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Man Charged With Stealing Code From Federal Reserve Bank

wiredmikey writes "A Chinese computer programmer was arrested by U.S. authorities in New York on Wednesday, on charges that he stole proprietary source code while working on a project at the Federal Reserve Bank of New York. The man arrested, Bo Zhang of New York, worked as a contract employee developing a specific portion of the GWA's (Government-Wide Accounting and Reporting Program) source code at the Federal Reserve Bank of New York where the code is maintained. The complaint alleges that in the summer of 2011, Zhang stole the GWA code, something he admitted to in July 2011. Zhang said that he used the GWA Code in connection with a private business he ran training individuals in computer programming."

43 of 199 comments (clear)

  1. Lesson 1 by ackthpt · · Score: 4, Funny

    Don't steal from the government - it hates the competition

    --

    A feeling of having made the same mistake before: Deja Foobar
    1. Re:Lesson 1 by ThatsMyNick · · Score: 4, Insightful

      Fed is not part of the government. Its a private entity controlled by the members.

    2. Re:Lesson 1 by redmid17 · · Score: 5, Informative

      The people who run the Fed are largely appointed by the President and confirmed by the Senate

    3. Re:Lesson 1 by Oxford_Comma_Lover · · Score: 3, Interesting

      The Fed is as close to godhood as one gets in public life. You only serve for fourteen years (unlike federal judges), but you also make the money. I suppose the Fed could be abolished, but short of that, you're pretty much set.

      --
      -- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
    4. Re:Lesson 1 by The+Grim+Reefer · · Score: 2

      Don't steal from the government - it hates the competition

      I realize that you are joking. But it makes me wonder why so many on /. would consider this "stealing". Especially when the majority will argue the semantics of stealing when it's regarding music or entertainment data. Less than three hours prior to this,the Megaupload story has many defending piracy. Granted, the ramifications of people being arrested outside of the US for piracy is scary. But still, what's the difference between the bits that were taken for the banking code and bits taken for entertainment?

    5. Re:Lesson 1 by hedwards · · Score: 5, Informative

      The Federal Reserve does not print or issue money. Never have and hopefully never will. Those bills are printed by the Bureau of Engraving and Printing and the coinage is minted by the United States Mint.

      The Federal Reserve only puts them into circulation when the Board of Governors authorizes it to do so. It is a bit complicated, but the Federal Reserve itself is a private entity that happens to have a board of publicly appointed figures.

    6. Re:Lesson 1 by icebraining · · Score: 2

      He had a contract with the organization from whom he copied the code, which (implictly or explicitly) covers that he couldn't do this.

      People downloading from Megaupload haven't signed anything agreeing not to copy such files.

    7. Re:Lesson 1 by ThatsMyNick · · Score: 3, Insightful

      The Board of Governors are appointed by the President and their salaries are set by the govt, but the input with which the Fed takes decisions is largely from the member banks. Its one of those strange public-private partnerships, that I would consider mostly private.
       
        And It goes without saying that the board of governors are usually former Wallstreet barons.

    8. Re:Lesson 1 by ThatsMyNick · · Score: 2

      From the wiki (the one you linked) : The Federal Reserve System has both private and public components, and was designed to serve the interests of both the general public and private bankers. The result is a structure that is considered unique among central banks. It is also unusual in that an entity outside of the central bank, namely the United States Department of the Treasury, creates the currency used.[12]

      Also from the wiki "According to the Board of Governors, the Federal Reserve is independent within government". Just because the board of governors consider themselves to be part of the govt, doesnt mean they are part of the govt. Its like IBM saying it wants to make peoples life better.

    9. Re:Lesson 1 by Pharmboy · · Score: 5, Insightful

      In addition to your comment, the source code was never available for sale to any other party. It wasn't "infringement" in that it cost the Fed lost sales, it lost them exclusive access to sensitive data that they only wanted a limited number of people to have access to. The financial loss isn't related to lost sales, but in potential security implications. Apples and Oranges.

      In this case, it was more like theft because the Fed lost exclusive use of the software, something that can't be given back once it is in the wild. Piracy is completely different, where 100 copies of a file can cost lost sales of 1 or 2 actual copies, but no loss of use or security is involved, only revenue. With music and movies, you WANT many people to have access to the product, but at a cost. With exclusive software, you want NO ONE to have a copy. Neither is ideal if you own the "property", but they aren't the same.

