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

Intel engineer helps himself to $400 million

Photographer: Stephen McCormack

Intel Corporation is a world-class organization that has dominated the market for computer chips for many years. In fact, there is a high probability that the device you are using to read this post has an Intel chip inside. However, based on a recent case involving Biswamohan Pani, an Intel Senior Staff Engineer, it may need a little help protecting its intellectual property.

According to the FBI, here are the facts of the case:

  • From February through April, 2008, Pani was looking for a job at other computer chip manufacturers and ultimately obtained a job at Advanced Micro Devices Inc.
  • Pani kept his job search secret from Intel. (Why wouldn’t he?)
  • When he announced his departure on May 29, 2008, he told the company that he might work for a hedge fund
  • Pani told Intel that he wanted to take the next one-and-a-half weeks as vacation until his last day at work on June 11, 2008
  • Unbeknownst to Intel, Pani had started downloading from Intel numerous secret documents about Intel’s manufacturing and design of computer chips. The intensive downloads began on May 28, just before he announced his departure, and continued on May 29
  • Pani started working at AMD on June 2, while he was still on Intel’s payroll and still had access to Intel’s computer systems
  • On June 8 and June 10, Pani remotely accessed Intel’s computer system numerous times and downloaded 13 of Intel’s most valuable documents
  • Along with other confidential and proprietary information, Pani downloaded a document explaining how encrypted documents could be reviewed when not connected to Intel’s computer system
  • Pani backed up the downloaded files to an external hard drive for access after he left Intel
  • On June 11, 2008, Pani reported to Intel for his exit interview and falsely stated that he had not retained any of Intel’s property, when, in fact, he had kept the electronic equivalent of boxes full of downloaded documents and some printed Intel documents at his apartment
  • Documents taken by Pani were found a month later when the FBI searched his home. Intel has valued those documents as worth $200-$400 million, at minimum
  • The FBI was able to recover these documents quickly, before Pani could use them to Intel’s disadvantage, largely because Intel reported the theft quickly and assisted the investigation. AMD also cooperated with the investigation, and there was no evidence that AMD or its employees had asked Pani to take these documents or even knew that he had them

Based on the fact pattern above, it appears Pani knew exactly what he was doing. He grabbed documents before, during and after Intel knew that he was leaving. He also bought time by convincing Intel that he was leaving the industry. I can’t imagine that lying about his ultimate destination stopped Intel from blocking his system access. They probably just forgot to do it. After all, Pani was still on the payroll and “burning” his vacation allotment. Why block an active employee?

Who knows what actually took place, the net result was that Pani had one-and-a-half weeks of access to Intel’s systems during which time he did the most damage. So how did Intel figure out Pani had stolen trade secrets? Clearly, after the fact, but not much else has been mentioned in the media.

This case is eerily similar to another case that the FBI investigated involving Sanofi-Aventis. Is it really that easy to steal trade secrets from Fortune 500 companies? Apparently so…

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