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Former Insitu Contractor Gets 3 Months In Jail For Selling Trade Secrets In 2011

A Kentucky man who previously worked for Insitu has been sentenced to three months in prison after it was found that he sold trade secrets connected to drones in 2011.

According to a press release from the Seattle Division of the FBI, Stephen Martin Ward, 49, of Owensboro, Ky., was sentenced by Chief United States District Judge Rosanna Malouf Peterson on July 31 after being found guilty of Theft of Trade Secrets under the Economic Espionage Act.

“Businesses and our government expend considerable resources in protecting intellectual property to ensure our national security and the well-being of our economy. The Office of the National Counterintelligence Executive has estimated losses from economic espionage to be in the tens or even hundreds of billions of dollars annually to the American economy. The potential consequences of Ward’s unlawful conduct cannot be understated,” Michael Ormsby, US Attorney for the Eastern District of Washington said in the release.

Ward was hired as a technical writer by Insitu in August 2011 to develop a maintenance manual for a drone known as the RQ-21A Blackjack. His sentencing comes three years after he was arrested on Nov. 11, 2011, in Floyds Knobs, Ind., where he delivered a digital copy of the maintenance manual to an undercover agent for $10,000, according to the release.

When asked for comment on Ward’s sentence, a spokesperson for Insitu said the company would not be commenting further than the facts stated by the FBI at this time.

A one-month investigation was launched two months after Ward stopped working at Insitu when he told a former supervisor that he had taken “substantial amounts of proprietary data from the company,” the release states. Ward delivered the digital copy of the drone’s maintenance manual in exchange for the $10,000 after being led to believe that it would be a down payment for a total payment of $400,000 for all of the data.

It was also found that Ward had e-mailed entities in Kuwait to gauge interest in the data by providing the cover page of the manual.

After a two-week trial, a jury found Ward guilty of Theft of Trade Secrets on April 25 this year. In addition to three months in jail, the July 31 sentence carries with it three years of court supervision and orders Ward to have no contact with Insitu, Boeing, Corsair Engineering, or any of their offices or employees.

“Unfortunately, Stephen Ward is emblematic of a growing counterintelligence problem: the insider threat,” said FBI Special Agent in Charge Frank Montoya, Jr. “Whether motivated by twisted ideology or pure greed, these thieves disregard the safety of their fellow citizens. If a protected technology ends up in the hands of our adversaries, it could be used to undermine our national security. Fighting theft of trade secrets is a top priority for the FBI’s counterintelligence program and will remain so.”

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