Employee arrested for theft of trade secrets from Machine Zone, Inc

http://www.justice.gov/usao-ndca/pr/silicon-valley-employee-arrested-theft-trade-secrets

by gdeglin • 11 years ago

26 21 11 years ago

octaveguin• 11 years ago

The thing most concerning here is that it seems like the employee never used the 'trade secret'. He just downloaded the source code - code, presumably, he wrote.

And of course that this is criminal, not civil.

Scary.

mirashii• 11 years ago

If you take the time to read even the first page of the affidavit, you'll see that it's not source code that he took, it was business analytics information from Tableau.

The thing most concerning here is that it seems like the employee never used the 'trade secret'

I don't see why this is so concerning. Most justice systems try to prevent the damages that a crime will commit even if the act is stopped. That's why attempted murder is a crime which you can be charged for.

Rainymood• 11 years ago

code, presumably, he wrote

Just to note (as far as I know) the code you write doesn't necessarily mean that it's code you own. If you write some awesome ass code for school for example the school can claim copyright or some sorts. He wrote the code while working for Machine, so they presumably own the code.

Please correct me if I'm wrong.

leereeves2• 11 years ago

In the US, something made by an employee within the scope of his or her employment is a work made for hire and the employer owns the copyright.

Non-employees could also agree to a contract transferring copyright or, in some limited circumstances, agreeing the work is a work made for hire.

But I'm fairly sure that you're wrong about things you write for school, unless you're an employee of the school or you signed something transferring copyright.

trhway2• 11 years ago

the affidavit (http://www.justice.gov/usao-ndca/file/763991/download) is basically a boring and bad-divorce-ugly saga how a Director (not "employee") lost the office battle and was stupid/careless enough to mention having some Tableau analytics (the company's proprietary info by definition) downloaded and in his possession in the course of the severance discussion recorded by FBI. I don't think he would be that careless if the info was really valuable and he intended to profit from it, ie. if he really "stole" it and valued it. It sounds pretty plausible that he used it only to understand the value of his options. Making enemies and giving them the opening to bring in FBI seems to be his main sin here. Now they also incriminate him wiping out his laptop before returning. I wonder has anybody here returned company laptops (upon leaving or upgrade) without nuking it? I mean i do access my bank and other accounts from the laptop ...

humanrebar• 11 years ago

I'm not a lawyer, but this sounds like extortion to me. As in, "It would be awful if your business caught fire and burnt to the ground after I left the company...."

Theft of trade secrets is severe, but I'm always dissatisfied to see criminal charges for hurting someone's business model. In this case, there is more despicable behavior that is not being explicitly prosecuted.

trhway2• 11 years ago

I don't argue here - allowing any connection, implicit or explicit, between return of proprietary stuff and severance immediately creates impression of extortion and puts the one into very vulnerable position, and this is why doing it, even unintentionally, is a stupidity or carelesness at best.

Jare• 11 years ago

This article http://www.gamesindustry.biz/articles/2015-08-26-another-day... refers to Zeng attempting to use the info to negotiate better severance, which if true is basically blackmail. The article also links to other (possibly unrelated) post on MachineZone's recent clash (heh) with Kabam.

ChuckMcM• 11 years ago

Generally a really really bad way to negotiate severance. Not as bad as changing all the passwords on the company routers and then holding them hostage but pretty sad.

halviti4• 11 years ago

You're missing some important points:

- He is confirmed to have accessed a whole bunch of stuff he had no business accessing leading up to being let go.

- He wiped his laptop and moved sensitive company data BACK to the laptop from an external device after having wiped it

Many people wipe their laptops.. most people don't try to make it look like they didn't wipe their laptops, and when they're called out try to use the external drives as leverage for a better severance package.

The degree to what he was up to is definitely up for debate, but no doubt in my mind this dude fucked up several times.

x0x0• 11 years ago

I read the transcript and wow this brings back bad memories of a former boss.

edited by me for clarity:

   17 June: Zeng proposes to Orsini that Zeng make a new team.  Orsini says no.
   
   2 July: Zeng chats Orsini, "[...] just to confirm I will start [at new team]
   on August 1st".  Orsini tells Zeng there is no job requisition [at new team]
   
   7 July: Zeng's supervisor tells team that Machine Zone wants to limit # of
   employees for the year.  Zeng messages Orsini and asks if that will affect his
   new position.  Orsini says they will not be creating a new position.

   next day: Zeng goes to HR and says he thought there was an agreement with
   Orsini for a new position.

even after it is finally made clear to Zeng that there is no new position / new team for him, he then wanted his options to vest early!

I worked with a manager like this. He just willfully ignored you telling him answers he didn't want to hear or didn't like. Until I finally quit, it was the worst 7 months of my career. Zeng seems to be the same.

mc8084• 11 years ago

I've never heard of the "Special Prosecutions and National Security Unit", but it doesn't sound like something that should care about some online game's analytics data. Combined with the guy being arrested as he was about to leave for China, I can't help wondering if there is much, much more to this story. E.g. they felt a need to hold him for something, and this was the best they could come up with.

leereeves2• 11 years ago

According to http://www.justice.gov/usao-ndca/divisions

The Special Prosecutions and National Security Unit is responsible for supporting counterterrorism and counterespionage investigations and prosecutions in the district. In addition, the Special Prosecutions and National Security Unit prosecutes public corruption, environmental, civil rights, child exploitation, illegal export, and immigration cases.

eblume• 11 years ago

So this could fall under their jurisdiction with 'illegal export'?

halviti4• 11 years ago

I always enjoy entertaining conspiracy theories, but in reality if you have a problem employee and evidence of them downloading your company's important info, and have legitimate concerns that they are going to take it elsewhere, would you not call the authorities/FBI?

Regardless, if you want to know the whole story, you can read the affidavit from the link which contains literally all of the details of exactly how this played out.

tl;dr - there's really not much more to the story, the summary is exactly what happened.

mc8084• 11 years ago

I'm not sure who I would call first, but if it led me to the FBI then I would probably expect the Computer Hacking and Intellectual Property Unit (from leereeves link) to do the investigation/prosecution. It also seems odd that the FBI would respond so thoroughly on such a short notice, as if they had already been communicating with the company, although that could just be because he was about to leave the country.

Employee arrested for theft of trade secrets from Machine Zone, Inc

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