      --
      Tequila: It's not just for breakfast anymore!
    10. Re:Lesson 1 by Lando · · Score: 2

      No they are one of the 9? independent agencies within the government that are directly overseen by congress and not a secretary or member of the executive branch. Wikipedia is a starting point, not an authority on any subject since anyone can go in and change things however they want. I provided the link as a place to get started, not as part of my argument. I barely glanced at the information on the page having researched this a couple of years ago. If nothing else the link to the official government webpage should be there somewhere or the associated pages linked to the article. I don't really have the time to argue the point either way. If you are interested in it, read up on the subject, don't just read to confirm your own viewpoint.

      --
      /* TODO: Spawn child process, interest child in technology, have child write a new sig */
    11. Re:Lesson 1 by nedlohs · · Score: 5, Interesting

      So if the Federal Reserve doesn't "issue money" can you explain the word issue in:

      Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized.

      - US Code, Title 12 Chapter 3 Subchapter XII Section 411 - http://www.law.cornell.edu/uscode/12/411.html

      Or are you just sticking to a technically that the Board isn't the Fed, so the Microsoft Board of Directors doesn't count as Microsoft for example.

      Or that having the power to direct something to be done isn't the same as doing it - so that whole gulf oil thing a while back has isn't BHPs problem after all they just told their contractors and employees to do it.

    12. Re:Lesson 1 by Oligonicella · · Score: 3, Insightful

      "In this case, it was more like theft because the Fed lost exclusive use of the software, something that can't be given back once it is in the wild. Piracy is completely different..."

      Nope. Piracy is the loss of your right to distribute your material as you see fit because some numbnuts thinks his desires trump your copyright. Copyright is not about revenue. Once disbursed into the wild, it can't be called back either. More same than not.

    13. Re:Lesson 1 by Cyberax · · Score: 2

      "So, why exactly does the government pay intrest for that money?"

      To discourage extra spending.

      "And what does the intrest is spent by the FED?"

      That's an awkward bit - it turns its profits to the US Treasury. Does that make sense to you? Me neither.

      FED is a bit of arcane entity - it's a public institution that uses private banks as its components. A lot of other countries simply have a specialized central bank, but the US has this distributed system.

  2. Citizenship not required? by magarity · · Score: 4, Interesting

    Every government IT job like this I've ever seen has US citizenship required, not even green card required. How did this guy get in?

    1. Re:Citizenship not required? by ToadProphet · · Score: 3, Informative

      The Bloomberg article states that he's a Chinese citizen in the US on a work visa

      --
      It's on America's tortured brow, That Mickey Mouse has grown up a cow
    2. Re:Citizenship not required? by MrEricSir · · Score: 5, Funny

      Initech has had trouble finding people who can write bank software lately, especially after their building burned down.

      --
      There's no -1 for "I don't get it."
    3. Re:Citizenship not required? by PPH · · Score: 2

      He knows COBOL? Pardon him and hire him immediately!

      --
      Have gnu, will travel.
    4. Re:Citizenship not required? by RenderSeven · · Score: 3, Informative

      The story says that he's Chinese, not that he's a Chinese citizen.

      The Bloomberg article states that he is in fact a Chinese citizen

      since he "stole" the code for his own private training business

      No, he claims he stole it for his own private business. May or may not be true, but it sure sounds better than admitting espionage.

    5. Re:Citizenship not required? by WindBourne · · Score: 4, Informative

      Zhang is a Chinese citizen, said a person with knowledge of the matter who didn’t want to be identified because the information wasn’t public.
      The software system relates to the “tracking of the billions of dollars that are electronically transferred every day in the U.S.’s general ledger,” prosecutors said.
      Zhang has been in the U.S. on a work visa since 2000, said another person familiar with the matter who also didn’t want to be identified because the information isn’t public.

      Kind of destroys your theory there.

      --
      I prefer the "u" in honour as it seems to be missing these days.
  3. Lesson: read what you sign by RightwingNutjob · · Score: 3, Insightful

    I work in a place that makes you sign an NDA. Betcha he had to sign one too. Whether blueprints or code, industrial espionage is a real crime, both morally and legally.

  4. Re:With people like these... by EEPROMS · · Score: 2, Funny

    1. this has nothing to do with China 2. USA is just as bad as China when it comes to covert internet access, just that China doesn't run around complaining like a little girl when it happens.

  5. Re:Why? by tomhath · · Score: 4, Insightful

    FTA: "he used the GWA Code in connection with a private business he ran training individuals in computer programming" Training individuals who are interested in the Fed's software? Now who (cough) would be interested in that?

