Sorry valued customer, an employee just stole your identity

Customer data theft

Source: Mel B

As a freelance writer, I often write for companies around the globe.Here is an article that I wrote for Memento – a leader in enterprise fraud management.

The post discusses the theft of nearly 3,000 customer identities by a bank manager with a very troubled past.

Click here to read the post.

Please feel free to leave comments here, or on Memento’s blog letting me know what you think.

If you would need an article, newsletter, blog post or whitepaper, please contact me at paul@mccormackwrites.com.

P.S. I ghostwrite too!

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Help wanted – willingness to share trade secrets a must

How much do you know about FOAMGLAS? Not much?

Thought so…

If you worked at Pittsburgh Corning’s facility in Sedalia, Missouri, you probably know a lot about FOAMGLAS. Up until recently, Ji Li Huang, and Xiao Guang Qi would have loved to chat with you. In fact, if during that “chat” you agreed to share what you knew about FOAMGLAS, in return you might have ended up $100,000 richer. That’s what the US government alleges at least.

Apparently, Pittsburgh Corning recently made major advances in the formulation and manufacturing process associated with FOAMGLAS. Just so you know, FOAMGLAS is used in liquid natural gas (LNG) tanks.

Which country has the greatest demand for FOAMGLAS? China – it has 10,000 LNG plants.

I’ve discussed the theft of trade secrets numerous times on this blog. What makes this case unique is the fact that Huang and Qi allegedly placed an advertisement in a local newspaper that solicited “technical talent” with experience at the Pittsburgh Corning plant. The advertisement indicated that there was a project lead vacancy associated with the building of a foam glass factory in the Asian market. What they really wanted was information, presumably to launch a competing product. That’s speculation on my part… Coincidentally, Pittsburgh Corning just announced plans to open a facility in China.

Thankfully, the FBI stepped in using an undercover employee from the company. The plan that the undercover employee shared with Huang and Qi involved the employee breaking into the engineering department and stealing equipment related drawings. The FBI helped coordinate the exchange of the documents and the corresponding payment. Huang and Qi are now in custody awaiting court hearings.

Should the allegations noted above result in convictions, it will represent another example of a U.S. based company creating intellectual property that attracts unwanted attention from foreign competitors. From what I can tell so far, Pittsburgh Corning did everything right. How many companies are not so well prepared?

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter or white paper you get an accomplished writer that is also an expert in fraud.

paul@mccormackwrites.com

A billion dollar industry and it ain’t legal (Hint: it used to be a secret)

All is not right with economies in the Western world. The US remains in a malaise while several European economies teeter on the brink of the abyss. The UK just entered a “double dip” recession and as a major trading partner for the US, we’ll surely feel the impact here in the coming months. There are many reasons for the current economic crisis. Without doubt, risk taking on Wall Street and the reckless spending that it helped fuel and support is largely to blame for where we find ourselves today. That’s history. Done. We can’t change it, we can only learn from it.

I am far more concerned with how we move forward. How does the US economy dust itself off and lead the world to better times? If there was a “magic bullet” we would have used it by now. I guess time will tell whether the decisions being made today in both the public and private sector will hurt or help.

One thing I can tell you is that US businesses are making the recovery far more difficult than it needs to be. Don’t believe me? Would you believe Pamela Passman, the president and chief executive officer for The Center for Responsible Enterprise and Trade (CREATe.org)—a Washington-based non-profit industry group focused on responsible business practices?

“Failure to address the challenge of trade secret theft costs industry billions of dollars each year and can have devastating reputational, financial, and legal impacts for individual companies and the global economy as a whole.”

CREATe.org just released a report entitled Trade Secret Theft: Managing the Growing Threat in Supply Chains‘. The report claims that trade secret theft costs industry billions of dollars annually and serves as a critical impediment to innovation, job creation and sustainable economic growth.

What does the US economy need today? How about innovation, job creation, and sustainable economic growth! US companies are literally allowing one element of the solution to the country’s economic woes to slip through their fingers into the hands of foreign competitors – many of which reside in China. Chapter 3 of the CREATe.org report states that “The weak rule of law in many countries makes it all but impossible for multinational corporations to address trade secret theft after the fact”.

Once a trade secret is gone, it is gone for good. No second chances.

Many companies sound concerned, but what are the really doing to combat the threat? Passman states the following,

“Over the past several months, we have engaged with representatives from more than a hundred multinational corporations and have been struck by the deep and pervasive concern over trade secret theft. We heard universal agreement about the need for broader awareness of the challenge and better practices and systems to help address the issue internally and externally with suppliers and business partners,”

Sorry folks, talk is cheap in this situation. In many cases, the companies that “lose” trade secrets have only themselves to blame. This is not a new problem! There is plenty of evidence available from law enforcement and non-profit agencies such as CREATe to show that trade secret theft happens on a regular basis. Goodness knows how many instances are covered up and never hit the business press.

