DON’T BE A VICTIM OF CORPORATE CRIME—FORM A PLAN
The theft of U.S. trade secrets was costing American companies billions of dollars a year in lost sales when President Bill Clinton signed the Economic Espionage Act into law on Oct. 11, 1996. Although theft of proprietary data and products has been designated a federal criminal offense, it occurs every day, according to John C. Smith, president of the John C. Smith Group High Technology Investigations & Security Consulting of Silicon Valley and Roseville, Calif.
For eight years, Smith served as the senior criminal investigator for the high technology theft/computer crime unit in the Santa Clara County District Attorney’s Office, working high-technology crime in the Silicon Valley. Smith also helped thwart perpetrators of industrial espionage as corporate security manager for Netscape and myCFO; additionally, Smith served as a senior investigator for 3Com.
Smith investigated one case where a disgruntled former employee gained access to the corporate network through a security hole, erased the manufacturing database and made hidden changes in the system, which halted operations for two days.
In another instance, an unscrupulous individual wanted schematics and manufacturing/process information to establish a competing company. He hired an employee from the already existing company as a consultant, who, in turn, brought the needed information to the new company.
There was also the case of the business associate who paid a professional visit to a company, downloaded its entire customer database onto his laptop and sent it to his company in Europe.
One devious employee acquired proprietary documents regarding his employer’s new technology before quitting and obtaining jobs where he used the documents to advance within the new companies.
Particularly in an industry that relies on creative solutions, it’s easy to find manufacturers and distributors along the independent supply channel with their own war stories. Years ago, two “toner salesmen” found wandering around inside the back of Phoenix-based Trade Printers’ production plant turned out to be employees from a competiting company who were checking out Trade Printers’ patented integrated label design. According to Gary Stewart, co-founder and owner, the competitor subsequently launched its own integrated label. Even today, Rick Heinl, president of Repacorp Label Products, Tipp City, Ohio, is currently preparing a legal battle to protect one of his company’s proprietary label products.