07-19-06 -- Duronio, Roger -- Conviction -- News Release
Jury Convicts Former UBS Computer Systems Manager for Unleashing "Logic Bomb" on Company Network
NEWARK, N.J. – A federal jury today convicted a disgruntled former UBS Paine Webber systems administrator of securities and computer fraud connected to his use of a malicious code, known as a “logic bomb,” that disrupted the company’s operations and caused more than $3 million in damage and repair costs to the UBS computer network, U.S. Attorney Christopher J. Christie announced.
The jury, which was in its fourth day of deliberations, found Roger Duronio, 63, of Bogota, N.J., guilty of one count of securities fraud and one count of fraud and related activity in connection with computers (computer fraud). The jury acquitted Duronio of two counts of mail fraud
Testimony in the trial before U.S. District Judge Joseph A. Greenaway, Jr. began on June 6. Sentencing was scheduled for Oct. 30, and Duronio remains free on a $1 million secured bond.
The securities fraud count related to Duronio’s purchase of put option contracts which he bought on the belief that the widespread damage he would inflict with the logic bomb would cause UBS Paine Webber’s stock price to drop steeply. (In fact, the stock remained stable after the logic bomb was unleashed, and Duronio lost all of his $23,000 investment, according to trial testimony.)
Trial testimony revealed that Duronio’s motive was that he was angry with the company, where he had worked for nearly two years, because the $32,500 annual bonus he received in 2002 was less than the $50,000 he was expecting.
“Duronio was malicious, angry and calculating,” said Christie. “He was perfectly situated as a systems administrator to turn his skill into a weapon against the company. We’re pleased the jury recognized this and are gratified by the verdict.”
The securities fraud conviction carries a maximum penalty of 10 years in prison. The conviction for Fraud and Related Activity In Connection with Computers carries the same maximum prison sentence.
Under the advisory U.S. Sentencing Guidelines, Duronio faces a probable sentencing range of between 78 and 97 months in federal prison on the counts of conviction, though Judge Greenaway is not bound by the Sentencing Guidelines. There is no parole in the federal system.
Duronio worked at PaineWebber’s offices in Weehawken, N.J., and was with the company for two years while he served as a system administrator. He planted the logic bomb in some 1,000 of PaineWebber’s approximately 1,500 networked computers in branch offices around the country. Duronio, who repeatedly expressed dissatisfaction with his salary and bonuses at Paine Webber, resigned from the company on Feb. 22, 2002.
Testimony and evidence at trial revealed that on March 4, 2002, the logic bomb “detonated” as Duronio planned and began deleting files on over 1,000 UBS PaineWebber computers. According to expert witness testimony for the government, the Duronio computer-user account was used to create, modify, disseminate and install the logic bomb on the UBS computers. There was also a direct link from Duronio’s home computer to the creation of the logic bomb.
It cost PaineWebber more than $3 million to assess and repair the damage.
In anticipation that the stock price of UBS PaineWebber’s parent company, UBS, A.G., would decline in response to damage caused by the logic bomb, Duronio also purchased more than $21,000 in “put option” contracts for UBS, A.G.'s stock. A put option is a type of security that increases in value when a stock price drops. Market conditions at the time suggest there was no such impact on the UBS, A.G. stock price.
Trial testimony revealed that the day the defendant quit his job from UBS he walked out of their offices and straight to his broker’s office to bet against UBS. Duronio’s broker, Gerry Speziale, testified that an angry Duronio came to his office and said words to the effect, “God knows what I can do to get even.”
Another broker testified that Duronio was adamant that he wanted to bet $20,000 that the company’s stock would plummet within a few days, despite the broker’s advice that the strategy was risky and potentially disastrous. Duronio placed his last trade on March 1, 2002, and the logic bomb attack occurred on March 4, 2002 at 9:30 a.m.
PaineWebber promptly reported what had happened to government investigators and the U.S. Attorney’s Office, and cooperated during the investigation and the trial, in which several employees testified for the government about the damage Duronio inflicted.
Christie credited Special Agents of the U.S. Secret Service’s Electronic Crimes Task Force, under the direction of David O’Connor, Special Agent in Charge of the Secret Service in New Jersey, with bringing the case against Duronio. Christie also credited the assistance of UBS PaineWebber in the investigation and cooperation during the trial.
-end-
Defense Counsel: Christopher Adams, Esq. Roseland