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Contractor accused of stealing critical government financial software

Federal Reserve Bank New York

FBI and Treasury Department agents arrested a government computer programmer contract employee on Jan. 18 for allegedly stealing the critical software source code that helps keep track of the U.S. Government’s financial operations.  

Bo Zhang, 32, a Queens, NY, computer programmer, was arrested and charged with stealing proprietary software code from the Federal Reserve Bank of New York (FRBNY), where he worked as a contract employee. Zhang was arrested by FBI and Department of the Treasury Office of Inspector General (“OIG”) agents and was expected to make an initial court appearance in Manhattan federal court late on Jan. 18, said a statement from the U.S. Attorney’s Office in the Southern District of New York.

Federal authorities said Zhang was arrested not for Cyber crime per se, or terrorism, but for intellectual property theft, which they said poses another threat to the government security. “As today’s case demonstrates, our cyber infrastructure is vulnerable not only to cybercriminals and hackers, but also alleged thieves like Bo Zhang who used his position as a contract employee to steal government intellectual property,” said Manhattan U.S. Attorney Preet Bharara. “Fighting cyber crime is one of the top priorities of this Office and we will aggressively pursue anyone who puts our computer security at risk.”

 “Zhang took advantage of the access that came with his trusted position to steal highly sensitive proprietary software. His intentions with regard to that software are immaterial,” said FBI Assistant Director-in-Charge Janice K. Fedarcyk. “Stealing it and copying it threatened the security of vitally important source code.”

The charges allege Zhang checked out and copied the Government-wide Accounting and Reporting Program (“GWA”) Code onto his hard drive at the FRBNY; then connected the external hard-drive to his private office computer, his home computer, and his laptop. The charges allege that he said that he used the GWA Code in connection with a private business he ran training individuals in computer programming and that he planned to develop a specific portion of it.

The GWA is a software system owned and developed by the U. S. Department of the Treasury (DOT) to help keep track of government finances. Among other things, the software handles ledger accounting for each appropriation, fund, and receipt within the DOT, and provides federal agencies with an account statement – similar to bank statements provided to bank customers – of the agencies’ account balances with the United States Treasury. The proprietary computer source code associated with the GWA is maintained by the FRBNY in an access-controlled electronic repository.

Zhang faces ten years in prison and a possible $250,000 fine if convicted of the charges.


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