EMC testing engineer stole nearly $1M of equipment

A former EMC testing engineer has pleaded guilty to charges that he stole about US$930,000 worth of equipment from the company’s Apex, North Carolina, plant.

Kevin Kelly pleaded guilty Thursday to charges of fraud, identity theft and transport of stolen property filed against him by the U.S. Department of Justice in Massachusetts. According to court filings, he sneaked the equipment out of his workplace in a small duffel bag and then sold it on the Internet, using the name of an unwitting associate, identified only as D.B. in court records.

Kelly sold most of the stolen gear to a Hanover, Massachusetts, reseller named BL Trading, prosecutors say. BL Trading has also been charged with sale and receipt of stolen property and wire fraud. That case is still pending.

BL Trading is also accused of installing EMC firmware on equipment that was no longer under the required support contracts, and then putting those systems up for sale. In court filings, prosecutors say that the same BL Trading employee — now deceased — was responsible for both the firmware scam and the purchase of stolen hardware. “The employee knew or was willfully blind to the fact that Kelly had stolen his EMC equipment,” court filings state.

Reached Thursday, BL Trading said that it had “admitted wrongdoing in the matter” and agreed to pay EMC an undisclosed amount in restitution. The company said it has reached an agreement with the government too, and will set up a compliance program to keep track of how it obtains future products. That agreement has not formally been entered in the case or accepted by the judge, however, according to court records.

Most of the illegal activity happened prior to 2006, the company said.

Founded in 1988, BL Trading has more than 4,000 customers worldwide, and is a major parts reseller for EMC’s midrange Clariion networked storage line,according to its website.

Kelly faces maximum penalties of 32 years in prison and a fine of close to $2 million on the charges. He has also agreed to pay back $929,891 to EMC. He is due to be sentenced on April 7. He worked at EMC between 2000 and 2009, prosecutors said.

In a related case, another EMC employee — repair technician Mark Rothfuss — has also been charged with stealing about $140,000 from EMC. “He did so through a variety of ruses, including requesting more equipment from EMC than he needed to perform a repair job and keeping the excess,” prosecutors say in court filings.

Both Rothfuss and Kelly were charged by federal prosecutors last month.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert’s e-mail address is robert_mcmillan@idg.com