Ex-Microsoft employee charged in anti-cybersecurity hack of 1st US company

A former Microsoft employee was indicted Tuesday on federal charges for allegedly working with hackers allegedly backed by Iran in targeting American businesses.

The indictment by a federal grand jury in Alexandria, Va., charges Rajesh Kalia with hacking and obstruction of justice and ends an ongoing investigation into a cybersecurity group affiliated with Iran’s government. He also is accused of stealing thousands of confidential Microsoft documents, according to the indictment.

Kalia and an unidentified co-conspirator used the Turkish name “Deadbolt” to infiltrate email accounts and remotely access Windows-based computers in at least 16 American companies, federal prosecutors say.

Among the American victims were energy companies Shell Oil Co. and Devon Energy Corp.; semiconductor manufacturer Lattice Semiconductor Corp.; and Chicago-based CME Group, a global financial market processor. The indictment does not identify other victims.

The alleged hackers infected the computers with malicious software, in some cases redirecting employees to Iran-based websites, according to court documents.

A court filing accuses Kalia of denying employees access to company servers when they requested information that could compromise their jobs.

The charge of “hacking into a computer to obtain information” can result in federal prison sentences of five years to five years and a $250,000 fine. Computer crime alone carries a statutory maximum of five years in prison and a $250,000 fine.

Kalia’s attorney, Stuart Slotnick, said his client looked forward to fighting the case.

“He asserts his innocence and has instructed his counsel to proceed diligently and to offer a vigorous defense,” Slotnick said in a statement.

Kalia is the second person this year charged with a cyber crime allegedly related to a nonprofit headed by Hadi Tabban, a businessman who has close ties to the Iranian government. Last month, he and his alleged accomplice allegedly paid a hacker to infiltrate the computers of the Western Union company to steal information, prosecutors said.

Prosecutors say Kalia secretly downloaded eight corporate files from Microsoft’s website and that during a search of his laptop at the end of 2014, police found more than 3,800 downloaded Microsoft files.

The indictment also alleges Kalia stole 250 secure Microsoft documents, supposedly for business presentations, from a file system on a company server by exploiting the system’s password mechanism. He then created fake work emails and emails that would appear to come from other people at the company.

“The defendants did this simply to steal information from their victims, knowing that they would be able to do so because those defendants were the targets,” said Richard Spertzel, an FBI official.

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