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Story URL: http://software.silicon.com/security/0,39024655,10004830,00.htm

Ex-Microsoft worker arrested for $17m software theft
Ordered it internally and sold it for a tidy profit, suit alleges

By silicon.com

Published: Tuesday 24 June 2003

A former Microsoft employee has been arrested for allegedly ordering more than $17m worth of software via an internal purchasing system and then selling it to keep the proceeds for himself.

Richard Gregg, 43, was also indicted on 62 counts of mail and computer fraud, according to court papers.

Gregg allegedly ordered 5,436 pieces of software worth more than $17m at retail price, which he sold for a profit, according to an investigation by the FBI and US Attorney's Office for the Western District of Washington state.

Gregg, who pleaded not guilty to the charges, was fired from Microsoft in December at the same time when another Microsoft employee was also sacked on suspicion of ordering software and reselling it for a profit.

Microsoft said Gregg, a project coordinator for developing the flagship Windows operating system, was one of the reasons why the company adopted a more stringent antitheft policy late last year.

John Connors, Microsoft's chief financial officer, who also oversees internal administration, said: "When we identified this activity last December, we immediately took several steps to ensure this would not happen again and referred Gregg to law enforcement officials.''

"Since that time, we have been working very closely with the FBI and US Attorney's office on the investigation and have made changes to our internal ordering system to prevent this from happening again,'' he said in a statement.

Microsoft also hired investigators and put in updated systems to crack down on violations of internal policy after Daniel Feussner, a former Microsoft manager, was fired and arrested in December 2002 for allegedly funding a lavish lifestyle by selling discounted software for personal profit. Feussner later died in a local hospital after ingesting antifreeze.

Gregg allegedly ordered software at a deep discount from Microsoft's internal purchasing system from January 2002 to December, according to the indictment.