  6. Really? by wbr1 · · Score: 5, Informative

    Zhang said that he used the GWA Code in connection with a private business he ran training individuals in computer programming.

    Correctly edited version: Zhang said that he used the GWA Code in connection with a private business he ran training Chinese Hackers in Reserve Bank Code.

    --
    Silence is a state of mime.
  7. Re:With people like these... by ackthpt · · Score: 4, Insightful

    Is it a wonder that there is a growing contempt for China and its actions?

    I believe we've gone way past the "three times is enemy action" for incidents like these.

    Sensationalism by the author, playing to the xenophobic among the indigenous readership. It should have been 'Programmer Steals Code ..' Not 'Chinese Programmer Steals Code ...'

    Now, if he were an agent of the PRC, a point of nationality would be highly relevant, but in this case it does not serve fair news reporting.

    --

    A feeling of having made the same mistake before: Deja Foobar
  8. Nothing Interesting by brainzach · · Score: 2

    “Government-Wide Accounting and Reporting Program” (GWA), a software system owned by the Department of the Treasury that is used mainly to manage central accounting and reporting functions and processes associated with budget execution, accountability, and asset management.

    Just sounds like some average bloated corporate code that was stolen. Nothing noteworthy.

  9. Re:With people like these... by Oxford_Comma_Lover · · Score: 2

    2. USA is just as bad as China when it comes to covert internet access, just that China doesn't run around complaining like a little girl when it happens.

    I can't decide if this is misogynist, bully-ist, antidemocratic, or just silly.

    Your other point is good, though. It's a guy teaching. I don't have any problem with him using the code, he just should have asked permission and they should have been willing to give it to him. Problem is they see it as something it's worth making an example over--possibly destroying his life because he didn't see a problem with using a snippet of code that, in all likelihood, it was not a problem to use.

    --
    -- IANAL, this isn't legal advice, and definitely isn't legal advice for you. Also, Squee!
  10. meanwhile just a handful of hours away by Osgeld · · Score: 4, Interesting

    There is an unemployed American programmer begging for minimum wage temporary night shift job, and eating spaghetti for the 4th night in a row, meanwhile these shits are hiring Chinese contractors

    God bless America!

  11. Maybe better background checks? by Karmashock · · Score: 2, Insightful

    Seems every other day we're hearing about some chinese scientist or programmer that steals US proprietary secrets of some kind. Why does this keep happening? I thought the whole point of a background check was to avoid this sort of thing. Review where you f'ed up in the background check. See what you knew at the start that should have been a red flag and then add it to the disqualified list. If you were fooled at that point or didn't get enough information then see to it that you're harder to fool and gather more information. This is just sad.

    Do your damn background checks.

    --
    I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
    1. Re:Maybe better background checks? by Nerdfest · · Score: 3, Insightful

      You can do all the background checks you want. If a representative of the Chinese government says "Here's 20K$ to hand us some code", a very large percentage of people will say "Deal". If a representative of the Chinese government says "hand us the code you work on, or your relatives in China disappear", a very large percentage of people will say "what sort of media would you like it on".

    2. Re:Maybe better background checks? by Karmashock · · Score: 2

      Background checks scan for both qualities.

      First, they look for people that don't have pride in their personal honor and integrity. Ideally, you're looking for people that will not violate their oaths because they have deep seated principles. This is detectable.

      Second, you disqualify anyone that has weaknesses. Drunks, drug addicts, gamblers, womanizers, people with family in countries where pressure could be put on them, connections to organized crime, any connection to fringe political organizations, membership in weird religions, odd personal beliefs of any kind... etc.

      And that's just the start of it. Do background check and don't be afraid to simply bump people out for not meeting them. It's not like you've said they're bad people. You've just disqualified them from that position. Get lax about it and you're going to have problems. Simple as that.

      --
      I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
  12. Re:With people like these... by Osgeld · · Score: 4, Insightful

    I have more contempt for the fuck that hired a Chinese contractor to work on government systems while people are begging for jobs here

  13. Mr. Bo Zhang-gles? by Anonymous Coward · · Score: 4, Funny

    Did he steal the code and dance out of the place?

  14. Re:With people like these... by Gadget_Guy · · Score: 3, Insightful

    Is it a wonder that there is a growing contempt for China and its actions?

