Net saboteur faces 41 months

NEWARK, N.J. - A long nightmare has come to a close for Omega Engineering. The network administrator who destroyed the company's network is facing 41 months in federal prison, and now - five-and-a-half years after the attack - the company finally is getting back on its feet.

"This closes a chapter for us but we used what happened as a future reference for vigilance," says Jim Ferguson, plant manager of Omega's Bridgeport, N.J., operation, which was nearly crippled by the 1996 attack. "I don't think it's changed the fact that we think of Omega workers as family. It's like being a parent: There are times when you have to be tough and vigilant, and at the same time you have to give enough latitude to allow people to grow and make contributions."

A federal judge in U.S. District Court in Newark, N.J., last week sentenced Timothy Lloyd, 39, of Wilmington, Del., to nearly three-and-a-half years in prison and ordered him to pay more than $2 million in restitution. Lloyd, who worked for Omega for 11 years, was convicted in May 2000 of planting a software time bomb that destroyed the company's manufacturing programs, staggering the high-tech measurement and instrumentation manufacturer. The attack cost the company millions of dollars in damages and ultimately prompted 80 layoffs.

Industry analysts say Lloyd's sentencing is important in sending a message to disgruntled IS workers and in setting case law for the increasing stream of computer crime cases. Since the jury handed down Lloyd's guilty verdict, there have been at least three other insider sabotage cases that have gone to court.

According to numbers from the U.S. Secret Service, which investigated the Lloyd case, insiders are responsible for about 80% of the cases they're now investigating.

"Anytime we can get case law supporting punishment for computer crime, it's important for the industry," says Tim Belcher, CTO of RipTech, a security monitoring and consulting company. "The industry suffers from a lack of case law. And we're going to need this going forward. People are watching."

Lloyd's attorney, Edward Crisonino, says he plans to appeal the sentencing and the verdict.

Omega executives, who testified during the four-week trial, described Lloyd as a longtime trusted employee with access to senior-level management. But as the company grew into a global enterprise, Lloyd started to lose clout, and his frustration with that, executives testified, led to his plot to destroy the network he had created.

Lloyd, who never testified, maintains his innocence. In a statement before the court last week, Lloyd called the charge "false allegations from Omega" and added that the truth never came out during the trial.

Judge William H. Walls, who presided over the trial and the hearing, disagreed.

"The government wishes that you should be punished severely," Walls said in handing down the sentence. "What you did was substantial. What you did was wrong. What you did not only affected the company, but the people who worked there. . . . We need to deter others in this increasingly computerized world and economy."

Ferguson says Omega is still feeling the effects of the attack. He and other Omega executives testified during the trial that the company suffered $10 million in damages and $2 million in reprogramming costs. However, at the sentencing hearing last week, Walls conceded the $2 million in reprogramming costs but said he was unconvinced Omega's $10 million in financial losses could be blamed on the attack because the company didn't start to lose sales until about a year after the system crashed. If the judge had accepted the overall $12 million figure, that would have increased what Lloyd would have owed in restitution and also would have increased his jail time, pushing the sentence closer to the five-year maximum according to federal sentencing guidelines.

Ferguson says the losses were delayed because Omega was able to use up its large store of inventory for months after the crash.

Regardless, Omega executives say the company was knocked off its top position in the measurement and instrumentation market. Only now is it regaining its position.

"We're definitely back on stable footing . . . But if this hadn't happened, it's hard to say where we could have been," says Ferguson, who adds Omega's IS team has implemented new security policies, security tools and multiple back-up systems.

Assistant U.S. Attorney V. Grady O'Malley, who prosecuted the case, told the court during the sentencing hearing, "This was a devious and calculated act . . . that had a catastrophic effect on the company. The government must send a message to systems managers and people in trust that there will be a day of reckoning."

O'Malley later said a big part of that reckoning was the restitution Lloyd was ordered to pay.

"The restitution figure is as significant as the time," O'Malley says. "Not as much significant for Tim Lloyd as for other similarly situated people who have a mind to do what Lloyd did. That might give people pause."