[ISN] TX Corporate Hackers Allegedly Steal $150 Million

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http://cbs11tv.com/topstories/local_story_270212100.html

By Robert Riggs
Reporting
Sept 27, 2006

(CBS 11 News) ADDISON Jim Damman thought somebody was looking over his 
shoulder for months. Little did he know that his office had been 
routinely broken into and more than 150-million dollars worth of trade 
secrets were stolen without a visible trace, according to a federal 
lawsuit?

The President of Exel Transportation Services says his suspicion grew so 
strong that he took the unusual step of sweeping the companys Addison 
offices for electronic bugs.

Exel is not a business typically considered a target of corporate spying 
its a shipping broker. Inside its offices, logistic agents sit in front 
of computer terminals with telephones cradled to their ears. Hundreds of 
times a day, they match-up shippers to freight carriers and move loads 
of everything from potatoes to computer chips around the world.

The sweep for bugs yielded nothing. But Damman says a new start-up 
competitor in Plano named Total Transportation Services (TTS) seemed to 
have an uncanny knack of taking away Exels customers.

The competitor was like one step ahead of us but they could not have 
known we were going to see a certain person, Damman says. They could not 
have known what we were going to talk about when we were going to see 
that person, unless they were getting information somewhere. We knew 
something was wrong.

Exel alleges what was wrong in a federal lawsuit filed against Total 
Transportation Services (TTS) and four former Exel executives who went 
to work there.

The lawsuit alleges that a computer forensics investigation discovered a 
conspiracy in which disloyal insiders and former employees hacked into 
Exels computer network to steal trade secrets and that the stolen 
information helped TTS quickly launch its new business.

Matt Yarbrough, a former federal cyber crimes prosecutor, now with the 
Fish & Richardson law firm, represents Exel, This is no different than 
your child cheating off the paper of the child sitting next to them. You 
wouldn't put up with that conduct for your kid. You certainly wouldnt 
want corporate CEO's and executives in American industry doing the same 
thing.

The lawsuit accuses two of the former Exel executives, Mike Musacchio 
and Roy Brown, are accused of installing a backdoor into Exels computer 
system.

An exhibit in the lawsuit features a series of email messages titled You 
will enjoy this that were exchanged between Musacchio and Brown last 
October. Musacchio, who had left Exel a month earlier to set-up TTS, 
asked Brown, who was still working at Exel, ?how are we going to get 
into email after you leave?

Brown left Exel three days later for TTS after replying, Not a problem. 
I have the back door password that only I know and no one else can 
change. Musaccho replied, Beauty!

Yarbrough says the beauty of the alleged scheme was that the backdoor 
was the equivalent of having a secret entrance into the vault for the 
companys crown jewels. Whenever you have super user backdoor into any 
corporate network or enterprise you can do whatever damage you want to 
commit, as much ransacking or taking of that corporate information that 
you want to, Yarbrough said.

The lawsuit alleges that Exels computer network was hacked into almost 
1200 times and that the defendants accessed the email accounts of 65 of 
Exels top ranking employees.

Damman says he feels betrayed, It's a very strange feeling to think that 
somebody has seen everything that you have seen. Everything that you 
have sent. Everything you have received from business people, my boss, 
from customers, from my wife. It's a strange feeling.

A written statement from Thompson & Knight, the Dallas law firm 
defending TTS, says that Musacchio and Brown, Were told in April of this 
year to resign or be fired. They have not been with the company since 
that time. They are not receiving legal assistance from the company. 
This company (TTS) is built on high ethics and excellent service to the 
industry.

TTS admits, in a court filing, that it currently has Exels documents on 
its computer system but doesnt know how those documents were obtained. 
TTS denied all allegations that the company participated in hacking or 
stealing trade secrets.

The attorneys for Musacchio and Brown declined to comment. Brown took 
the 5th Amendment privilege against self incrimination 45-times in 
response to questions in the lawsuit about hacking and stealing Exels 
trade secrets. Musacchio took the 5th Amendment in the lawsuit when 
asked if after leaving he accessed the email accounts of five Exel 
employees, including its president Jim Damman.

The lawsuit alleges that the hackers brazenly created exact replicas of 
Exels documents, such as contracts, budget templates, and spreadsheets, 
for use in connection with TTSs business.

Damman says the looted information included a $300,000 marketing study. 
Its scary its something we all have to watch out for in this electronic 
day and age that we are in. People talk about identity theft all the 
time. This is just a big example.


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