    If all it takes is for one citizen to copy a bit of code for you to hold his country in contempt, then you must really hate America after all those people lost billions of dollars in the Enron scandal. Of course, I chose the Enron example at random, but there are probably thousands of criminal acts occurring across the country every day. If you are going to just single out the ones committed by people of Chinese decent then think that says more about you than China.

  15. China thanks you by WindBourne · · Score: 2, Insightful

    America is LOADED with Chinese spies. China is in a cold war with the west, and the west is disregarding it. Sad.

    --
    I prefer the "u" in honour as it seems to be missing these days.
  16. Racists by digitallife · · Score: 5, Informative

    Holy f#ck people are racist on here.
    The dude was using some code he wrote to train people. Can we assume guilt of something *after guilt has been proven*? Pretty please?

    1. Re:Racists by WindBourne · · Score: 4, Interesting
      --
      I prefer the "u" in honour as it seems to be missing these days.
  17. Re:Blown out of proportion by WindBourne · · Score: 2

    The same Goldman Sachs and BOA that were cracked after he worked there?

    --
    I prefer the "u" in honour as it seems to be missing these days.
  18. they issue electronic money all the time by decora · · Score: 2

    soooooo yeah.

  19. please for the love of god read more books by decora · · Score: 2

    if you would read Henry Paulson's "On the Brink" he specifically talks about how the Russian government tried to do EXACTLY this in 2008 with the help of the Chinese government. But the Chinese government told the Russians to fuck off and die in a fire. Why ?Partly because Henry Paulson had been the CEO of Goldman Sachs and heavily involved in China for the past several years, . . . his book mentions far more discussions with Chinese leaders during the crash of 2008 than he mentions people like Dick Cheney or even George Bush.

    none of this has anything to do with 'hackers' or 'source code'.

  20. Re:With people like these... by hitmark · · Score: 2

    then USA has a very serious problem on their hands.

    --
    comment first, facts later. http://chem.tufts.edu/AnswersInScience/RelativityofWrong.htm
  21. Re:CALING BS (AGAIN) by theNAM666 · · Score: 4, Insightful

    I might suggest you read my comment history, if you think I'm in middle school, my friend.

    I didn't suggest that you *work* for the Geek Squad. I suggested that anyone hungry and with half a clue could steal the Geek Squad's lunch.

    More seriously, I get these sort of "jobs" from friends all the time. My bartender approached me last night, and said he took his virus-crashed laptop to Best Buy and they quoted him $400 to move the files off and to his new Mac. He told me he'd give me $200 to do the job-- adding that he had certain files with his wife that were, shall we say, "private" in nature and he didn't trust Best Buy to deal with.

    That kind of work is everywhere. If the Geek Squad is charging $100/hr to do very basic tech (setting up DVRs, etc) then you can undercut that-- and provide a professional relationship. It's not work I really want-- but how you beat the big corporate guys, is by providing a better price point, and a better service. Get a $700 suit for $300 on OverStock, treat your customers well, communicate with them in standard written English, establish trust and security. Kiss their rumps if you have to, if you're eating Ramen.

    In the end, I don't mean to insult you if your situation is hard. But I'm not going to accept BS, either. If you're not in the sticks where there's no market-- if you are somewhere where there's Best Buy and Comp USA-- then surely, you can still find people with money, who will pay Best Buy if they have no other choice, and take that business. And provide a better value.

    As far as this guy-- c'mon. Your proposition is silly. The US Federal government is a damn Dilbert mess, sure, but if they could hire a US-native programmer for the same price (don't assume this guy is a low-ball salary) or even 50% more, they'd probably do so. The talent isn't there.

    Of course, that's also a failure of the US Educational system. I'm probably more pissed than you about that, and I understand that the US isn't providing as much educational investment and opportunity for young people, as, for instance, China. But the young in the US also have an enormous sense of entitlement, of wishing and thinking they should get something for nothing.

    I worked hard in College and grad school. I put in the 80+ hour weeks, and I still do. I've lived in CA-- if you can't downsize enough to live on $45K in the Mission, or Berkeley (or the burbs), c'mon, $45K is still a lot of money. I've made 100x that in a year, and I've lived on a quarter of that in other years. Adjust to your means and make the best of it-- if you can't pull in $45K, then don't try to live a $45K lifesytle.

  22. fixed it for you by Shakrai · · Score: 4, Funny

    but is nothing close to the millions you can steal on Wall Street.

    --
    I want peace on earth and goodwill toward man.
    We are the United States Government! We don't do that sort of thing.