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Insider-Trading Suspects Smash Hard Drive Evidence 364

Posted by samzenpus
from the you-forgot-to-melt-it-down dept.
An anonymous reader writes "We all know Slashdotters love debating the best way to wipe a hard drive clean. Looks like tech-savvy Wall Street Hedge Fund managers also know the best way to do it. From the WSJ article: 'Mr. Longueuil's version of that night's events was recorded later, during a December meeting with former colleague Mr. Freeman, who by then was cooperating with the government and recording conversations, according to the U.S. complaint. "F—in' pulled the external drives apart," Mr. Longueuil told Mr. Freeman during their meeting, according to the criminal complaint. "Put 'em into four separate little baggies, and then at 2 a.m. 2 a.m. on a Friday night, I put this stuff inside my black North Face jacket, and leave the apartment and I go on like a twenty block walk around the city and try to find a, a garbage truck and threw the s—t in the back of like random garbage trucks, different garbage trucks four different garbage trucks."'"
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Insider-Trading Suspects Smash Hard Drive Evidence

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  • Hmm... (Score:5, Funny)

    by fuzzyfuzzyfungus (1223518) on Thursday February 10, 2011 @01:38PM (#35163872) Journal
    Perhaps we shouldn't be whining about tech-clueless management after all... This seems like a much worse alternative. On the plus side, he probably didn't even think about the mailserver backups...
    • Re:Hmm... (Score:4, Informative)

      by Svartalf (2997) on Thursday February 10, 2011 @01:48PM (#35164002) Homepage

      He probably did. They nuked things like their Crackberry messaging traffic amongst other things at his insistence.

    • Re: (Score:3, Insightful)

      If you don't see the body it's not dead. It's physically possible to search the dump and find those drives. The compressor in the truck isn't strong enough to destroy the drive so it should still be readable. It would be very labour intensive but in the current (US) economy that isn't an issue.
      • by Sorthum (123064)

        Depends on whether they actually cracked the drives open and pulled the platters. The article is unfortunately ambiguous on this point; it just refers to them "tearing apart external drives" which may well be them simply pulling the drive from its enclosure.

        • Re:Hmm... (Score:4, Informative)

          by chemicaldave (1776600) on Thursday February 10, 2011 @02:22PM (#35164422)

          Depends on whether they actually cracked the drives open and pulled the platters. The article is unfortunately ambiguous on this point; it just refers to them "tearing apart external drives" which may well be them simply pulling the drive from its enclosure.

          The article is not ambiguous. Skip to the bottom to see a section of the US attorney's complaint.

          Freeman then remarked, "I don't see how you get rid of this shit," to which LONGUEIL explained, "Oh, it's easy. You take two pairs of pliers, and then you rip it open . . . and then, it's just a piece of NAND."

          More...

          "Fuckin' pulled the external drives apart. Destroyed the platter..."

          That's pretty unambiguous.

          • by cayenne8 (626475)
            Boy..if there's one thing I've learned from watching the Sopranos.....it is to always give your 'friends' a hug when you meet them, before you start talking.

            That way, you can try to feel if they are wearing a wire or not...

        • He ripped the drive apart. He then divided up the parts into 4 bags. Then he tossed them into 4 differnet places on the assumption that different wast companies would take them to different places.

          He also talks about opening usb drives and smashing the NAND chips, destoying e-mail on his blackbery, shredding documents, etc.

          While not the smartest, he is not the dumbest either.

  • by betterunixthanunix (980855) on Thursday February 10, 2011 @01:39PM (#35163874)
    I have heard of people getting hit with destruction of evidence charges for engaging in this sort of behavior...
    • by commodore6502 (1981532) on Thursday February 10, 2011 @01:45PM (#35163966)

      Yep. To quote the article: "When people frantically begin shredding sensitive documents and deleting computer files and smashing flash drives and chasing garbage trucks at 2 a.m. ... it is not because they have been operating legitimately," said Manhattan U.S. Attorney Preet Bharara.

      Ahhh the old "if you are innocent, then you shouldn't have a right to privacy" argument.
      Obviously I disagree.
      I'd destroy my hard drive too if I got word the government was coming. They don't need to know that I donated to wikileaks and other projects.

