Bo Zhang Pleads Guilty in U.S. District Court in Manhattan to Stealing Software Code From the Federal Reserve Bank of New York

May 29, 2012

Reuters on May 29, 2012 released the following:

“Chinese man pleads guilty to NY Fed cyber theft

By Basil Katz

May 29 (Reuters) – A Chinese computer programmer on Tuesday pleaded guilty to stealing software code from the Federal Reserve Bank of New York.

Bo Zhang, 33, was accused of illegally copying the software code to an external hard drive, according to a criminal complaint filed in U.S. District Court in Manhattan. The charge was made public on Jan. 18.

Authorities said the software, owned by the U.S. Treasury Department, cost about $9.5 million to develop.

“I knowingly stole and converted to my use an item owned by the United States government valued at more than $1,000,” Zhang told U.S. Magistrate Judge Michael Dolinger on Tuesday.

“Specifically, while working at the Federal Reserve Bank of New York, I appropriated proprietary software owned by the United States Department of Treasury for my own personal use,” said Zhang, who is a U.S. permanent resident.

Zhang on Tuesday also pleaded guilty to one charge of immigration fraud. He is currently free on $200,000 bail and is due to be sentenced on Oct. 1.

The code, called the Government-wide Accounting and Reporting Program, was developed to help track the billions of dollars the U.S. government transfers daily. The program provides federal agencies with a statement of their account balance, the court documents said.

Zhang was hired as a contract employee in May 2011 by an unnamed technology consulting company used by the New York Fed to work on its computers, court documents said.

According to an April cooperation agreement with Zhang, Manhattan federal prosecutors recommended he be sentenced to one to 1-1/2 years in prison, much less than the potential 10-year maximum term the theft charge carries.

The case is USA v. Bo Zhang, U.S. District Court for the Southern District of New York, No. 12-0390.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Gupta seeks calls thrown out of U.S. insider trial

May 8, 2012

CNBC on May 8, 2012 released the following:

“NEW YORK (Reuters) – Former Goldman Sachs board member Rajat Gupta, the most prominent corporate figure indicted in a U.S. crackdown on insider trading, has asked a judge to throw out more than two dozen phone conversations that the government has sought to present as evidence at his trial.

Gupta’s lawyers argued in court papers filed Monday night that as many as 26 recorded calls had nothing to do with allegations that Gupta gave inside tips to his onetime friend, convicted Galleon Group hedge fund manager Raj Rajaratnam.

Gupta’s trial starts on May 21 in U.S. District Court in Manhattan. A onetime head of McKinsey & Co, he is accused of giving Rajaratnam secrets of Goldman and Procter & Gamble board meetings in 2007 and 2008. In addition to sitting on the Goldman board, Gupta also was a director at P&G.

Gupta, 63, has denied the charges, which include five counts of securities fraud and one count of conspiracy. He says he lost money investing with Rajaratnam and that as many as four other Goldman personnel could have tipped off Galleon. Gupta could face up to 25 years in prison if convicted of securities fraud.

Rajaratnam is serving an 11-year prison term, the longest sentence handed down for insider trading in the United States, after being convicted in the same court a year ago. Much of the evidence against him was gathered in FBI wiretaps, revealing a network of contacts providing inside information.

“It appears that the government seeks to reprise the Rajaratnam trial in order to shore up its weak circumstantial case against Mr. Gupta, resorting to evidence about other companies and other alleged conspiracies,” Gupta’s lawyers said in the court papers.

They said the calls “likely are extremely prejudicial, likely to focus the jury’s attention on matters outside the indictment.”

A spokeswoman for the office of the Manhattan U.S. Attorney declined to comment. The office’s prosecutions of insider trading at hedge funds in recent years have led to dozens of people either pleading guilty or being convicted at trial.

U.S. District Judge Jed Rakoff will rule on which evidence may be heard by the jury.

A pre-trial hearing is scheduled for May 16.

Prosecutors say Gupta gave Rajaratnam advance knowledge of a $5 billion investment in Goldman by Warren Buffett’s Berkshire Hathaway Inc at the height of the 2008 financial crisis, Goldman’s surprise fourth-quarter 2008 loss, and P&G’s quarterly earnings in late January 2009. Gupta was also charged with providing non-public information about Smucker’s acquisition of Folgers from P&G in 2008.

The case is USA v Gupta, U.S. District Court for the Southern District of New York, No. 11-907.

(Reporting By Grant McCool; Editing by Martha Graybow, Dave Zimmerman)

(This story corrects Gupta’s age to 63 in the 4th paragraph)”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.