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Wednesday, April 1, 2015

Fourth Member of International Computer Hacking Ring Pleads Guilty to Hacking and Intellectual Property Theft Conspiracy

All Four Members Charged Have Now Pleaded Guilty

A fourth member of an international computer hacking ring has pleaded guilty to conspiring to break into computer networks of prominent technology companies to steal more than $100 million in intellectual property and other proprietary data. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Charles M. Oberly III of the District of Delaware and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Division made the announcement.

Austin Alcala, 19, of McCordsville, Indiana, pleaded guilty to conspiracy to commit computer intrusions and criminal copyright infringement based on his role in the cyber theft of software and data related to the Xbox One gaming console and Xbox Live online gaming system, and popular games such as the “FIFA” online soccer series; “Call of Duty:  Modern Warfare 3;” and “Gears of War 3.”  A sentencing hearing is set before U.S. District Judge Gregory M. Sleet of the District of Delaware on July 29, 2015.

According to the statement of facts filed in connection with his guilty plea, Alcala was part of the hacking conspiracy between the spring of 2012 and April 2014.  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. 

Specifically, the data theft targeted software development networks containing source code, technical specifications and related information for Microsoft’s then-unreleased Xbox One gaming console, as well as intellectual property and proprietary data related to Xbox Live and games developed for that online gaming system.

Alcala admitted in court that he was personally involved in hacking into and stealing log-in credentials and intellectual property from victim companies including Microsoft and Zombie Studios.  Alcala further admitted that, on one occasion, he transmitted to co-conspirators a database file containing approximately 11,266 log-in credentials stolen from a victim company. 

The value of the intellectual property and other data stolen by the hacking ring, as well as the costs associated with the victims’ responses to the conduct, is estimated to range between $100 million and $200 million.  To date, the United States has seized over $620,000 in cash and other proceeds related to the charged conduct.

Sanadodeh Nesheiwat, 28, of Washington, New Jersey, and David Pokora, 22, of Mississauga, Ontario, Canada, previously pleaded guilty to the same conspiracy charge on Sept. 30, 2014.  They remain in custody pending their sentencing hearings, which are scheduled for April 2015.  Nathan Leroux, 20, of Bowie, Maryland, pleaded guilty to the same conspiracy charge on Jan. 20, 2015, and remains in custody pending his sentencing hearing scheduled for May 2015.

This case is being investigated by the FBI, with assistance from the Criminal Division’s Office of International Affairs, the U.S. Department of Homeland Security’s Homeland Security Investigations and Customs and Border Protection, the U.S. Postal Inspection Service, the Canada Border Services Agency, the Western Australia Police and the Peel Regional Police of Ontario, Canada.  The case is being prosecuted by Deputy Chief for Litigation James Silver of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware.

Press Release Number: 
Updated April 1, 2015