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Tuesday, June 25, 2024 | Back issues
Courthouse News Service Courthouse News Service

Client-Swiping Sends Headhunter to Prison

SAN FRANCISCO (CN) - Executive headhunter David Nosal faces one year and a day in prison for swiping trade secrets from his former employer, a federal judge ruled.

A grand jury originally indicted Nosal in 2008 for trade-secret theft, mail fraud and conspiracy and computer intrusion - hacking - under the Computer Fraud and Abuse Act. Prosecutors alleged that Nosal had former co-workers at the executive-search firm Korn/Ferry log onto a confidential database and mine it for new clients for his competing business.

U.S. District Judge Marilyn Patel threw out the hacking charges, and an en banc panel of the 9th Circuit upheld that decision in 2012.

The appellate court agreed the Justice Department's reading of the anti-hacking law had been overbroad, and that the statute was not meant to punish the misappropriation of trade secrets.

A federal jury convicted Nosal, 56, of the remaining charges last year. He faced up to 15 years in prison and $500,000 in fines.

U.S. District Judge Edward Chen handed down the 366-day sentence Thursday.

In addition to prison time, Nosal must pay a $60,000 fine. After release, he faces three years' probation and must perform 400 hours of community service.

A hearing for restitution is set for Feb. 12.

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