PITTSBURGH (CN) – A cyber-intelligence company and its CEO sued the author of the book “The Devil Inside the Beltway,” claiming it falsely accused them of assisting “abusive government shakedowns” through “government-funded data mining & surveillance.”
Tiversa Holding Corp. and its co-founder and CEO Robert Boback sued LabMD Inc. and its CEO/author Michael J. Daugherty, in Federal Court.
Daugherty’s book is slated for publication on Sept. 17, by (nonparty) Broadland Press. Advance material published on the Internet identifies Daugherty as the CEO of LabMD.
“Tiversa is a cyber-intelligence company that provides, inter alia, data protection and review for individuals, corporate entities, and government agencies,” Boback says in the lawsuit.
He claims that he and Tiversa have been “recognized for their contributions to law enforcement and national security and received an award from the Federal Bureau of Investigation” for it.
Tiversa specializes in searching and copying files on peer-to-peer networks, Boback says in the complaint. He says the P2P networks are vulnerable to “inadvertent file sharing,” as people who want to share only music files, or an academic paper, “instead may open all files on their computer’s hard drive to access by other uses on the P2P network.”
In 2008, Boback says, Tiversa found such a document – 1,718 pages that contained health care information, including patients’ Social Security numbers, insurance information and treatment codes.
He claims the file was created and stored on a LabMD computer, and that he personally, on behalf of Tiversa, contacted LabMD to warn it that the file was publicly available.
“Mr. Boback and Tiversa also provided a copy of the File to LabMD to confirm that it was indeed LabMD’s document,” the complaint states.
“After informing LabMD of the availability of its file, Mr. Boback offered Tiversa’s remediation services to LabMD to assist it in securing the file and ensuring that no other breaches of confidentiality took place.
“LabMD requested, and Tiversa provided, a contract regarding the cost of remediation.
“LabMD did not retain Tiversa’s services, and communications between the parties stopped.”
Boback says he has testified three times to Congress about “the extent and magnitude of security breaches that could occur via P2P networks. Two of these three testimonies were given to the House Oversight and Government Reform Committee.”
He testified in July 2007, and in May and July 2009, Boback says.
When the Federal Trade Commission “learned of the extent and magnitude of security breaches that could occur via P2P,” it sent investigators to Tiversa to look for all such files that contained more than 100 Social Security numbers, Boback says.
He says Tiversa provided the federal government those files, “(u)nder threat of federal subpoena,” and that Tiversa never received any payment, in any form, for this.
In 2009, Boback says, the FTC began investigating LabMD for failing to protect its customers’ data.
“That investigation has continued and on August 29, 2013, the FTC filed an administrative complaint against LabMD, alleging that LabMD failed to reasonably protect the security of consumers’ personal data, including medical information,” the complaint states.
“Upon information and belief, the FTC’s administrative complaint is based on, inter alia, the File.”
Boback and Tiversa claim the book defames them: “In his video ‘trailer’ for the book, available on Mr. Daugherty’s personal website, Mr. Daugherty highlights his position as LabMD’s president and CEO and Mr. Daugherty alleges that Tiversa is part of a ‘Government Funded Data Mining & Surveillance’ scheme that engages in ‘Psychological Warfare’ and helps to assist in ‘Abusive Government Shakedown[s].’ See www.michaeljdaugherty.com. More specifically, Mr. Daugherty alleges Tiversa is conducting ‘300 Million Searches per day’ for ‘Homeland Security’ and the ‘Federal Trade Commission.’
“Mr. Daugherty further claims that Tiversa ‘downloaded’ the File ‘and would not answer our questions unless we hired them, kicked the file over to the feds, and then the federal trade commission began overwhelming our small business, a cancer detection center, with their beltway tactics.’ …
“In essence, Mr. Daugherty has stated, in many different mediums, that Tiversa illegally accessed and stole LabMD’s files, and then extorted LabMD in attempt to obtain business. When LabMD refused, according to Mr. Daugherty, Tiversa sent the files to the FTC, to begin an investigation into LabMD.”
Daugherty’s marketing to promote his book includes the statement: “[w]hat began with the unauthorized but government-funded procurement of medical data for 9000+ patients from his medical laboratory turned into a government supported, financially draining, extortion attempt,” according to the complaint.
Tiversa seeks a permanent injunction to stop publication of “The Devil Inside the Beltway,” as plus attorneys’ fees, disgorgement of profits and punitive damages for defamation, slander, trade libel, abuse of government authority, commercial disparagement, tortious interference with contractual relations, and intentional infliction of emotional distress.
Boback and Tiversa are represented by Jarrod Shaw, with Reed Smith, in Pittsburgh.
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