      • I'd destroy my hard drive too if I got word the government was coming. They don't need to know that I donated to wikileaks and other projects.

        Truly sir your tinfoil is 20 mil [amazon.com].

        I don't think the feds care much either about donation to Wikileaks or your desire to use your kitteh to login to your computer [kickstarter.com].

      • If they can reasonably believe that an investigation is coming, it is still considered destruction of evidence.

        On the other hand, if the warrant is for information about insider trading, your wikileaks project info has a small amount of protection. ... until prosecutors find an excuse to hang a second warrant on.

      • by JoshuaZ (1134087)

        I'd destroy my hard drive too if I got word the government was coming.They don't need to know that I donated to wikileaks and other projects.

        Unfortunately, if you do that you've switched from having done something politically unpopular to committing a clear crime which they can easily convict you. Destroying evidence is very rarely a good move.

        • no no. destroying his hard drive is one thing.

          Talking about it. at all. with anyone.
          That's the stupid bit.

          never confess to anything. ever. to anyone.
          Without that all they have is lack of information.

          • Yes, HungryHobo has it right. There are a number of things that have happened during my lifetime, which I've not told ANYONE. You don't tell your buddy that you'll take care of things, before, during, or after. You don't tell your wife, your parents, your kids, not even your grandparents when they are on their deathbeds. That's the problem with ANY secret - people want to brag about what they did. They want credit. Phht. The minute you take credit, it's no longer a secret. Need to destroy a hard dri
        • by hldn (1085833)

          Destroying evidence is very rarely a good move.

          unless the evidence would be used to convict you of a far greater crime, in which case destroying evidence seems like a rather great idea.

      • by boristdog (133725)

        Yep. To quote the article: "When people frantically begin shredding sensitive documents and deleting computer files and smashing flash drives and chasing garbage trucks at 2 a.m. ... it is not because they have been operating legitimately," said Manhattan U.S. Attorney Preet Bharara.

        Ahhh the old "if you are innocent, then you shouldn't have a right to privacy" argument.
        Obviously I disagree.
        I'd destroy my hard drive too if I got word the government was coming. They don't need to know that I donated to wikileaks and other projects.

        Well, they would probably be REALLY suspicious of what we do out at my place. My shooting range is littered with hard drives that have been blown to bits by various firearms. Laptop drives, 3.5" desktop drives, old 5" RLL & MFM drives. I even have some old 12" disk packs out there from a previous employer that told me to "get rid of" the old things.

    • Obviously. Obstruction of justice, or whatever, can lead to jail time. But jail time is a far better alternative to having the millions you stole taken back. If they can't prove he stole it, he gets to keep it.

      • by hitmark (640295)

        So he stash them in some fund, and then retires to some sunny place once the jail time is over...

    • Yeah but that's because they didn't steal enough (or anything at all) to cover the lawyer costs.

    • by skuzzlebutt (177224) <jdb AT jeremydbrooks DOT com> on Thursday February 10, 2011 @01:56PM (#35164116) Homepage

      True, but, were I in their shoes, I'd have to ask myself:

      1. Does acting strangely (i.e., throwing my hard drives in random garbage trucks) prove my guilt in the case?

      2. If there is evidence on those hard drives that probably would prove my guilt, which is the lesser sentence: obstruction or whatever I'll get charged with if they find smokinggun.jpg on those drives?

      • by Sorthum (123064)

        Exactly. If you've got evidence that you've committed murder on a drive, and you destroy the drive, the penalty for obstruction is orders of magnitude less than the penalty for a successful murder conviction.

      • by Patoski (121455) on Thursday February 10, 2011 @07:27PM (#35168478) Homepage Journal

        True, but, were I in their shoes, I'd have to ask myself:

        1. Does acting strangely (i.e., throwing my hard drives in random garbage trucks) prove my guilt in the case?

        I worked in electronic discovery for a time which deals with ferreting out electronic information during trials. Doing something in the manner you're pondering would likely get you into a lot more trouble than you're counting on.

