/ 13 January 2007

Guilty plea in Hewlett-Packard spy probe

Federal prosecutors in California scored their first victory in the investigation of Hewlett-Packard’s (HP) ill-fated boardroom spying probe on Friday, when a low-level private investigator pleaded guilty to identity theft and conspiracy charges.

Bryan Wagner (29), of Littleton, Colorado, pleaded guilty to the two felony counts during his initial appearance in a San Jose federal court.

As part of the plea deal, Wagner admitted to obtaining illegally Social Security numbers and other personal information to snoop on the private phone records of journalists, former HP directors and their family members as part of HP’s crusade to ferret out the source of boardroom leaks to the media.

Wagner acknowledged using a form of subterfuge known as ”pretexting”, or pretending to be someone else, to fool telephone companies into coughing up records on former HP directors Tom Perkins and George Keyworth II, and reporters Pui-Wing Tam of the Wall Street Journal and Dawn Kawamoto of CNet’s News.com.

Wagner admitted using the personal information to set up online accounts in the targets’ names between April 2005 and September 2006 to access their call logs and billing records.

His defence lawyer, Stephen Naratil, said his client would testify for the prosecution as it pursues other figures tied to the scandal. He declined to say whom Wagner would testify against or what he had already told prosecutors.

Wagner’s sentencing was set for June 20. There was no sentencing agreement included in the plea deal.

Wagner faces a mandatory minimum prison sentence of two years on the identity-theft charge, and a maximum of five years for conspiracy, but prosecutors can ask the court for a more lenient sentence if they are satisfied with his level of cooperation.

‘Little guy’

Naratil has described his client as the ”little guy” who was tricked by other people higher up in the HP investigation’s chain of command into thinking the investigative methods were legal. Wagner never had any contact with anyone inside HP, he said.

”He was your classic dupe,” Naratil said outside the courthouse. ”It sounds preposterous now, looking back at it all, for him to think that it was legal … But he was assured it was legal. He feels that he was used.”

Luke Macaulay, a spokesperson for the United States Attorney’s Office in San Francisco, said the federal investigation was ongoing but declined to comment on any possible future charges.

Prosecutors allege Wagner was at the bottom of a chain of subcontractors around the US performing the investigation for Palo Alto, California-based HP.

In court, assistant US attorney Mark Krotoski said Wagner was hired by Matthew DePante of the Florida-based Action Research Group to unearth the telephone records and distribute them to other unnamed coconspirators. DePante paid Wagner an unspecified amount and provided him with the Social Security numbers, Krotoski said.

DePante has not been charged in the federal case. A call to his lawyer, Richard Preira of Miami Beach, Florida, was not immediately returned on Friday.

Wagner, Depante and three others were charged in October in state court with four felony counts each of conspiracy, fraud and identity theft for their alleged roles in the HP spying scandal.

The others charged were former HP chairperson Patricia Dunn, who initiated the investigation; former HP ethics chief Kevin Hunsaker, who directed the probe; and Ronald DeLia, a long-time HP security contractor who runs a Boston-area detective firm called Security Outsourcing Solutions.

DeLia was allegedly contracted by HP to perform the leak-probe work and subsequently contracted the work out to DePante’s firm.

All five defendants have pleaded not guilty. Their next appearance in Santa Clara County Superior Court is scheduled for January 17.

It was unclear on Friday what would happen to Wagner’s state charges and whether they would have to be dropped because of the competing federal case.

HP has declined to comment on Wagner’s case because he was not an HP employee. — Sapa-AP