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 Youwill 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.