        During your trial the judge the judge would likely find efforts to destroy to be in bad faith and give the jury an instruction to make an adverse inference [wikipedia.org] about the evidence you destroyed. Basically this means that whatever bad facts the prosecutor claims were on the hard drive (with a modicum of fact and or educated guessing backing it up), the jury would assume those bad things were found to be true during trial. there is a small chance that the judge might invoke a default ruling (i.e. you're guilty).

        2. If there is evidence on those hard drives that probably would prove my guilt, which is the lesser sentence: obstruction or whatever I'll get charged with if they find smokinggun.jpg on those drives?

        You would likely be found guilty of both the original charges (whatever they were) and destruction of evidence and whatever else the prosecutor can come up with (which is likely to be lengthy). In general it is a bad idea to try to outsmart the court or play fast and loose with evidence. Very few things will tick off a judge faster or more violently than the destruction of evidence in bad faith (i.e. you meant to destroy or hide evidence to avoid getting caught).

    • I have heard of people getting hit with destruction of evidence charges for engaging in this sort of behavior...

      You mean you've heard of people being charged with destruction of evidence for destroying evidence? spooky...

  • Encryption (Score:5, Interesting)

    by heypete (60671) <pete@heypete.com> on Thursday February 10, 2011 @01:39PM (#35163882) Homepage

    Encryption seems a bit more foolproof. It's also a bit more believable that one might "forget" a lengthy passphrase, while physical destruction looks a bit suspicious.

    That said, encryption and physical destruction is also useful, as it means that even if someone gets some of the physical components of the disk, it will be even more difficult to get any data off of them.

    • Keep in mind that in some places, using encryption to hide evidence of a crime is itself a crime:

      http://leg1.state.va.us/cgi-bin/legp504.exe?000+cod+18.2-152.15 [state.va.us]
      • Re:Encryption (Score:4, Insightful)

        by Jaysyn (203771) <jaysyn+slashdot@noSpAm.gmail.com> on Thursday February 10, 2011 @01:51PM (#35164056) Homepage Journal

        So? I'd gladly take a misdemeanor if it meant they had no evidence that a crime was committed.

        Another poorly thought-out law written by stupid assholes that don't understand the first fucking thing about computers.

        • I imagine that it would be a very strange scenario if you were convicted of that misdemeanor without being convicted of another crime as well. After all, they need to have the evidence in order to show that you encrypted the evidence. It is really just another law that underhandedly increases criminal sentences and adds to the number of charges that accused criminals have to argue against.
        • If you're not using encryption to protect evidence more incriminating that the mere use of encryption itself, you need to up your game.

      • by zero0ne (1309517)

        But how does one go about and PROVE that the encryption was used to willfully hide evidence? If they can't see the data, how do they know it is evidence of a crime?

        Also, what kind of moron would go around talking about how he destroyed evidence to ANYONE? Considering the only way they could secure a good case against you is either video of you destroying the evidence or audio of you talking about it, you shouldn't be talking openly about it.

        "Loose lips sink ships"

        • Take a look at the police training manual, "Catch him with his encryption down," which is posted somewhere on cryptome. The police have methods of extracting passphrases or tricking people into leaving an encrypted partition mounted; they can then collect the evidence, and charge you with the crime of encrypting it. Actually defending yourself against the police, even if you use encryption, is a substantially difficult thing to do.
        • by Sorthum (123064)

          This is very much what I want to know. Destroy your drives, shred your papers, I'm with you this far-- but then ADMITTING to having done it? This isn't like the situation of a thug bragging about a store he robbed for ego points; nobody's going to praise you for operating a shredder, so where's the value in yammering about it?

      • by corbettw (214229)

        Oh, well, in that case, I'm sure the criminals will just forgo using encryption. After all, you know how much they respect the law.

  • by Jawnn (445279) on Thursday February 10, 2011 @01:40PM (#35163890)
    So they should continue to receive the lighter sentences. Right? It shouldn't matter that the impact of their crime was the ruination of thousands of lives. Putting these guys in with common thugs is just cruel.
    • by zero0ne (1309517)

      Don't hate the player, hate the game.

      • So it's not the rapist's fault, it's... Mother Nature's? God's?

        • by wierd_w (1375923) on Thursday February 10, 2011 @02:05PM (#35164224)

          at the risk of suffering 5000 degree flamewar posts...

