Federal authorities on Tuesday charged two men with stealing approximately $1 million in equipment from EMC, as well as a reseller through which the goods were fenced.
According to the Department of Justice allegations, Kevin Kelly, 33, of North Carolina and Mark Rothfuss, 47, of Brockton, Mass., as well as Hanover, Mass.-based
BL Trading were charged -- in three related cases -- with "wire fraud and selling, receiving, or transporting stolen property in interstate commerce." Authorities also charged Kelly with aggravated identity theft.
The Department of Homeland Security's principal investigative arm, Immigration and Customs Enforcement, led the investigation, with assistance from EMC.
Authorities are accusing Kelly of stealing approximately $930,000 worth of equipment from an EMC factory in North Carolina, "by concealing EMC equipment in a small duffle or gym bag as he left work," and then selling the equipment over the Internet, using an associate's identity, without that person's knowledge. According to authorities, "the use of the Internet to fence stolen goods has come to be known as 'e-fencing.'"
Meanwhile, authorities allege that Rothfuss stole roughly $141,000 in equipment between 2007 and 2009 when he worked at EMC call centers in Newton and Waltham, Mass. One of the techniques he allegedly used was requesting more equipment for repairs than he actually required.
Authorities further allege that BL Trading "bought most of Kelly's stolen equipment and that a former BL Trading employee who had primary responsibility for purchasing equipment for its resale business knew or was willfully blind to the fact that Kelly's equipment was stolen."
Upon receipt of the allegedly stolen property, according to the allegations, "BL Trading lawfully used software obtained from EMC to update EMC computer equipment that it was supposed to use only for its EMC-authorized business, but instead used it to update EMC computer equipment for its separate resale business."
Authorities have agreed to dismiss charges against BL Trading after two years, provided the company "cooperates with law enforcement officials, pays restitution, and adheres to a strict corporate compliance program designed to ensure that it does not purchase or sell stolen equipment and does not update used equipment without the manufacturer's agreement," said the Department of Justice.
United States Attorney Carmen M. Ortiz said that authorities are hoping that the compliance program being proposed for BL Trading will become widely adopted. "If accepted by the court, the compliance program announced today will provide a model for online equipment resellers to ensure that their vendors are legitimate," she said.