VIRGINIA RESIDENT SENTENCED TO 18 MONTHS IN PRISON FOR INDUSTRIAL ESPIONAGE
Former Employee Stole Proprietary Parts, Designs and Customer Lists
MICHAEL D. CRAIGHEAD, 50, of Roanoke, Virginia, was sentenced today in U.S. District Court in Tacoma to 18 months in prison and three years of supervised release for interstate transportation of stolen goods. CRAIGHEAD is a former employee of Hydraulic Repair and Design (HRD), a company in Puyallup, Washington, that specializes in the repair and re-manufacture of industrial hydraulic components used in excavation equipment. Shortly after CRAIGHEAD turned in his resignation to return to a former employer, the company discovered that he had been stealing parts and company secrets in an attempt to set up a competing company. At sentencing U.S. District Judge Robert J. Bryan told him, “this is a case that calls for hard time.... this was not just a crime of opportunity.” Judge Byran noted that CRAIGHEAD may now be sincere in his remorse, but the Judge said it took too long for him to express that remorse.
According to records filed in the case, CRAIGHEAD went to work for HRD in 2004. In 2007, CRAIGHEAD announced he was leaving HRD to return to a previous employer on the east coast. Just after he announced he was leaving, CRAIGHEAD was caught stealing operation manuals and other items from HRD. The internal investigation uncovered that CRAIGHEAD had stolen approximately $1.3 million in pumps and parts and shipped them to warehouses in Texas and North Carolina. The pumps and parts were ultimately returned to HRD. The investigation revealed that CRAIGHEAD planned to form his own company to compete with HRD, and had discussed the new venture with other HRD employees. CRAIGHEAD was indicted in February 2010, and pleaded guilty August 2, 2010.
Nick Neslund, the President of HRD spoke at the sentencing hearing, telling the court how the thefts had damaged the company, forcing him to lay off employees.
Asking for a significant prison term, Assistant United States Attorney David R. Jennings wrote to the court saying it was “a theft that required boldness, planning, secrecy, and deceit. This was not an impulse offense, nor was it one triggered by temptation or ease. Stealing all these parts
took time and effort. This crime was not a lapse in judgment; it was a studied, careful, considered series of thefts, each one establishing additional moral turpitude on the part of defendant Craighead.”
At the sentencing hearing Mr. Jennings provided a picture to the court showing a warehouse floor filled with boxes of stolen equipment.
The case was investigated by the FBI and prosecuted by Assistant United States Attorney David Reese Jennings.
For additional information, or to obtain a copy of the picture shown in court, please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.