          There *IS* some (small) evidence that being a rapist is at least partially genetically based. (rather, a predisposition to being a rapist that is.)

          In such cases, I would say the impulse is mother nature's fault. The decision to act, is the purpetrator's.

          (Much like mother nature is at fault for our desire to eat sweet things, but our reaching into the cookie jar when we know better is OUR fault.)

          Now, that aside-- White collar criminals who destroy thousands of people's lives so they can live in obscene luxury deserve not only to be devested of said luxuries, but to be treated like the criminals they are. That does not mean I advocate prison rape or the like-- even serial killers shouldnt be subjected to cruel and unusual punishments or conditions in the penal system-- it just means that they should be put away and prevented from doing any further harm.

      • by fuzzyfuzzyfungus (1223518) on Thursday February 10, 2011 @01:54PM (#35164100) Journal
        Why ration hatred? It isn't exactly a terribly limited resource. Seems entirely reasonable to hate the game and(since joining the game is voluntary) all the players.
    • by Solandri (704621) on Thursday February 10, 2011 @02:17PM (#35164368)
      The distinction (problem) isn't street thug vs. white collar. It's with the victims. With a street thug, there's one victim, one person bearing all of the injury. It's really easy to look at that one person, feel the emotional weight of the injury, and decide the perpetrator needs to be punished.. With white collar crime, the injury is distributed over dozens, hundreds, sometimes millions of victims. So even though the sum total of the injury may be much greater than the sum total of the injury caused by the street thug, there is little to no emotional impact. People still see it as "well, that spam only cost me 5 seconds of my life, so no big deal." So the punishments tend to be much less severe.

      Guess what? 5 seconds per spam * 10 spams which get past the filters * 100 million recipients works out to 158 man-years of time lost. The sum total of the injury caused by this spammer is actually greater than killing a person. It's just that the injury is distributed instead of concentrated on one place. The average lost productivity to society is the same.
      • When I think white collar crimes, I think of those which deprive you of savings, home, identity, etc., ultimately damaging your and your family's health, safety and prospects. The emotional impact is obvious and visible.

        But the amount of money white collar criminals have to put a positive PR spin on what they do exceeds that available to rapists. If a few powerful people decided to take up public serial rape, I'm sure ten years of media tweaking would get a chunk of the unwashed mass to start supporting the

    • So they should continue to receive the lighter sentences. Right?

      Lindsay Lohan seems to get off with no jail time at all.

  • White collar... (Score:5, Insightful)

    by mfh (56) on Thursday February 10, 2011 @01:43PM (#35163934) Homepage Journal

    Red sleeves.

  • if they prove deliberate destruction of evidence, doesn't that constitute admission of guilt? or some other loss-by-default?

    • by fuzzyfuzzyfungus (1223518) on Thursday February 10, 2011 @01:52PM (#35164072) Journal
      IANAL; but my understanding is that it doesn't constitute an admission of guilt per se(particularly in these days of high-capacity hard drives, there would be no reasonable way to bound the number of things you could have been guilty of with just one HDD...); but, destruction of evidence and/or "obstruction of justice" are typically crimes in themselves.

      If they have a recording of you describing how you ripped apart and surreptitiously disposed of your HDD after you heard that the feds were on your trail, those charges are going to be very hard to dodge...

      Merely destroying your hard drive, out of caution or paranoia, and then learning later that the feds would really have liked to have a look through it, is one thing; but if you are caught on tape describing why you destroyed it, game over, man.
    • My understanding was that unless you are already aware of a warrant when you destroy the evidence, it's not obstruction of justice. Even then, obstructions of justice might be better than what you could get otherwise.
    • If they prove destruction of evidence, they prove obstruction of justice. A hard drive can be disposed of in incredibly suspicious circumstances out of the want of thoroughness just as easily as the want of a conspiratorial cover-up.

    • by Wrath0fb0b (302444) on Thursday February 10, 2011 @02:15PM (#35164342)

      if they prove deliberate destruction of evidence, doesn't that constitute admission of guilt? or some other loss-by-default?

