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Guilty Plea in Intel Document Theft Case

Prosecutors recommend 6 years in prison for former employee


When Biswamohan Pani decided to leave Intel (NASDAQ:INTC) in 2008, he decided to take more than just the vacation time he felt he was owed.

Last week, Pani agreed to a deal with U.S. Attorney for the District of Massachusetts, Carmen M. Ortiz, under which he pleaded guilty to five counts of theft, IDG News Service reported. Prosecutors alleged that Pani lingered at Intel beyond his official departure date, not to finish using up his accrued vacation time as he claimed at the time, but instead to download and steal critical company documents.

The documents in question contained sensitive information about Intel’s chip designs. Pani, not coincidentally, had resigned to join the company’s rival, Advanced Micro Designs (NYSE:AMD), which competes directly with Intel in computer chip design and manufacturing, IDG reported.

Prosecutors claimed that Pani returned to Intel’s Massachusetts Microprocessor Development center a number of times, illicitly downloading documents from the company’s secure network from a company-provided laptop, IDG said. The documents later were downloaded to an external hard drive. However, prosecutors alleged that he attempted to connect to Intel’s network some days afterward after realizing that he had failed to obtain the necessary requirements to access the documents offline.

Bloomberg said Intel told the government that the information contained in the documents was valued at between $200 million and $400 million.

Pani was indicted in 2008 on charges of theft of trade secrets and wire fraud. In its indictment against Pani, the government said AMD had not requested that Pani steal the documents and apparently had no knowledge of what he had done. Pani stole the documents, the government said, to advance himself at AMD, IDG reported.

Bloomberg noted that Intel had noticed and reported the illicit document downloads and both it had AMD cooperated with the government in its investigation, according to prosecutors.

As part of the plea agreement, the government recommended only a six-year prison sentence for Pani, saying no evidence existed that he had tried to sell the information stolen from Intel. Each of the counts in the indictment carries a maximum 20-year sentence. Pani will be officially sentenced in August.

Article printed from InvestorPlace Media,

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