I sincerely hope that CREATe report triggers action. The US is an intellectual property powerhouse but we can’t keep giving the stuff away. In my next post, I’ll highlight some basic steps that companies can take to protect their trade secrets. No magic bullets, but certainly more than many companies have in place right now.

As it relates to intellectual property theft prevention, “the ball” is firmly in the court of US companies. Let’s hope no one steals it before they realize that they have it.

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter or white paper you get an accomplished writer that is also an expert in fraud.

paul@mccormackwrites.com

Have trade secrets, will travel…

We regularly hear from the U.S. government about the theft of intellectual property by Chinese companies and their government. This is just one of several examples that I have reviewed and analyzed in the past week. I am sure that there are many more attempts that go unreported.

In February 2012, Hanjuan Jin, a former software engineer for Motorola, Inc., was found guilty of stealing more than 1,000 electronic and paper documents from Motorola. Jin was caught by U.S. Customs while attempting to catch a one way flight to China. She had worked for Motorola since 1998. Why did she decide to steal Motorola’s trade secrets? Had she stolen intellectual property prior to 2007? We’ll probably never know…

The 2007 theft was not a “spur of the moment” decision. It had been in the planning phases for approximately a year.

In February 2006, Jin took a medical leave of absence. Between November 2006 and January 2007, Jin flew to China and worked for Sun Kaisens, a Chinese telecommunications company that developed products for the Chinese military. Jin had already spent June through November 2006, in China negotiating with Sun Kaisens. While working for Sun Kaisens, Jin was provided access to classified Chinese military documents.

In February 2007, the plan to steal trade secrets from Motorola kicked in to high gear:

  • February 15, Jin returned to the US from China.
  • February 22, she bought a one way ticket back to China.
  • February 23, she notified Motorola she wished to return to work.
  • She went back to work on February 26. Once back on the company’s premise, she accessed large volumes of proprietary documents during normal work hours as well as after hours. She was also observed leaving the building with various documents and possibly a laptop.
  • February 27, she volunteered for a layoff from Motorola.
  • February 28, Jin was caught trying to leave the country with over 1,000 electronic and paper documents belonging to Motorola. She also had a number of documents marked “secret” belonging to the Chinese military.

Interestingly, Jin was found her not guilty of three counts of economic espionage for the benefit of the People’s Republic of China and its military. She faces a maximum penalty of 10 years in prison on each count of stealing trade secrets.

Given Jin’s frequent trips to China, and the fact that the theft had been in the planning phases for 12 months, it is anyone’s guess regarding how much of Motorola’s intellectual property Sun Kaisens or the Chinese government were able to gain direct access to. Since Jin spent time in China prior to the theft attempting to convince Sun Kaisens to employ her, she likely shared information from memory. Also, since Jin had been employed with Motorola since 1998, it is possible that she had taken information over time in the event that a move to China was in her future.

This case underscores why it is important to protect your company’s trade secrets. Ask yourself the following questions:

  • Does your company have trade secrets? Can you list them?
  • How are they used within the business?
  • Where are they stored?
  • What has the company put in place to control and monitor access?
  • How would the company know that an employee is about to steal trade secrets?

There are a number of additional questions involving the alignment of people, processes and technology and the protection of trade secrets, but the questions above should generate sufficient food for thought.

Protecting trade secrets requires a multipronged approach. If there are any gaps in the approach, employees or third parties intent on stealing intellectual property will find them. Don’t believe me? Sanofi-Aventis also has experience dealing with Chinese foreign nationals and the theft of trade secrets. For more on that case, click here.

Arguably, the theft of intellectual property can do more damage to a company than the theft of cash. A company can earn more money to replace the money that was stolen, but once a trade secret is no longer “secret”, the damage is done. Many companies look to the legal system to punish the entity or individual that stole their trade secrets. Certainly, the courts can help. But if your organization cannot demonstrate that it took steps to appropriately protect its trade secrets, the courts may not look too kindly on your claim.

Be proactive! Invest the time and effort to protect your company’s intellectual property. Once your intellectual property is in stolen, you may be a company in name, but in reality, you are a shadow of your former self.

Need a writer that understands fraud? When you hire me to write an article, blog post, newsletter or white paper you get an accomplished writer that is also an expert in fraud.

paul@mccormackwrites.com