Plano Man Sentenced to 63 Months in Federal Prison in Corporate Hacking Case

DALLAS—Michael Musacchio, 62, of Plano, Texas, was sentenced late yesterday by U.S. District Judge Jorge A. Solis to serve a total of 63 months in federal prison, following his conviction at trial in March 2013 for conspiring to hack into his former employer’s computer network. The issue of restitution is still under consideration by the court. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Musacchio was convicted on one felony count of conspiracy to make unauthorized access to a protected computer (hacking) and two substantive felony counts of hacking. He will remain on bond until he is required to surrender to the Bureau of Prisons on a date to be determined.

According to the evidence submitted at trial, from 2000 to September 2004, Musacchio was the president of Exel Transportation Services, a third party logistics or intermodal transportation company that facilitated links between shippers and common carriers in the manufacturing, retail, and consumer industries. In 2004, Musacchio left Exel to form a competing company, Total Transportation Services, where he was the original president and CEO. Two other former Exel employees from the Exel IT Department, Joseph Roy Brown and John Michael Kelly, also went to work at Musacchio’s new company. Trial testimony and exhibits established that between 2004 and 2006, Musacchio and Brown, assisted by Kelly, engaged in a scheme to hack into Exel’s computer system for the purpose of conducting corporate espionage. Through their repeated unauthorized accesses into Exel’s e-mail accounts, co-conspirators Musacchio and Brown were able to obtain Exel’s confidential and proprietary business information and use it to benefit their new employer and themselves as investors.

A federal grand jury returned an indictment against the three men on November 2, 2010. Brown and Kelly entered guilty pleas on May 19, 2011 and August 2, 2012, respectively, and are scheduled to be sentenced on September 25, 2013.

This was the first investigation of hacking for the purpose of corporate espionage that was conducted by the Justice Department’s Computer Crime and Intellectual Property (CCIP) Section, the U.S. Attorney’s Office for the Northern District of Texas, and the FBI.

The FBI Dallas Field Office was in charge of the investigation. Deputy Criminal Chief Assistant U.S. Attorney Linda Groves and Assistant U.S. Attorney Candina Heath, of the U.S. Attorney’s Office in the Northern District of Texas, and Trial Attorney Rick Green, of the Criminal Division’s CCIP Section, prosecuted.