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Trade Secret/Economic Espionage Cases - U.S. v. Kissane (S.D. N.Y.)

Department of Justice


Trade Secret/Economic Espionage Cases

October 15, 2002

U.S. Department of Justice
United States Attorney
Southern District of New York
U.S. Attorney's Office
Contact: Marvin Smilon
Herbert Hadad
Robert R. Strang
(212) 637-2214


JAMES B. COMEY, the United States Attorney for the Southern District of New York, and KEVIN P. DONOVAN, the Assistant Director in Charge of the FBI’s New York Office, announced that TIMOTHY KISSANE was sentenced today to two years in prison for theft of a trade secret in connection with his prior employment at System Management Arts Incorporated (“SMARTS”), a software company based in White Plains, New York. KISSANE previously pled guilty to an Information on May 14, 2002. According to the Information, KISSANE worked as a release engineer at SMARTS, and was responsible for the packaging of multiple components of the SMARTS software package, including its source code. “Source code” is the underlying computer program that is used to create a software package that can be sold to customers. If a competitor obtained the source code for a software program, it could convert some or all of its features into a its own software. As stated in the Information, SMARTS developed and sold a custom software program called “InCharge”, which monitors large computer networks, and identifies operational problems on the network. SMARTS sold “InCharge” to large telecommunications companies around the country and abroad. “InCharge” is a proprietary computer program, and its source code is a guarded secret. According to the Information, on February 21, 2000, KISSANE signed an employment contract in which he agreed to “forever keep secret” confidential SMARTS information that he had access to, including “software codes.” The Information charged that on November 28, 2001, KISSANE’s employment at SMARTS was terminated. Several weeks later, two of SMARTS’ competitors received email messages from a “Joe Friday” at a Yahoo! email account, offering SMARTS’ source code for sale. According to the Information, one of the email messages stated that the sender possessed the “cvs repository of SMARTS InCharge code, from 11/20/01 as well as custom code for specific bug fixes and customer-requested enhancements.” The competitors brought these email messages to the attention of SMARTS. According to the Information, connections to the Yahoo! email account from which the “Joe Friday” email messages were sent was opened at the White Plains Library, White Plains, New York. As the earlier Complaint charged, this Yahoo! account was then accessed approximately thirty-three additional times in December 2001 from a Verizon DHL Internet account located at the Lavallette, New Jersey address where KISSANE had previously informed SMARTS that he would be living. KISSANE, 41, is a resident of Lavallette, New Jersey. In imposing the 24-month prison term, United States District Judge RICHARD CONWAY CASEY determined that KISSANE’s sentence should reflect his abusing a position of trust at SMARTS. Mr. COMEY praised the FBI’s Computer Hacking and Intellectual Property Squad for its outstanding efforts of this case. He thanked SMARTS for its cooperation during the investigation. Assistant United States Attorney ROBERT R. STRANG is in charge of the prosecution. 02-213


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