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Counter Proliferation Investigation Unit

Colorado company sentenced for 'trading with the enemy'

DENVER - A Boulder, Colo., based computer software company that helps identify oil and gas deposits, was sentenced last week to a $14,500 fine for "trading with the enemy." This sentence was announced by U.S. Attorney David Gaouette, District of Colorado, and the investigating agencies U.S. Immigration and Customs Enforcement and the FBI.

Platte River Associates was also ordered by Chief U.S. District Court Judge Wiley Y. Daniel to pay a $400 special assessment to a victims-of-crime fund. The company pleaded guilty through its corporate counsel to the trading with the enemy charge on Oct. 3, 2008. It was originally charged by Information on July 15, 2008, and was sentenced on Sept. 9, 2009.

In an unrelated case, the president of Platte River Associates, Jay E. Leonard, was sentenced to serve 12 months of supervised probation for unauthorized access of a protected computer. Leonard pleaded guilty on Oct. 2, 2008, and was sentenced on Dec. 16. He was originally charged with a misdemeanor in a separate Information on July 15, 2008.

According to the Information, as well as the stipulated facts contained in the plea agreements, Platte River Associates (PRA) sells software that aides in oil and gas exploration. On Oct. 13, 1998, federal agents visited PRA's Boulder office, to put them on notice that dealing either directly or indirectly with embargoed countries, including Cuba, is prohibited.

On Aug. 1, 2000, a Spanish oil company called Repsol purchased PRA software. In October 2000, a Repsol employee traveled to PRA's Boulder office for software training. The Repsol representative brought with him a laptop computer containing data for creating a model for oil and gas exploration. PRA assigned a geologist to work with the Repsol employee. The Repsol employee told the geologist that the data being used for training was for a Cuban project. During the course of the training, PRA's president learned that the data being used involved Cuban waters. However, PRA made no attempt to stop providing the training. As the Repsol employee was leaving the United States, U.S. Customs and Border Protection seized his laptop computer. A computer analysis revealed materials related to a potential Cuban project.

The Information charged the defendant corporation with providing specialized technical computer software and computer training, which was then used to create a model for the potential exploration and development of oil and gas within the territorial waters of Cuba, without first having obtained a license from the Secretary of the Treasury.

According to the Information charging Platte River Associates' President Jay E. Leonard, as well as the stipulated facts in that plea agreement, on Oct. 30, 2005, Leonard illegally accessed the website of Zetaware, an oil and gas exploration software company that is a direct competitor of Platte River Associates. During the intrusion, Zetaware's password-protected files were downloaded via a wireless computer network in a Houston airport. Subsequent analysis by the FBI confirmed that Leonard used PRA assets and resources to intentionally access Zetaware's password-protected website without authorization, in an attempt to obtain confidential information.

On Nov. 7, 2008, Leonard chaired a PRA staff meeting where he led a discussion about a tentative plan to exploit and unlawfully use the downloaded Zetaware files for economic gain.

The Information charged the defendant with using a wireless network connection to access a password-protected computer website.

The Platte River Associates case was investigated by ICE. The Jay Leonard case was investigated by the FBI.

"Preventing sensitive technologies and information from being exported to prohibited countries is a primary mission area for ICE," said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. "ICE uses its unique customs law enforcement authorities and investigation skills to ensure that these sensitive technologies don't fall into the wrong hands." Copp oversees a four-state area, which includes Colorado.

"Trading with the enemy is a serious crime, and in this case, a Colorado company has been rightfully held accountable for committing that crime," said U.S. Attorney David Gaouette.

Assistant U.S. Attorney Bob Mydans, District of Colorado, prosecuted both cases.