Corporate Espionage Doesn’t Pay

Robert LilesForensic Cases In The News

Greed can overtake individuals, and this often comes at the cost of another party. In some cases, a company that spends the time and money on innovations, both tangible and conceptual, may be the victim of corporate espionage wherein a rival company uses the stolen information to profit. All too often this is on account of an employee who steals trade secrets and/or intellectual property and sells them to rivals, or uses this information to build a new business with a competitive advantage.

One company forced into this situation is the powerhouse General Electric, familiarly referred to as GE. The company has a wide reach, diverse corporate portfolio, and offices around the world; its offices in New York’s Capital District around Albany were the site of this breach. The company employed Jean Patrice Delia and Miguel Sernas, the former a then-employee and the latter a former employee, who entered into a “business” partnership with each other—at GE’s expense.

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The two operated as ThermoGen Power Services, which used GE’s stolen trade secrets, marketing information, and pricing among other confidential data specifically for the energy industry. Using the information the men gathered, they were able to leverage GE technology and strategies in an effort to undercut them on projects around the world.

Power plants relied on GE’s expertise on their turbines, and their engineers could improve efficiency enough to lower operating costs. It is here that Delia and Sernas saw a lucrative opportunity.

Progression of Theft

Delia was working in GE’s offices as an engineer. He had just taken a two-year sabbatical to earn a graduate degree in business from 2009 to 2011, and returned to work in the Capital District under a slightly different role. He persuaded an employee in the IT department to get more access to files that he had no reason to see, which allowed him to retrieve proprietary files and information.

Following this action, Delia stole more than 8,000 documents from the company’s systems and put them on a personal computer. Among these files were GE’s cost models and proposals which they used for bids on contracts. One such project involved a power plant in Saudi Arabia in May 2012, which showed ThermoGen’s hand.

An unknown bidder, who turned out to be ThermoGen, undercut GE. It was, however, the base cost for providing work that was peculiar: it was similar to GE’s. In response, GE began researching ThermoGen and traced it to Canada—Delia’s home country. They learned that Delia had indeed incorporated the company there.

Aftermath

GE confronted Delia about the matter, and in response he resigned. It was too late, however, as GE involved the FBI. This in turn launched a major investigation, which included digital forensics to determine what Delia had misappropriated. More damning was Sernas traveling to Europe on business, as he was arrested during his layover and his company computer had GE trade secrets stored on it.

The process took years, but the FBI uncovered evidence with which Delia and Sernas could be prosecuted. Both men were tried and sentenced. In 2019, Sernas was convicted and sentenced to a year in prison and $1.4 million in restitution. Delia faces a $250,000 penalty and up to ten years in prison.

One of the FBI’s special agents, Vin Manglavil, commented that Delia felt highly of himself, thinking “he was the smartest guy in the room.” Perhaps it was this overconfidence and arrogance that led to his downfall.

Digital Forensics

Part of the FBI’s investigation into this matter involved digital forensics. Thanks to expertise and detailed knowledge of retrieving digital assets, the FBI helped bring two criminals to justice and protected GE’s investments in itself, trade secrets, and intellectual property.

While the FBI cannot tackle every case requiring digital forensics services, there are other providers in the private sector that can assist businesses and organizations with their cases by analyzing and retrieving information that may have been compromised.

If you suspect theft and need technical assistance to provide evidence, contact a SecureForensics expert at 1-800-288-1407.