Hacker’s Conviction Affirmed by U.S. Supreme Court

Former Exel Transportation Services (ETS) President Michael Musacchio, an executive who hacked his former employer’s company records to start his own company now has his felony conviction upheld by the US Supreme Court.

The former executive was sentenced to 63 months in prison as a result of his felony and had initially appealed the conviction in May 2013. The charges included:

  • One felony count of conspiracy to make unauthorized access to a protected computer
  • Two felony counts of hacking and breaching his previous employer’s servers.

It was a landmark corporate hacking case, convicting an executive and hacker at the time, with the jury erroneously told of a particular caveat. At the time, the jury was told to find the executive had specifically “agreed to make unauthorized access and exceed unauthorized access,” as opposed to “or” exceeding unauthorized access, according to the Fifth Circuit Court of Appeals. The court rejected Musacchio’s challenges and affirmed the conviction put forth by the lower court in November 2014. Subsequently, the Supreme Court also sided with the circuit court, as reported by Courthouse News Service.

The executive contended that he charges for unauthorized access wasn’t applicable for him because the statue of limitations had expired. He added that he should not be prosecuted on those grounds. However, the Supreme Court rejected that notion, stating that “a defendant thus cannot successfully raise the statue-of-limitations defense…for the first time on appeal.”

Two additional employees, co-workers of Musacchio at his new company who were also former ETS employees plead guilty to corporate hacking counts in 2019. One of them received a two months and one day prison sentence while the other received 12 months probation for the crimes that transpired between 2004 and 2006. ETS also won a $10 million settlement against Musacchio and others accused of corporate cyber espionage.

IN 2013, the Dallas-based Yarbrough Law Group which originally represented Musacchio’s former employers shone light on the inadequacies of cybersecurity law in a case of corporate espionage.

“If we hadn’t filed the civil case, there probably wouldn’t have been a criminal case. It took more than seven years for Mr. Musacchio to be brought to justice in criminal court.

“That’s why companies need to move as quickly as possible to take civil legal action against those who steal company trade secrets and intellectual property.”