HP VP Charged with IBM Espionage

By John Hazard  |  Posted 2008-07-02 Print this article Print

A former Hewlett-Packard vice president who had previously worked at IBM was charged June 27 with trade-secret theft for spiriting away IBM pricing info and distributing to his HP superiors.

Atul Malhotra, a vice president in HP's Imaging and Printing Group, was charged in U.S. District Court in San Jose, Calif. He was fired in September when HP said it discovered the crime and forwarded the evidence to authorities.

His attorney told the San Jose Mercury News that Malhotra has agreed to plead guilty or no contest to the charges.

Malhotra was the director of sales and business development and Output Management Services for IBM Global Services, a.k.a. director of Global printer sales from 1997 to April 2006. As head of a team that essentially developed IPG's printer bids and sales, Malhotra had access to documents such as an internal memo titled "IBM Global Services, CC Calibration Metrics," that authorities claim he requested in March 2006, just a few weeks before he left Big Blue for HP.

According to the complaint filed by the U.S. Attorney's Office, the memo was marked "IBM Confidential" on each page and an IBM pricing coordinator warned him against distributing. Nonetheless, Malhotra allegedly sent the memo in an e-mail July 26, 2006 to an HP senior vice president with the subject line "For Your Eyes Only." He allegedly did it again in an e-mail to another HP SVP two days later.

HP gets to play good citizen here, telling David Kravets of Wired's Threat level blog, "HP detected this activity, conducted an internal investigation, terminated Malhotra from his employment and self-reported the activity to all appropriate enforcement agencies and to IBM. HP has cooperated fully with the government's investigation."

Malhotra's attorney, John Vandevelde, told the San Jose Mercury News' Brandon Bailey his client is "an honorable man with an impeccable history" who "made one mistake in transitioning from one high-tech job to another."

He faces up to 10 years in prison and a $250,000 fine, but a plea could lead to a lesser sentence.

del.icio.us | digg.com

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel