Corporate espionage in the A/V and automation business

The A/V and automation industry is competitive, that's for sure, but according to the Bergen County (N.J.) Prosecutor's Office, the task of marketing said systems gets dirty at times, as well.

The prosecutor's office last week issued a news release (see news release, scroll down to March 28, 2008 entry) that it had arrested a vice president of AMX Corporation for allegedly committing corporate espionage. AMX Corporation, which was acquired by Duchossois Industries in 2005, provides a variety of automation systems and voice/video/networking solutions for building and room controls.

Goldenberg faces charges of "Unlawful Access of a Computer System/Network"; "Unlawful Access of Computer Data/Theft of Data"; and "Conducting an Illegal Wiretap".

The prosecutor's office wrote:

"The arrest stemmed from an investigation concerning the following: The Paramus Police Department received a complaint from a Paramus based corporation known as Sapphire Marketing, who specializes in high-end audio/visual systems. Representatives of Sapphire reported that they were being suspiciously and consistently underbid for contracts by a competitor for whom David Goldenberg works. They expressed suspicion of corporate espionage. Based on anomalies that the complainant noticed within their computer network and more specifically their electronic mail (e-mail) system, they suspected that the company's e-mail system had been compromised and that e-mail was being intercepted. The Paramus Police Department (a member of the Computer Crimes Task Force) and the Bergen County Prosecutor's Office Computer Crimes Unit initiated an investigation.

"The investigation revealed that Mr. Goldenberg had engineered the passwords protecting several of the complainant's e-mail accounts. For a period of time, Mr. Goldenberg was intercepting and reading e-mails that related to potential contracts. Mr. Goldenberg then established a free e-mail account that he had control over, and created an automatic forward of the victim's e-mail so that they would be sent to him directly. This afforded Mr. Goldenberg advanced knowledge of Sapphire's customers and bid prices, thus further affording him an opportunity to underbid Sapphire. Sapphire Marketing estimates the loss in revenue from Mr. Goldenberg's actions to exceed one-million dollars. Mr. Goldenberg was arrested without incident on this date."

According to a press release from AMX (HTML version or PDF version), Goldenberg was initially hired in June 2007 by AMX Corporation to serve as general manager of the company's East Coast offices, overseeing the firm's Northeast and Mid-Atlantic business operations. Goldenberg, according to that June 2007 statement from AMX, had previously worked as a systems integrator in Garden City, N.Y., as president of ACE Communications. His background info lists his involvement of setting up IBM's first virtual private network, and he was listed as a member of the NSCA and the ICIA. He was described in the release as an "aggressive marketer" by AMX's President and CEO Rashid Skaf, and was later promoted to a vice president position.

Skaf issued a statement this morning saying that the company was "surprised and stunned" by the accusations.

"It is the clear and unambiguous policy of AMX that every employee act with the highest moral and ethical standards, and to obey the law in all respects," wrote AMX CEO Rashid Skaf. "We have always stressed fair and honest competition, and in no way do we condone any unethical or unlawful behavior. David has been placed on a leave of absence, effective immediately, while this matter is investigated. Alan Stoddard will be acting in his role until further notice."

AMX public relations manager Kristina Arnold stressed that, "These accusations are being waged against one employee, not the company at large."

Sapphire Marketing, the victim of the alleged corporate espionage committed by Goldenberg, competes in the same A/V, control and automation space according to Marla Suttenberg, owner of Sapphire Marketing. Her company sells products from firms like Crestron Electronics, Polycom, Digital Project, Magenta Research, Cabletime and others.

The arrest was made following an investigation that teamed the Paramus (N.J.) Police Department with the Bergen County Computer Crimes Unit.