United States Chess Federation Embroiled in Computer Fraud Prosecution

Last week the federal district court in Northern California downgraded felony Computer Fraud and Abuse Act (“CFAA”) counts to misdemeanors against Gregory Alexander who is charged with accessing “on thirty-four separate occasions . . . without authorization, the Yahoo! email account of Randall Hough, one of the board members of the United States Chess Federation (“USCF”).” U.S. v. Alexander, 2010 WL 3238961 *1 (N.D. Ca. Aug. 16, 2010). In opposing Alexander’s motion to dismiss the felony counts, the government’s papers described “how Alexander’s action were part of an internal power struggle among the USCF members.”

In reviewing the indictment the court observed that it “as factually and legally deficient as any the court has seen in its experience.” Id. This deficiency stemmed from the fact that the indictment charged 34 felony counts of Title 18, U.S.C., § 1030(a)(2)(c) of the CFAA for intentionally accessing a computer without authorization or exceeding authorized access and obtaining information. However, this section of the CFAA is a misdemeanor unless the government establishes pursuant to § 1030(c)(2)(B) that

(I) the offense was committed for purposes of commercial advantage or private financial gain;
(ii) the offense was committed in furtherance of any criminal or tortious act in violation of the Constitution or laws of the United States or of any State; or
(iii) the value of the information obtained exceeds $5,000

The felony/misdemeanor distinction is significant since a felony carries a maximum sentence of 5 years in prison as opposed to 1 year for a misdemeanor.

The court held that the indictment failed to invoke this felony provision by alleging the requisite tortious or criminal conduct. Id. The court viewed this failure as an obvious oversight “for which the government, at the hearing on the motion, had no explanation.” Id. Thus, the court concluded that the indictment filed against Gregory only alleged misdemeanors as opposed to felonies and gave the government 30 days to “inform defendant and the court whether it intends to seek a superseding indictment or proceed on the remaining thirty-four misdemeanor counts for violations of the CFAA.” Id. at *2.