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ITMG Insider Threat Cases – November 2, 2020

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Taiwan Company Pleads Guilty To Trade Secret Theft In Criminal Case Involving PRC State-Owned Company

SAN FRANCISCO – The Department of Justice today announced that United Microelectronics Corporation, Inc. (UMC), a Taiwan semiconductor foundry, pleaded guilty to criminal trade secret theft and was sentenced to pay a $60 million fine, in exchange for its agreement to cooperate with the government in the investigation and prosecution of its co-defendant, a Chinese state-owned-enterprise.  The plea was accepted by the Hon. Maxine M. Chesney, U.S. District Judge. A federal grand jury had indicted UMC in September 2018, along with Fujian Jinhua Integrated Circuit Co., Ltd. (Fujian Jinhua), a state-owned enterprise of the People’s Republic of China (PRC), and three individuals for conspiracy to steal, convey, and possess stolen trade secrets of an American semiconductor company (Micron Technology, Inc. (Micron)) for the benefit of a state-owned enterprise of the PRC (Fujian Jinhua).  As a result of today’s guilty plea, and in accordance with an accompanying plea agreement, UMC, whose American Depository Receipts are publicly traded on the New York Stock Exchange, will pay the fine—the second largest ever in a criminal trade secret prosecution, be subject to a three-year term of probation, and cooperate with the United States.

Man Sentenced for Posing As Covert CIA Officer in Elaborate $4 Million Fraud: Former DEA Public Affairs Officer Scammed Victims by Posing Falsely as Covert CIA Officer Involved in a Highly-classified Intelligence Program

A former Drug Enforcement Administration (DEA) public affairs officer was sentenced today to seven years in prison for defrauding at least a dozen companies of over $4.4 million by posing falsely as a covert officer of the Central Intelligence Agency (CIA). According to court documents, Garrison Kenneth Courtney, 44, of Tampa, Florida, falsely claimed to be a covert officer of the CIA involved in a highly-classified program or “task force” involving various components of the U.S. Intelligence Community and the Department of Defense.  According to the false story told by Courtney, this supposed classified program sought to enhance the intelligence gathering capabilities of the U.S. government. In truth, Courtney had never been employed by the CIA, and the task force that he described did not exist. “The fraud committed by Garrison Courtney harmed the U.S. intelligence community, individual contractors, and private companies working hard to protect our nation,” said Acting Assistant Attorney General Rabbitt.  “By claiming to be a covert CIA officer involved in a bogus classified ‘task force,’ Courtney defrauded his victims out of over $4.4 million.  But his elaborate scheme could have caused far more damage if the Department of Justice and our investigative partners had not successfully intervened.”

Former Trillium Health Employee Charged With Cyberhacking Multiple Co-Workers

ROCHESTER, N.Y. — U.S. Attorney James P. Kennedy, Jr. announced today that Ameer Elashmawy, 28, of Rochester, NY, was charged by criminal complaint with unauthorized access of a protected computer and identity theft. The charges carry a maximum penalty of five years in prison and a $250,000 fine.  Assistant U.S. Attorney Melissa M. Marangola, who is handling the case, stated that according to the complaint, the defendant was an Information Systems Security Support Coordinator at Trillium Health in Rochester, and was responsible for the company’s information system security design and oversight. Elashmawy also assisted employees with their various IT needs as they arose. The defendant had administrative rights and could log onto other employee work accounts, however, he was not allowed to access personal accounts of employees or former employees. On January 6, 2020, after an employee noticed unusual activity on the Trillium Health network and traced the activity to a device located at Elashmawy’s work area, Trillium Health contacted law enforcement and an investigation began into the defendant’s cyber intrusion into co-worker’s accounts. The investigation included a review of three USB thumb drives, an HP laptop computer, two work Dell PCs a hard drive, and two Apple I-phones, and the suspect device. A preliminarily review of the items identified that at least 14 identified victims, all employees from Trillium Health, had their personal accounts (social media, I-cloud, etc.) compromised by Elashmawy. The data reviewed included personal explicit photos and videos of the victims as well as numerous photos of the victim’s driver’s licenses, credit cards, social security cards, and other personal data. During the course of the investigation and continued analysis of computer devices, it was learned that additional employees or former employees of Trillium Health had been victimized by the defendant.

Two Former eBay Employees Plead Guilty to Aggressive Cyberstalking Campaign Targeting Natick Couple

BOSTON – Two former employees of eBay, Inc. pleaded guilty today to their roles in a cyberstalking campaign targeting the editor and publisher of a newsletter that eBay executives viewed as critical of the company. Brian Gilbert, 52, of San Jose, Calif., a former Senior Manager of Special Operations for eBay’s Global Security Team, and Stephanie Stockwell, 26, of Redwood City, Calif., the former manager of eBay’s Global Intelligence Center, pleaded guilty to conspiracy to commit cyberstalking and conspiracy to tamper with witnesses. U.S. District Court Judge William G. Young scheduled sentencing for Stockwell on March 11, 2021, and for Gilbert on May 6, 2021. On Oct. 8, 2020, co-defendants Stephanie Popp, 32, and Veronica Zea, 26, pleaded guilty to the same charges and are scheduled to be sentenced on Feb. 25, 2021. On Oct. 27, 2020, co-conspirator Philip Cooke, 55, pleaded guilty and is scheduled to be sentenced on Feb. 24, 2021. Former eBay executives, James Baugh, 45, and David Harville, 48, were arrested and charged on June 15, 2020. According to the charging documents, the victims of the cyberstalking campaign were a Natick couple who are the editor and publisher of an online newsletter that covers ecommerce companies, including eBay. Members of eBay’s executive leadership team followed the newsletter’s posts, often taking issue with its content and the anonymous comments underneath the editor’s stories.

