knows, for some years now the National Security Agency (NSA) has been collecting bulk telephone metadata under the authority of Section 215 of the PATRIOT Act and aggregating it into data banks subject to government query. Under the “business records” provision of this law, the NSA has been collecting all kinds of information about the numbers you dial, how often you dial them, and how long your conversations are—and it’s been doing so for years. READ MORE

First Foreign Hacker Is Convicted In The United States Of Hacking Crimes Involving Theft Of Trade Secrets From American Companies

A 22-year-old Canadian hacker has been sentenced to federal prison by a Delaware court for engaging in a conspiracy to break into the computer networks of several large gaming companies, to steal trade secret and other information related to unreleased products, and to commit criminal copyright infringement.  According to the Government’s Sentencing Memorandum, David Pokora of Ontario, sentenced last Thursday was “a leading member in an international computer hacking ring . . . that committed numerous unlawful intrusions into the computer networks of various technology companies involved in the $22 billion-dollar video gaming industry.”  The conspiracy’s victims included Microsoft, Epic Games (which develops the highly popular “Gears of War” series), and Activision Blizzard (which published, among many other successful games, “Call of Duty: Modern Warfare 3”). READ MORE

Former Aerospace Engineer Pleads Guilty to Misappropriation of Trade Secrets Intended for Iran

Although it appears that the U.S. and Iran are moving closer to a deal regarding Iran’s nuclear program, Iran’s allies appear to remain committed to acquiring military-grade technology from U.S. companies by way of engineers sympathetic to Iran.

According to an FBI press release, a former Pratt & Whitney engineer, Mr. Mozaffar Khazaee of Connecticut, pleaded guilty to violating the Arms Export Control Act by attempting to send to Iran export-controlled trade secrets (such as technical manuals, specification sheets, etc.) relating to jet engines used in the U.S. Air Force’s F35 Joint Strike Fighter program and F-22 Raptor program. He now faces a possible 20 years in prison. The investigation revealed that Mr. Khazaee misappropriated the materials from at least three different defense contractors where he has worked since 2009. Mr. Khazaee is a dual citizen of the U.S. and Iran. READ MORE

Nosal Returns to the Ninth Circuit Posing the Question: Is a Password a Sufficient “Technological Access Barrier” Under the CFAA?

Observers following the legal issues surrounding the prosecution of David Nosal will be watching closely in 2015 as the former Korn Ferry executive returns to the Ninth Circuit to appeal his 2013 conviction on three counts of violating the Computer Fraud and Abuse Act. READ MORE

Justice Hammers International Trade Secrets Hackers

A recent Justice Department reorganization of its National Security Division concentrates resources on fighting state-sponsored economic espionage and corporate theft of trade secrets. These strategic changes focus on Justice’s ability to target and prosecute hackers and others who seek to damage national assets by means including economic espionage, proliferation, and cyber-based national security threats.
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