recommended reading

Feds take kickbacks from outsiders to steal digital intellectual property

Simon Booth/

Nearly one-third of the intellectual property theft at commercial and government organizations in recent years involved collusion between inside employees and outsiders dangling cash, according to an analysis of law enforcement and Verizon data breach cases.

Often a rank-and-file employee will accept a bribe from someone with an outside agenda, Verizon RISK Team researchers said. “The No. 1 thing that we see is that there is a lot of insider activity when we talk about intellectual property,” said Jay Jacobs, managing principal for the team.

Attackers used solicitations and bribes to carry out 28 percent of IP cases documented in 2010 and 2011, a new study found.  The conclusions are based on Verizon’s annual data breach report, which was released this March and summarizes 85 confirmed IP thefts investigated by the Secret Service, various other international law enforcement agencies and Verizon.

The analysis also revealed a lot of overlap between insiders and outsiders stealing IP, Jacobs said. “There are breaches where there are both an internal and external action,” he said. The cases concerned stolen trade secrets, classified data, and copyrighted or trademarked material.

Public administration offices, including federal agencies, and financial services companies accounted for two-thirds of the IP incidents. Most of the victims were located in North America, with some in Asia and Europe.

“All in all, these findings support the notion that adversaries target IP as a shortcut to attaining some manner of strategic, financial, technological or related advantage,” the Verizon researchers wrote.

Bribery was the fourth most common method of IP theft. Abusing access privileges was the most widely used tactic; followed by stealing login credentials; and  “pretexting,” or social engineering, where an outsider tricks an employee into divulging access information. Rounding out the top five strategies for extracting data was embezzlement.

Enforcement was beyond the scope of the data breach report so it is unclear how many government employees were caught or prosecuted.

China is widely believed to steal U.S. government and corporate secrets for economic and military gain. The Office of the Director of National Intelligence and Congress frequently accuse the Chinese government of IP theft, while the nation-state repeatedly denies the allegations. “It’s difficult to characterize the external agents involved (and clients often didn’t seek attribution), but professional criminal rings, activist groups, competitors and state-sponsored actors were identified or suspected,” the researchers stated.

The study noted statistics on the location of attackers could be misleading because hackers often hide their digital footprints. “It is challenging to determine the true location of external adversaries (especially those with higher resources and capabilities),” the researchers wrote. More than half of all the intrusions originated in North America, about one-quarter were from Asia and 15 percent were from Europe.

(Image via Simon Booth/

Threatwatch Alert

Software vulnerability

Malware Has a New Hiding Place: Subtitles

See threatwatch report


Close [ x ] More from Nextgov

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Modernizing IT for Mission Success

    Surveying Federal and Defense Leaders on Priorities and Challenges at the Tactical Edge

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • Effective Ransomware Response

    This whitepaper provides an overview and understanding of ransomware and how to successfully combat it.

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.


When you download a report, your information may be shared with the underwriters of that document.