Chinese Energy Company, U.S. Oil & Gas Affiliate and Chinese National Indicted for Theft of Trade Secrets

A federal grand jury has returned an indictment alleging corporate entities conspired to steal technology from a Houston-area oil & gas manufacturer, announced U.S. Attorney Ryan K. Patrick and Assistant Attorney General John C. Demers of the Department of Justice’s National Security Division. Jason Energy Technologies Co. (JET) in Yantai, People’s Republic of China; Jason Oil and Gas Equipment LLC (JOG) USA and Chinese national Lei Gao aka Jason Gao, 45, are charged with conspiracy, theft of trade secrets and attempted theft of trade secrets. Gao previously resided in Houston but is now believed to be in China. A warrant remains outstanding for his arrest. Also charged in relation to the case is Robert Erford Jr., 41, Dayton, who worked for a Houston-area company. He previously pleaded guilty to conspiracy to commit trade secrets. On or about Nov. 7, 2019, Gao allegedly met with Erford at the JOG offices located in Houston. According to the indictment, Erford signed a consultancy agreement that Gao provided at that time, indicating Erford would work in China as a consultant to assist JOG in coiled tubing technology. Erford was to be $1,000 each day of a 15-day visit, according to the charges.

Three Defendants Tried and Four Defendants Sentenced For Conspiracy To Commit Wire Fraud And Theft Of Government Funds

In November 2019, a federal grand jury returned a far-reaching indictment charging a County Executive Director of the United States Department of Agriculture’s Farm Service Agency with orchestrating a broad-based conspiracy to steal government drought assistance funds and hide the actions through identify theft, tax evasion, and other federal crimes. As a result of this crackdown by U.S. Attorney Keefe’s enhanced Public Trust Unit, 29 individuals were indicted; alleged to have defrauded the federal government, and taxpayers, of hundreds of thousands of dollars. Duane Edward Crawson, 43, of Bonifay, Florida, led the conspiracy that included a former Holmes County Clerk of Court and numerous other individuals who had served in positions of public trust. Between May and December of 2017, while employed as a County Executive Director of the USDA’s Farm Service Agency for Bay, Holmes, and Washington counties, Crawson devised a kickback scheme in which he and his co-conspirators unlawfully obtained approximately $400,534 in taxpayer funds by submitting fraudulent drought assistance claims.

Former Bank Manager Sentenced For Bank Fraud

HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Karen E. Ramm, age 54, of Wormleysburg, Pennsylvania, was sentenced on October 28, 2020, to one year plus one day imprisonment followed by two years of supervised release by Chief United States District Court Judge John E. Jones III, for her role in a bank fraud scheme. Chief Judge Jones also ordered Ramm to pay $102,500 in restitution ($21,668.31 to Commerce Bank and $80,831.69 paid to an insurance company). According to U.S. Attorney David J. Freed, Ramm was a Branch Manager and Loan Officer of Commerce Bank (now known as First National Bank of Pennsylvania, successor to Metro Bank) between 2003 and 2010.  Ramm pled guilty to defrauding Commerce Bank by falsely causing a business loan to be extended based on the representation that the borrower, with whom Ramm was in a personal relationship, needed an extension for a business project, when Ramm knew that was not the case.  The total net loss was $102,500.

Former Office Manager Sentenced To Prison For Defrauding Warner Robins Business Of Nearly $1.4 Million

MACON, Ga. – The former office manager of a computer services company in Warner Robins, Georgia was sentenced to federal prison today for embezzling nearly $1.4 million from the business, forging 419 checks during the nine year scheme, said Charlie Peeler, the U.S. Attorney for the Middle District of Georgia. Sheila Bowden, 52, of Macon, was sentenced to 51 months in prison by U.S. District Judge C. Tripp Self after previously pleading guilty to one count mail fraud. There is no parole in the federal system. Bowden was the office manager for Micro Technology Consultants, Inc. (MTC), a computer services business in Warner Robins. Beginning about March 26, 2009, and continuing through about January 18, 2018, Bowden used her position to embezzle $1,393,869.74 from MTC. She prepared unauthorized checks drawn on MTC’s business account, forging the signature of MTC’s owner on the checks, and making the checks payable to “Petty Cash – Office.” She would then cash two checks at a time payable to “Petty Cash – Office” at a bank branch in Warner Robins. She always came to the bank alone when cashing the checks and would usually receive $50 and $100 bills. She would then use the cash for her own purposes. During the scheme, Bowden forged a total of 419 checks amounting to nearly $1.4 million.

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