      No, but it does allow the prosecutor to give the jury instructions that they may make a adverse inference[1] as to the contents of the destroyed relevant evidence from the fact that the defendant knowingly (sometimes even negligently) destroyed it. Essentially, they are telling the jury that they can infer that the evidence would weaken the defendant's case from the fact that he willfully destroyed it.[2] The jury is not required to make such an inference but it may -- as contrasted from the fact that prosecutors are forbidden from trying to make adverse inferences from a refusal to testify based on 5A grounds, such jury instructions would be illegal and the whole conviction overturned.

      This is a very onerous instruction and so is reserved for cases in which it was shown that the destruction was knowing or negligent but it's necessary in order for the discovery system to work. In the absence of a adverse inference rule, litigants would have a very strong incentive to preemptively destroy any incriminating evidence as soon as they became aware of an investigation or a lawsuit. In cases against corporations in which internal emails/documents play a pivotal role in proving that the behavior was part of a pattern/policy of the company (and not merely a rogue employee) this would be fatal to the plaintiff/State. The same logic applies in cases against the State[3] where they refuse to disclose evidence that might be favorable to the defendant.

      [1] http://en.wikipedia.org/wiki/Adverse_inference [wikipedia.org]
      [2] http://vegaslitigator.com/blog/?cat=50 [vegaslitigator.com] (discussing the Nevada statute, not the Federal one, but many parallels and the same basic concepts exist).
      [3] http://legalholds.typepad.com/legalholds/2009/04/negligent-destruction-of-evidence-is-sufficient-to-support-an-adverse-inference-instruction-although.html [typepad.com] An interesting case in which police destruction of evidence helps to get defendants off the hook because they allege that the destroyed evidence would undermine the State's case. IOW, the adverse-inference doctrine cuts both for and against the State. The defendants did eventually convince the court that the radio communications were relevant.

  • Moral of the Story (Score:5, Informative)

    by BJ_Covert_Action (1499847) on Thursday February 10, 2011 @01:47PM (#35163996) Homepage Journal
    So what do we learn kids? Don't talk about the skeezy shit you do to anyone: friend, family, coworker, or other. If you do bad shit, keep it to yourself.

    At the small town bars I used to hang out in we had a saying, "Loose lips get hit."

    It would appear that the hammer of justice follows a similar rule of thumb.
    • by Princeofcups (150855) <john@princeofcups.com> on Thursday February 10, 2011 @02:05PM (#35164226) Homepage

      So what do we learn kids? Don't talk about the skeezy shit you do to anyone: friend, family, coworker, or other. If you do bad shit, keep it to yourself.

      You've never worked in trading (IT end), have you? These guys are immune from normal laws. At the CBOT in Chicago, there were drug dealers selling coke right outside the front doors. The police were NEVER to be found. And there was a lot of buying, piles of coke spilled on the bathroom floors, etc. Most of the traders were college football players/econ majors. I kid you not. They need to be large and imposing to get seen/push their way around on the trading floor. The company I worked for would burn them out at a rapid pace.

      Anyway, this kind of talk was quite common. When you are above the law, who cares, you know? When the worse prison sentence you can get is a 3 month vacation at golf course, who cares?

  • It would have been very nice if we could conclude, "But the joke was on him because a passing Google streetview truck intercepted, downloaded, cached and indexed the hard disk's data, all dressed up and ready to be data mined by the investigators..." But alas, no such luck.
  • And these guys are supposed to be incredibly brilliant? Good thing he used baggies. Wouldn't want them to get dirty in the trash.
  • by Tekfactory (937086) on Thursday February 10, 2011 @01:51PM (#35164052) Homepage

    Great so he destroyed everything he had, if he's the trader, then someone at the companies he traded in will know the information given to him.

    Not only did he not get his own mailservers, he didn't get their mailservers, his accomplices hard drives, the coorperation of his colleague Mr. Freeman or anyone else that is going to turn evidence on him to get their own sentences commuted.

    The Prisoners Dilemma in the 21st century: Everyone Encrypts (phones, emails, hard drives) and Nobody Talks. Otherwise somebody is going to have evidence pinned on them, then its just a race to be the first in line to rat the others out.

  • by unitron (5733) on Thursday February 10, 2011 @01:52PM (#35164070) Homepage Journal

    Why are there 2 seemingly identical versions of this story on the main page? This isn't the time-honored Slashdot tradtion of dupes from different editors who didn't check with each other, this is more clone than dupe, and it's been happening a lot every since this horrible new design was rolled out.

