Exec who hacked friends for sales gets probation

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Jun 26, 5:35 PM EDT

Exec who hacked friends for sales gets probation
By VICTOR EPSTEIN
Associated Press Writer

HACKENSACK, N.J. (AP) -- A sales executive who used personal information to guess passwords, hack into e-mail accounts and listen in on conference calls at his friends' companies was sentenced to probation Friday - a punishment the victims said was too lenient.
David Goldenberg, 47, of Oceanside, N.Y., was fined $1,000 and sentenced to three years probation Friday for a single count of felony wiretapping. He initially faced five felony charges but was spared jail time under a plea agreement with New Jersey prosecutors.
The victims estimate he cost them more than $10 million in lost business and security-improvement expenses.
Marla Suttenberg, owner of Woodcliff Lake-based Sapphire Marketing, described the sentence as a slap on the wrist that wouldn't deter others. She said both companies continue to suffer.
"Our business has been changed forever," Suttenberg said. "Customers that used to trust us with information are now afraid to tell us anything for fear of being compromised."
Suttenberg described Goldenberg as a close friend. They attended the ballet together with their spouses and the families exchanged gifts when their children were born, she said. When Goldenberg ran into hard times, she arranged an interview for him with Randy Klein, executive vice president of Crestron Electronics Inc.
Crestron, which is based in Rockleigh, has annual sales of about $400 million and 2,500 employees. It makes touch-screen controllers that automate electronic components in affluent homes and presentation equipment used in corporate boardrooms. Sapphire serves as Crestron's exclusive sales agent in the Northeast.
Goldenberg, however, wound up landing a sales job with Crestron's primary competitor, Richardson, Texas-based AMX Corp.
Crestron began to rapidly lose business to AMX after Goldenberg joined them. Suddenly, the competition seemed to be everywhere, according to Suttenberg. AMX was undercutting Crestron's prices and started showing up at the same trade shows and conferences.
It turned out that Goldenberg, who was rapidly promoted to vice president before his March 2008 arrest, had used his knowledge of her and her family - including pet names and children's birth dates - to guess e-mail passwords.
He read messages between her and Crestron executives several hours each day from July 1, 2007, and March 28, 2008. He even used intercepted information to log into conference calls where market strategies and customer purchases were discussed.
He eventually infiltrated the e-mail accounts of four of Sapphire's 11 employees, Suttenberg said.
An employee caught onto the scam when she discovered all her e-mails were being automatically forwarded to unfamiliar e-mail address.
"We had been suspicious of a leak for some time but this seemed to confirm our suspicions and we quickly brought this information to the authorities attention," Suttenberg said.
Klein said that what bothers him most is that AMX continues to benefit from Goldenberg's illegal activities. Officials at AMX, which no longer employs Goldenberg, did not return phone messages.
"Goldenberg was arrested, but they're still deriving a benefit from his actions," Klein said of AMX. "That intellectual property is the foundation of our company."
Goldenberg apologized for his actions.
"We maintain that there was no financial loss and that no financial loss will be established in any future civil litigation," said defense attorney Dean Schneider.
Craig R. Butterworth, a spokesman for the National White Collar Crime Center, said the biggest threats to intellectual property are not sophisticated spies, but technically savvy everyday Americans.
"Corporate espionage used to be primarily outsiders, now it's mostly done from the inside," said J.D. Leasure, a surveillance countermeasure consultant in Virginia Beach, Va. "The typical case we're dealing with now is an employee, former employee or family member."