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Welcome to the LSIS Investigative Journal

Saturday, September 26, 2015

Private Investigators Plead Guilty to Hacking Conspiracies



Courthouse News Service

Shamuses Plead Guilty to Hacking Conspiracies
By NICHOLAS IOVINO

SAN FRANCISCO (CN) - Two private investigators have pleaded guilty to conspiring to hack into the computers, emails and Skype accounts of people that opposed their clients in civil lawsuits.   Nathan Moser, 41, and Peter "Bobby Russo" Siragusa, 59, pleaded guilty to conspiracy, accessing protected computers and obtaining information and intercepting electronic communications. Both men were indicted on federal charges earlier this year.

     The men own private-investigation firms in the Bay Area. Moser owns Moser and Associates in Menlo Park, Calif., while Siragusa heads Siragusa Investigations in nearby Novato.

     In exchange for pleading guilty, agreeing to cooperate with the U.S. Attorney and testifying against co-conspirators, Moser and Siragusa were both assigned a final offense level of 13 and will receive sentences of one to three years and fines of $3,000 to $30,000 under federal sentencing guidelines.  Both men faced a maximum penalty of up to 20 years in prison and $750,000 in fines for the three offenses.  Their co-defendants - alleged hackers Trent Williams, of Martinez, Calif., and Sumit Gupta of Jabalapur, India, and one of Moser's clients, ViSalus' director of security Carlo Pacileo of El Segundo, Calif., still face charges related to the conspiracy.

     Moser said Pacileo hired him to investigate executives working for one of ViSalus' competitors, Ocean Avenue LLC, by obtaining unauthorized access to their computers.   "Pacileo paid for the hacking, either by paying the hackers directly, or by paying me and having me pay the hackers," Moser stated in the July 20 plea agreement.  The "conspiracy members" were paid approximately $38,950 to conduct the illegal activity, according to the plea agreements.

     In 2013, ViSalus filed three lawsuits against Ocean Avenue LLC and former employees that jumped ship to its competitor for allegedly violating non-compete clauses by soliciting Visalus' distributors. 

     Moser and Siragusa said they conspired to hire hackers, including co-defendants Williams and Gupta, to infiltrate the email accounts, Skype accounts and computers of three Ocean Avenue executives.   One of those executives, Kauri Thompson, sued Moser, Pacileo and ViSalus in Utah's Salt Lake County District Court this past March for allegedly stealing trade secrets and engaging in malicious cyber activity. Siragusa also ordered hackers to infiltrate computers belonging to an employee of Santa Clara-based design software company Silvaco to gain an advantage in his client's lawsuit seeking child support and employment benefits, according to the plea agreement.

     Moser and Siragusa entered their guilty pleas in open court on July 20. They will be sentenced on Nov. 2.  Siragusa is represented by Anthony Brass of San Francisco. Moser is represented by Katharine McClure of San Francisco.  Neither the U.S. Attorney's Office nor the men's attorneys returned requests for comment.




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FBI Press Relase

Private Investigators Indicted in E-Mail Hacking Scheme
February 11, 2015

SAN JOSE—Nathan Moser, Peter Siragusa, AKA Bobby Russo, Carlo Pacileo, Trent Williams, and Sumit Gupta, AKA Sumit Vishnoi, were charged with crimes related to a conspiracy to access the e-mail accounts, Skype accounts, and computers of people opposing Moser’s and Siragua’s clients’ in civil lawsuits, announced United States Attorney Melinda Haag and Federal Bureau of Investigation Special Agent in Charge David J. Johnson.

A federal grand jury indicted Moser, 41, of Menlo Park, Calif.; Siragusa, 59, of Novato, Calif.; Pacileo, 44, of El Segundo, Calif.; Williams, 24, of Martinez, Calif.; and Gupta, 26, of Jabalapur, India, on January 15, 2015, charging them with one count of Conspiracy, in violation of 18 U.S.C. § 1030(b), six counts of Accessing a Protected Computer and Obtaining Information, in violation of 18 U.S.C. § 1030(a)(2)(C), and two counts of Interception of Electronic Communications, in violation of 18 U.S.C. § 2511(1)(a). The indictment was unsealed in court in San Jose, Calif., yesterday.

According to the Indictment, Moser was a private investigator and owner of Moser and Associates in Menlo Park. Siragusa was also a private investigator and owner of Siragusa Investigations in Novato. Although Moser and Siragusa operated separate businesses, they often assisted in each other’s investigations. The Indictment further alleges that Williams and Gupta were computer hackers hired by Moser and Siragusa to access the e-mail accounts, Skype accounts, and protected computers of individuals without authorization. Pacileo was the director of security for ViSalus, a network marketing company based in Los Angeles and one of Moser’s clients.

The Indictment alleges that the object of the defendants’ conspiracy was to obtain information that would assist Moser’s and Siragusa’s clients, including Pacileo, in the clients’ lawsuits. According to the indictment, once retained by a client, Moser and Siragusa would hire Williams and Gupta, among others, to hack into the victims’ e-mail accounts, Skype accounts, and protected computers. In addition to that conduct, the defendants allegedly installed and used a keylogger—a tool that intercepts and logs the particular keys struck on a keyboard in a covert manner so that the person using the keyboard is unaware that his or her actions are being monitored—to obtain information that would assist Moser’s and Siragusa’s clients.

According to the Indictment, Ocean Avenue, a network marketing company based in South Jordan, Utah, was a competitor of ViSalus that had hired several former ViSalus employees. As a result, ViSalus initiated a civil lawsuit against Ocean Avenue employees. Pacileo hired Moser to investigate Ocean Avenue. Moser allegedly enlisted Siragusa to assist with the investigation, and together they hired hackers to illegally obtain information to assist in the lawsuit.

Moser, Siragusa, and Williams made their initial appearances in San Jose yesterday before the Honorable Paul S. Grewal, U.S. Magistrate Judge. Moser was released on a $100,000 bond, with his wife signing as surety and custodian. Moser’s next hearing is scheduled for identification of counsel today before Judge Grewal. Siragusa was released pending the filing of a $100,000 secured bond on or before February 20, 2015. His next hearing is scheduled for February 23, 2015, at 1:30 p.m. before the Honorable Edward J. Davila, U.S. District Judge, in San Jose. Williams, who remains in custody, has a detention hearing scheduled for February 13, 2015, at 1:30 p.m., before Judge Grewal.

Pacileo made his initial appearance in Los Angeles before the Honorable Ralph Zarefsky, U.S. Magistrate Judge, and was released pending the filing of a $25,000 secured bond on or before February 13, 2015. His next hearing is scheduled for February 23, 2015 before Judge Davila.

An arrest warrant has been issued by the court for Gupta, who is believed to be in India. FBI Agents in San Jose are working with the FBI office in New Delhi, India, to secure Gupta’s prosecution.

The maximum statutory penalty for a violation of 18 U.S.C. § 1030(b) is five years custody, three years’ supervised release, and a fine of $250,000. The maximum statutory penalty for each violation of 18 U.S.C. § 1030(a)(2)(C) is 10 years custody, three years’ supervised release, and a fine of $250,000. The maximum statutory penalty for each violation of 18 U.S.C. § 2511(1)(a) is five years custody, three years’ supervised release, and a fine of $250,000. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Matt Parrella and Michelle Kane are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elise Etter. The prosecution is the result of an investigation by the FBI.
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