  • by Jodka (520060) on Thursday February 10, 2011 @02:01PM (#35164190)

    "...threw the s—t in the back of like random garbage trucks, different garbage trucks four different garbage trucks."

    "Mr. Longueuil's version of that night's events was recorded later, during a December meeting with former colleague..."

    After thoroughly eradicating all trace of evidence, he then told someone else what he had done. Brilliant.

  • by roc97007 (608802) on Thursday February 10, 2011 @02:04PM (#35164218) Journal

    Does anyone else think that the quote sounds like one of those fake quotes you see in mail hoaxes? For instance, why would he say "I put this stuff inside my black North Face jacket", which adds nothing to the story but is something a hoaxer would put in if he saw photos of Longueuil wearing North Face products. Besides, maybe the guy wasn't a Rhodes Scholar, but I have a hard time believing the managing director of a capital management firm speaks like a valley girl.

    I'm not saying he's innocent, just that this news item doesn't look right.

    • by MaWeiTao (908546)

      I've met people in similar positions. They get these impressive-sounding titles and an income to match. It's not that they don't work hard, but speaking to them you wouldn't think they do anything particularly special. The guy's only 34-years-old and living in NYC; he probably spends the entire weekend club-hopping like most other young people in the city. He's not some old-fashioned snob spending the weekends in the Hamptons.

      That transcript looks totally convincing to me.

    • Does anyone else think that the quote sounds like one of those fake quotes you see in mail hoaxes? For instance, why would he say "I put this stuff inside my black North Face jacket", which adds nothing to the story but is something a hoaxer would put in if he saw photos of Longueuil wearing North Face products. Besides, maybe the guy wasn't a Rhodes Scholar, but I have a hard time believing the managing director of a capital management firm speaks like a valley girl.

      I'm not saying he's innocent, just that this news item doesn't look right.

      People in Manhattan, especially investment banker types, place a lot more value on things like the brands of their clothes than most people elsewhere. Seriously, I know a lot of people who call their jackets/sweaters/etc. "my Patagonia" or "my Northface." The actual nature of the object is less important than the designer.

  • by PolygamousRanchKid (1290638) on Thursday February 10, 2011 @02:13PM (#35164308)

    It's a Sicilian Message: your hard drive sleeps with the fishes. Toss the hard drives into the Atlantic from your yacht. Let the salt water take care of the rest. Or encase them into cement at a construction site. The old, time-tested methods are the best.

  • ..that all end up in the same landfill. I'm sure the feds won't have any problems collecting all the pieces. Also I doubt they dismantled the drives down to the platters and scattered the platters.
    • by jackbird (721605)
      They might end up in the same landfill, but there's no guarantee they'd get there even on the same barge. New York City has 8 million residents and generates over 36,000 tons of garbage a day. That's a lot of garbage to go through even if they thought Osama was hiding in it.
  • by LordNacho (1909280) on Thursday February 10, 2011 @02:18PM (#35164386)

    "We all know Slashdotters love debating the best way to wipe a hard drive clean. Looks like tech-savvy Wall Street Hedge Fund managers also know the best way to do it. From the WSJ article: 'Mr. Longueuil's version of that night's events was recorded later, during a December meeting with former colleague Mr. Freeman, who by then was cooperating with the government and recording conversations, according to the U.S. complaint. "F—in' pulled the external drives apart," Mr. Longueuil told Mr. Freeman during their meeting, according to the criminal complaint. "Put 'em into four separate little baggies, and then at 2 a.m. 2 a.m. on a Friday night, I put this stuff inside my black North Face jacket, and leave the apartment and I go on like a twenty block walk around the city and try to find a, a garbage truck and threw the s—t in the back of like random garbage trucks, different garbage trucks four different garbage trucks."'"

    We usually mean banks or the exchange when we speak about Wall Street. If you need a location-based idiom for Hedge Funds, Greenwich CT works. Or Mayfair if you're in London. And yes, banks are different from Hedge Funds. Don't mix up your villains please.

  • I would take the platters and make of few runs on them with a fly mill. Recover that!

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