Computer sabotage case back in court

PHILADELPHIA - The government battled against defense arguments here Thursday to reinstate a guilty verdict in a case that was the first criminal prosecution of computer sabotage.

The government contends that a District Court judge overstepped legal protocol and "abused his discretion" when interviewing a juror who came forward with a concern after the verdict had been rendered. Based on that, the government maintains the judge incorrectly set aside the jury's guilty verdict and sent the case back to be retried.

The defense, however, argued in front of the three-person appellate panel that the juror had received information outside of the courtroom that could have inappropriately swayed her decision, so the judge was correct in setting aside the verdict.

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Tim Lloyd of Wilmington, Del., was found guilty last spring of planting a software time bomb in a centralized file server at Omega Engineering's Bridgeport, N.J., manufacturing plant. The malicious software code destroyed the programs that ran the company's manufacturing machines, costing Omega more than $10 million in losses, $2 million in reprogramming costs, and eventually leading to 80 layoffs.

But the case was derailed last summer, just a few months after the jury rendered a guilty verdict in a U.S. District Court in Newark, N.J. The Hon. William Walls, who presided over the four-week trial, set aside the decision after a juror who heard the case approached the court with concerns days after the guilty verdict had been handed in.

The juror at issue told the judge she was unsure whether a television news story about the Love Bug computer virus had factored into her verdict, according to Assistant U.S. Attorney Grady O'Malley, who prosecuted the case. "Although she couldn't articulate what impact it had, she simply made the statement that she was unsure about whether it was important to bring to the court's attention," O'Malley says.

Walls, who did not write an opinion on the decision, called the information "prejudicial."

The government appealed the judge's decision to the Third Circuit Court here. The appellate decision only needs a 2-to-1 vote. A written decision is expected in about a month.

O'Malley explained that he appealed the decision based on the issues that the juror did not receive the information improperly, it was not discussed during deliberations, it was not related to the case, and the judge had instructed the jury to base their deliberations solely on evidence presented in trial.

Shawna Yen, assistant U.S. attorney, argued to the appellate court that Judge Walls inappropriately questioned the juror about her reaction to the news of the Love Bug and how it factored into her decision process. She explained that following 606B in the Federal Rules of Evidence, once Walls knew the juror had the Love Bug information, he simply should have reasoned to himself how that information would affect a "hypothetical average" juror.

"The box that shouldn't have been opened, has been opened," Yen says. "The irrelevance of this evidence is what the case turns on."

Edward Crisonino, a Westmont, N.J.-based attorney representing Lloyd, argues, however, that the information about the Love Bug damaged Lloyd's ability to have a fair and impartial trial because it introduced a new theory, one that had not been argued in court, as to how Lloyd could have planted the software time bomb.

The government argued throughout the trial last year that Lloyd, who was interviewing for another job, had set up three test runs of the software time bomb and then planted the final malicious code before he was actually fired. Crisonino argues that since the Love Bug was a computer virus spread via the Internet, the juror could have assumed that the malicious code at Omega had been installed remotely, so it would not have had to been done before Lloyd was terminated.

O'Malley has said if the appeal fails, he will retry the case.

The Lloyd case was the first federal criminal prosecution of computer sabotage. Industry observers hailed the conviction as a precedent-setting victory, proving that the government is capable of tracking down and prosecuting computer crime.

Lloyd has maintained his innocence. "There's no way in the world I did this," he said in an exclusive interview after the verdict was handed down in May.

Since the trial, Lloyd has been working as a machinist. "You have to go through the motions day by day. We learn to live that way. We have to deal," he said before the appellate arguments. "Spiritually, you grow closer as a family when things are tough."

Lloyd also says he is looking forward to the possibility that if the government's appeal fails, it will go back to trial.

"I'm looking forward to it," he says. "This way we can get our side out properly."

Lloyd says the evidence against him is a strange confluence of circumstances, mixed with a good deal of fabrication. He maintains Omega is using him as a scapegoat to cover up the fact that the company had left its network and the programs that fueled its manufacturing unsupervised, unprotected and unmaintained.

He also says the extent of Omega's losses has been greatly exaggerated.

The case stems from a July 31, 1996, incident at Omega, a Stamford, Conn., manufacturer of customized high-tech measurement and instrumentation devices. On that morning, the central file server crashed on bootup, deleting and purging all programs on it. After months of data recovery efforts, the programs are considered a complete loss.

Executives from Omega testified that that company still hasn't been able to fully get back on its feet again, citing the company's inability to offer quick product turnout and customization. "We will never recover," says Jim Ferguson, plant manager at Omega South.

Lloyd, who had worked for Omega for 11 years, created the network that the prosecution said he later destroyed. The government contends that Lloyd, who had long been a trusted employee with access to senior management, began plotting to destroy the programs, and ultimately Omega itself, when he began to lose status and clout as the company grew into a global corporation.

Witnesses for the government went on to say that Lloyd's damaged ego and jealousy eventually took the form of physical intimidation of his co-workers, knowingly running faulty designs to make co-workers look bad and bottlenecking a project because he wasn't in charge of it.

The government contends that Lloyd had plans to leave Omega for another job but was fired first. The prosecution also alleges that before Lloyd was terminated, he left a six-line string of code on the plant's centralized file server. The code was a time bomb designed to go off the first time anyone logged on to the server, which was running Novell's NetWare 3.12 operating system, after July 30, 1996.

If the guilty verdict is re-engaged, Lloyd will face up to five years in federal prison.

In the same trial, Lloyd was acquitted on a second charge of interstate transportation of stolen goods.