First Foreign Hacker Is Convicted In The United States Of Hacking Crimes Involving Theft Of Trade Secrets From American Companies

by Orrick - Trade Secrets Group
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A 22-year-old Canadian hacker has been sentenced to federal prison by a Delaware court for engaging in a conspiracy to break into the computer networks of several large gaming companies, to steal trade secret and other information related to unreleased products, and to commit criminal copyright infringement.  According to the Government’s Sentencing Memorandum, David Pokora of Ontario, sentenced last Thursday was “a leading member in an international computer hacking ring . . . that committed numerous unlawful intrusions into the computer networks of various technology companies involved in the $22 billion-dollar video gaming industry.”  The conspiracy’s victims included Microsoft, Epic Games (which develops the highly popular “Gears of War” series), and Activision Blizzard (which published, among many other successful games, “Call of Duty: Modern Warfare 3”).  Pokora and his co-conspirators committed their intrusions by stealing the identities of over ten thousand employees and business partners of the victim companies.  And they stole intellectual property valued by the Government “at over $100 million, but almost certainly exceeding $1 billion.”

Pokora pled guilty in September 2014 to a charge with a maximum prison sentence of five years.  And, while the Government’s precise request is redacted from the Government’s Sentencing Memorandum, it appears that the Government asked for a prison sentence at or near that maximum sentence.

According to the Government, Pokora is “the first foreign hacker to be convicted in the United States of hacking crimes involving the theft of trade secrets from American companies.”  For that reason, Pokora’s sentence “will be important to the United States Government and to organizations of all sizes and types that are struggling to address what has become the top, and continually growing, threat to our national functioning and prosperity.”  The Government emphasized that Pokora’s sentence needed to “promote respect for U.S. computer and intellectual property laws around the globe—the current lack of which is fueling what may be the greatest crime spree in modern history.”

The Government then referenced the Probation Office’s Presentence Investigation Report, which recommended a sentencing range of 108-135 months, and did not dispute any of it.  The Government conceded, however, that Pokora’s sentence needed to be capped at five years.

While Pokora’s sentencing request is not publicly available, it appears from the Government’s reply that Pokora argued for leniency because of his youth, his intelligence and potential, and his strong family.  He claimed that he only profited from the conspiracy to the tune of $50,000.  He also argued that his crimes, which took place almost entirely online, were not “real” to him, but were only a game.  He argued that he has been a long-time gamer, customer, and fan of the hacked companies, and that his internet intrusions were a mere extension of his gaming lifestyle.  Apparently, the court found Pokora’s arguments convincing, because it imposed a sentence of only 18 months in prison.

Although the Government has reported publicly that it is satisfied with the sentencing, it almost certainly hoped for a harsher sentence.  A quick review of this Blog’s recent posts shows that the Government’s concern is real.  Through online theft of intellectual property, the United States is being victimized by what has been called “the greatest transfer of wealth in history.”  It is estimated that dollar losses from intellectual property theft total hundreds of billions per year.  Pokora’s 18-month sentence will not likely do much to impact this crime spree.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick - Trade Secrets Group | Attorney Advertising

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