Plano, Texas, Man Convicted In Corporate Hacking Case

DALLAS — A Plano, Texas, resident was convicted this afternoon by a federal jury for conspiring to hack into his former employer’s computer network, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Michael Musacchio, 61, was found guilty of one felony count of conspiracy to make unauthorized access to a protected computer (hacking) and two substantive felony counts of hacking. Each count of conviction carries a maximum statutory penalty of five years in federal prison and a $250,000 fine.

According to the evidence submitted at trial, from 2002 to 2004, Musacchio was the president of Exel Transportation Services, a third party logistics or intermodal transportation company that facilitated links between shippers and common carriers in the manufacturing, retail and consumer industries. In 2004, Musacchio left Exel to form a competing company, Total Transportation Services, where he was the original president and CEO. Two other former Exel employees, Joseph Roy Brown and John Michael Kelly, also went to work at Musacchio’s new company. Trial testimony and exhibits established that between 2004 and 2006, Musacchio, Brown and Kelly engaged in a scheme to hack into Exel’s computer system for the purpose of conducting corporate espionage. Through their repeated unauthorized accesses into Exel’s email accounts, the co-conspirators were able to obtain Exel’s confidential and proprietary business information and use it to benefit themselves and their new employer.

A federal grand jury returned an indictment against the three men on Nov. 2, 2010. Brown and Kelly entered guilty pleas on May 19, 2011, and Aug. 2, 2012, respectively, and are awaiting sentencing. Musacchio is scheduled to be sentenced on June 14, 2013, before U.S. District Judge Jorge A. Solis.

This was the first investigation of hacking for the purpose of corporate espionage that was conducted by the Justice Department’s Computer Crime and Intellectual Property (CCIP) Section, the U.S. Attorney’s Office for the Northern District of Texas and the FBI.

The FBI Dallas Field Office was in charge of the investigation. Assistant U.S. Attorneys Linda Groves and Candina Heath and Trial Attorney Rick Green of the Criminal Division’s CCIP Section prosecuted.