Threat Management

Man pleads guilty to intellectual property theft conspiracy impacting Microsoft, other firms

Last fall, a group of men was charged with stealing more than $100 million worth of intellectual property and proprietary data from several companies, including Microsoft. Now, the FBI has announced that all four members of the hacking ring have pleaded guilty to their crimes.

Two of the men, Sanadodeh Nesheiwat, 28, and David Pokora, 22, admitted to their involvement in the racket last September, while a third, Nathan Leroux, 20, pleaded guilty the same conspiracy charge in January. According to the FBI, the fourth member of the ring, Austin Alcala, 19, of McCordsville, Ind., pleaded guilty Wednesday to conspiracy to commit computer intrusions and criminal copyright infringement involving theft of data pertaining to the Xbox One gaming console and Xbox Live games.

“Alcala was part of the hacking conspiracy between the spring of 2012 and April 2014,” the FBI release said, citing a statement of facts document filed with Alcala's guilty plea. “During that period, hacking group members located in the United States and abroad gained unauthorized access to computer networks of various companies, including Microsoft Corporation, Epic Games Inc., Valve Corporation and Zombie Studios. The conspirators accessed and stole unreleased software, software source code, trade secrets, copyrighted and pre-release works and other confidential and proprietary information. Members of the conspiracy also stole financial and other sensitive information relating to the companies—but not their customers—and certain employees of such companies.”

Federal investigators estimate that the value of the stolen intellectual property and other data, along with the cost of victim companies' response efforts, ranges between $100 million and $200 million.

Through SQL injection and stolen logins, the men reportedly accessed the systems of targeted companies to steal trade secrets and turn them around for profit. In court, Alcala admitted he was “personally involved in hacking into and stealing login credentials and intellectual property from victim companies including Microsoft and Zombie Studios,” and that, in one instance, he shared a database file containing more than 11,200 login credentials from one targeted company, the FBI said.

Alcala is scheduled to be sentenced in a U.S. District Court in Delaware on July 29. Nesheiwat and Pokora are scheduled to be sentenced later this month, and Leroux in May.

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