LAS VEGAS SUN

U.S. firms are big target of corporate espionage

February 02, 1998-By Richard N. Velotta

Wiretaps on European commuters.

Thefts of documents on floppy disks and CD-ROMs left on laptops in hotel rooms.

Bribes. Moles. Swallows. Ravens.

This is the stuff of corporate espionage, the practice of spying on companies to learn trade secrets and proprietary information.

Earlier this month, the FBI estimated that intellectual property losses to U.S.-based corporations exceeded $300 billion in 1997 and that spies from 23 countries are targeting American companies, especially high-tech firms in Silicon Valley.

The United States has a policy against spying on foreign firms and governments, but a number of U.S. agencies acknowledge counterespionage measures.

But that isn't the emphasis of Las Vegas-based Global Intelligence Network.

"So much of that is illegal in so many jurisdictions," said Peter Maheu, one of the principals for the newly formed company. "We lean toward prevention and prevention analysis, but there are people more capable than we are at doing that."

A survey by the American Society for Industrial Security last year said there were more than 1,100 documented incidences of corporate espionage reported in 1997.

The FBI has a policy against disclosing which countries engage in corporate spying in the United States. But an article by FBI agent Edwin Fraumann appearing in the Public Administration Review, published by the American Society for Public Administration, names France, Germany, Israel, China, Russia and South Korea as the top offenders.

Fraumann, a teacher at John Jay College of Criminal Justice, said French intelligence spied on U.S. companies by wiretapping business people flying on Air France between Paris and New York.

Other spying methods foreign countries use to steal information, according to Fraumann: hacking into company computer systems, bugging offices, capturing cellular phone calls, using prostitutes to blackmail employees, bribing an employee or a supplier and planting moles within a company, sometimes attractive men or women who form close personal relationships with employees involved in top-secret projects. In the world of corporate spies, attractive women are known as "swallows" and men are "ravens."

"We can advise people on how to prevent it (corporate espionage) from happening," said Maheu. "We also have the potential to tell companies when a country is coming in to have a look at things.
"People in our business know that's been going on for some time."