Judge sentences Shelby Co. official's son to prison for computer crime
MEMPHIS, TN (WMC) - The son of one of Shelby County's highest ranking officials will go to federal prison for hacking his former employer's computer network.
U.S. District Court Judge John T. Fowlkes sentenced 45-year-old Jason Needham to 18 months in prison for "...accessing a protected computer without permission as prohibited by federal law."
Needham, the founder and now former partner of HNA Engineering in Arlington, Tennessee, will also have to pay his former employer, the Memphis engineering firm Allen & Hoshall (A&H), more than $170,000 in restitution.
Needham is the son of Shelby County Public Works Director Tom Needham.
"I am truly ashamed that my actions have hurt Allen & Hoshall and my family," Needham tearfully said in court. "I had a desire to maintain continuity of the projects I started at A&H. I can see now in hindsight that continuing to access their system could give someone a competitive advantage, but I never intended to use that to gain an advantage."
An FBI investigation discovered Needham breached his former employer's email and File Transfer Protocol (FTP) server hundreds of times between 2014 and 2016. Needham left A&H in 2013 to launch HNA Engineering.
According to a court document released at his guilty plea April 14, Needham hacked an A&H employee's email account, then used that access to download and steal documents. On Friday, FBI Special Agent David Palmer testified that one of those documents, a computer file titled Allen & Hoshall FY2016 Potential Projects List, was the company's "playbook" for marketing proposals and client correspondence.
"Mr. Needham downloaded that file," testified Palmer. "There were at least three other employees where Needham made attempts to access their email accounts."
According to the court information, Needham also hacked the FTP's server's rotating password credentials, stealing 82 AutoCAD files with A&H design schematics, job bids and other proprietary content.
"This is an extremely serious and egregious case," Judge Fowlkes said from the bench. "He kept accessing and hacking into their network for years. Passwords were changed, and he still gained access."
Testimony revealed A&H's staff tipped off the FBI after a potential client contacted the firm. The client alerted the staff that it had received an unsolicited bid from Needham and HNA Engineering on the same project for which A&H submitted a bid. The client provided A&H a copy of the HNA proposal. Its language was a verbatim copy of A&H's proposal.
"I never had a criminal intent," Needham insisted to the court. "It was a habit, like checking in with an extended family."
"You're taking away their ability to control who has access to their proprietary information," said Assistant U.S. Attorney Debra Ireland.
"We do not dispute that he intruded into A&H's computer network," said Needham's attorney, Charles Mitchell. "They certainly had pecuniary damage due to his intrusion. But we dispute that A&H suffered a competitive loss."
A&H President Harry Pratt said Needham's prison sentence sends a message not only to the public but also to the engineering industry.
"Our entire industry is moving to an electronic base. Everything we do is electronic. It has to be protected. It's intellectual property. We have to protect our property and respect other people's rights. We think justice was served," Pratt said.
Needham has 14 days to appeal his sentence. Neither he nor his attorney would answer questions. He told the court he plans to forfeit his engineering license.
His father, Tom, would not comment on the case. He has held the county's public works directorship since 2010 and served as a consultant for his son's firm since its inception in 2013. His business relationship with his son and documents obtained by the WMC Action News 5 Investigators raise questions about conflict of interest.
Tom Needham addresses those concerns on camera in a special report Monday on WMC Action News 5 at 10 p.m.
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