Microsoft Workers Charged with $32.4 million in Software Theft

SEATTLE -- Four former Microsoft Corp. employees have been charged with stealing $32.4 million worth of software, the latest case in a two-year probe of employee theft at the software giant, the Seattle Post-Intelligencer reported Thursday.

In a 33-page complaint filed Monday in U.S. District Court, Alyson Clark of Normandy Park, Finn Contini of Redmond, Christine Hendrickson of Bothell and Robert Howdeshell of Puyallup were accused of conspiring to defraud Microsoft and sell products for personal gain. Contini and Howdeshell also were accused of money laundering.

Howdeshell was a project coordinator and the other three were group assistants.

The dealings cited in the case occurred before Microsoft toughened security provisions in its ordering system in mid-2002.

Clark and Hendrickson face five years in prison and as much as $250,000 in fines, and Contini and Howdeshell face 15 years in prison and up to $500,000 in fines if convicted on all charges, assistant U.S. attorney Katheryn Kim Frierson said Wednesday.

Frierson wouldn't say whether charges would be brought against those who received the software cited in the case.

Clark, the only person to appear in court as of late Wednesday, was released on her own recognizance. None of the four could be reached for comment by the Seattle P-I.

According to the complaint, they used an Internet-based system with which Microsoft employees can order software at no personal cost for business purposes, manipulating it to prevent e-mail notices of their orders from being sent to their supervisors or managers.

Investigators wrote that they then sold the software they obtained, including SQL Server 2000, which carries a suggested retail price of $15,000, and SQL Enterprise Server 7.0, suggested at $29,000.

Clark worked at Microsoft from about June 1992 until she was fired last month, Contini from September 1999 until he resigned in February 2002, Hendrickson from March 2000 until she was fired in June 2002 and Howdeshell from May 2000 until he resigned in October 2001.

According to court records, some of the software was sold to Nathaniel Angelus of Portland, Ore., who works at Software Provisions, an online software retailer, and Stephen Morse of Leesburg, Va., who worked at S.M. Distribution.

Angelus, who was said to have paid Contini more than $1 million for software, told the Post-Intelligencer he had no recollection of Contini.

He did remember Travis Barth, a former Microsoft employee who -- according to the complaint -- told internal investigators he stole software from employees' offices and sold it to Angelus.

Angelus said he was closing Software Provisions and didn't know the software was stolen.

"I would not like to be associated with ill-gotten software, so that is a concern to me," he said.

Investigators wrote that Morse paid Contini $1.3 million in the year ending June 2002. Morse could not be reached by the Post-Intelligencer for comment.

In previous employee theft cases, former Microsoft manager Daniel Feussner was charged in December 2002 with stealing $9 million worth of software and committed suicide two months later.

In June 2003, former Windows project coordinator Richard Gregg pleaded innocent to 62 counts of mail fraud and computer fraud. The federal court file on that case remains under seal.

In July 2003, former Microsoft administrative assistant Kori Robin Brown of Spokane pleaded guilty to selling $6 million worth of software for personal gain between October 1998 and August 2000.