Computer contractor gets five years for $2M credit union theft

Insider threat case the second this week, following Terry Childs guilty verdict

For the second time this week , companies are getting a stark reminder of the danger posed to enterprise networks and assets by insiders with privileged access.

Zeldon Morris, a Provo, Utah computer contractor, was sentenced on Wednesday to more than five years in prison after pleading guilty to stealing close to $2 million from four credit unions that he performed IT services for.

Judge Clark Waddoups of the U.S. District Court for the District of Utah also ordered Morris to repay more than $1.8 million in restitution to his victims and to submit to five years of supervised release upon completion of his prison term.

In December, Morris had pleaded guilty to using his privileged computer access to steal money from Family First Federal Credit Union, Alpine Credit Union, Deseret First Credit Union, and First Credit Union.

News of Morris' sentencing came just one day after former San Francisco network administrator Terry Childs was found guilty on charges of locking up a key city network for days in 2008.

Childs' actions resulted in city officials losing administrative control of the network for more than 10 days. It also resulted in the city having to spend hundreds of thousands of dollars recovering from the disruption.

Both are examples of what security analysts have long said is the often under-estimated and overlooked danger posed by rouge insiders.

Morris was employed as a third-party contractor by Open Source Solutions Inc, a computer services firm in Provo. In that capacity, Morris was supposed to help the four credit unions upgrade their systems. As part of his job, he was given unrestricted local and remote access to the networks at the credit unions.

Morris used his access to initiate several fictitious Automated Clearing House (ACH) transactions, according to court documents describing the thefts at Family First Federal Credit Union. The transfers were deposited into bank accounts that Morris owned, including a business account that he operated jointly with a business partner.

Morris used fictitious or previously used ACH "racing numbers" to make the deposits into his accounts, court documents said.

In his guilty plea, Morris said that it was his "specialized knowledge" of the systems at the financial institutions that allowed him to pull off the thefts for about two years without being detected.

The money that was falsely transferred into Morris' account was later used to pay mortgage on two homes, pay off his car loans, and for repairs to his properties as well as for overseas vacations.

In all Morris admitted to stealing about $1.2 millions from First Family, about $82,000 from Alpine, about $635,000 from Deseret and $93,000 from First Credit.

According to court documents the thefts are likely to have gone unnoticed for some time if it had not been for Morris' partner who alerted Family First of unusually large ACH deposits being made into the joint business account.

The case is similar to countless others involving theft, sabotage and data compromise by insiders with privileged access to enterprise systems and networks. Security researchers have long maintained that rogue insiders pose a potentially greater threat than external hackers.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags hackersit servicestheft

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Jaikumar Vijayan

Computerworld (US)
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?