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July 29, 2004
The United States Attorney's Office for the Northern District of California announced that Robert Michael McKimmey pled guilty yesterday to conspiracy to commit theft and downloading of trade secrets, fraud in connection with computers, and interstate transportation of stolen property.
Mr. McKimmey, 44 of Virginia Beach, Virginia was charged by a Criminal Information filed by the U.S. Attorney's Office on April 6, 2004. He was charged with the conspiracy mentioned above in violation of Title 18, United States Code, Sections 1832(a)(5) and 371.
In pleading guilty, Mr. McKimmey admitted to the following (both in a written plea agreement and orally in court):
Business Engine Software Corporation ("BES") is a privately funded company that manufactures, licenses, and provides enterprise application software products and services that allow companies to manage projects, resources, and budgets. It had offices in San Francisco and Ontario, California; Virginia Beach, Virginia; New York, New York; Chicago, Illinois; King of Prussia, Pennsylvania; Belgium; the United Kingdom; and India. Mr. McKimmey was employed by BES as the Chief Technology Officer in its Virginia Beach, Virginia office. He was also a member of BES's Board of Directors and one of BES's equity owners.
Victim Niku Corporation ("Niku") is a publicly traded company that manufactures, licenses, and provides enterprise application software and services for companies to manage and govern their projects, resources, and budgets. Niku has twenty offices in the United States and overseas including its headquarters in Redwood City, California and offices in Petaluma, California; New York, New York; Chicago, Illinois; Atlanta, Georgia; Pittsburgh, Pennsylvania; Lovina, Michigan; Exeter, New Hampshire; the United Kingdom; the Netherlands; France; Germany; and Australia. Niku is one of BES's direct competitors in the enterprise software industry.
Beginning in October of 2001, and continuing to July of 2002, Mr McKimmey conspired and agreed with other BES officers and employees to commit the following offenses: theft and downloading of trade secrets, in violation of 18 U.S.C. §§ 1832(a)(1) and (a)(2); fraud in connection with computers, in violation of 18 U.S.C. § 1030(a)(4); and interstate transportation of stolen property, in violation of 18 U.S.C. § 2314.
As part of the conspiracy, Mr. McKimmey illegally accessed victim Niku's computer network and applications repeatedly over a 10-month period without authorization; stole, downloaded, and copied things of value including Niku trade secrets; and transmitted some of those things of value including Niku trade secrets to other BES officers and employees – all so that BES could maintain a competitive advantage over its direct competitor, Niku.
As part of the plea agreement, Mr. McKimmey agreed to cooperate with the U.S. Attorney's Office in the ongoing investigation of others in connection with this criminal activity.
A sentencing date for Mr. McKimmey has not yet been scheduled. Instead, Mr. McKimmey's case is scheduled for a status conference on December 1, 2004, at 2:30 before U.S. District Judge Phyllis J. Hamilton. The maximum statutory penalty for a violation of 18 U.S.C. §§ 1832(a)(5) and 371 is 10 years imprisonment, and a fine of $250,000 or twice the gross gain or gross loss (whichever is greater), plus restitution. However, the actual sentence will be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of the Court.
The prosecution is the result of an investigation by agents of the FBI's computer intrusion squad which was overseen by the U.S. Attorney's Office's Computer Hacking and Intellectual Property Unit. Criminal Division Chief Ross W. Nadel is the Assistant U.S. Attorney prosecuting the case with the assistance of legal technician Karen Bishop.
A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can. Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov.
ll press inquiries to the U.S. Attorney's Office should be directed to Criminal Chief Ross W. Nadel at (415) 436-6778 or Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.
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