President Of Higher Education Software Provider Pleads Guilty To Conspiring To Hack Into Competitors’ Computer Systems

ALEXANDRIA, Va. – The president and chief executive officer of Virginia-based Symplicity Corporation pleaded guilty today to conspiring to hack into the computer systems of two competitors to improve his company’s software development and sales strategy.

Dana J. Boente, United States Attorney for the Eastern District of Virginia; Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by U.S. District Judge Claude M. Hilton.

Ariel Manuel Friedler, 36, of Arlington, Va., pleaded guilty to conspiracy to access a protected computer without authorization.  Friedler faces a maximum penalty of five years in prison when he is sentenced on August 1, 2014 before U.S. District Judge Anthony J. Trenga.

“We are committed to working with our law enforcement partners to protect American businesses from intellectual property theft, whether the threat comes from an international or domestic source,” said U.S. Attorney Boente.  “This case should send a clear message:  We will aggressively prosecute criminals who attempt to steal confidential business information while hiding behind a cloak of anonymity.”

According to a statement of facts filed with the plea agreement, Symplicity provides student disciplinary records management services to colleges and universities.  Friedler conspired with two other Symplicity employees between 2007 and 2011 to hack into the computer systems of two companies that competed with Symplicity’s business.  Friedler and others decrypted account passwords of former customers, and Friedler hid his IP address using TOR, a network of computers used to encrypt and anonymize online communications.  Friedler then accessed customer contacts and viewed the proprietary and confidential software design and features of competitors Maxient LLC and a second company, identified in court documents as “Company A,” to inform Symplicity’s software development and sales strategy.

“The Department of Justice is committed to protecting the intellectual property and private information of our citizens and businesses from economic espionage,” said Acting Assistant Attorney General O’Neil.  “Hackers who think they can anonymously steal confidential information from competitors’ computer systems should take note: we will investigate you, and we will prosecute you.”

“This was a complex investigation involving senior executive management of the Symplicity Corporation who used sensitive customer login credentials to gain unauthorized access to their competitor’s computer networks,” said FBI Special Agent in Charge Lee.  “These actions caused significant harm to their competitors and ultimately gave Symplicity an unfair business advantage.  Although many victim businesses seek civil remedies in situations like this, reporting breaches of business computer networks to law enforcement is crucial towards combating these types of crimes.”

This case was investigated by the FBI’s Richmond Field Office.  Assistant U.S. Attorney Alexander T.H. Nguyen and Special Assistant U.S. Attorney Peter V. Roman from the Justice Department’s Computer Crime and Intellectual Property Section are prosecuting the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.