When the HP pretexting scandal hit last summer, people were rightly stunned by the tactics used by the company to discover a boardroom leaker. After all, the company even spied on reporters. Now, BusinessWeek has a fascinating article on a case of corporate espionage that, frankly, makes the HP situation look like child's play. In 2005, a Russian conglomerate wanted to get some information on an investment fund in Bermuda. Through a series of deals, a firm called Diligence was hired to infiltrate the fund's auditor, KPMG. How they infiltrated the company was something straight out of a spy novel. First, they developed a profile of an employee at KPMG that would be likely to leak information. So, for example, a male in his mid-20s that liked to take risks and needed cash would serve as a likely leaker. For a woman, they were looking for "...a young female who is insecure, overweight, bitchy, not honest. Someone who spends money on her looks, clothes, gadgets. Has no boyfriend, and only superficial friends. Has a strong relationship with her mother." After Diligence settled on its inside man, it had one of its agents meet up with him, pretending to be from the British government, and claiming to need secret information on a matter of British national security. After a period when the two got to know each other, the proverbial canary started to sing. Soon the KPMG employee was handing over documents related to the Bermudan investment fund. For this he was awarded a Rolex watch, which he believed was a thank you gift from the British government. Eventually, the infiltration, dubbed Project Yucca, came to a halt once KPMG was anonymously given documents about the events. Naturally, KPMG sued Diligence and won $1.7 million in a settlement. Another suit, brought by the Bermudan fund, is still ongoing. Diligence insists that it acts within the parameters of the law where it operates, but the company obviously didn't think much of its chances at an actual trial, hence the settlement. The fact that companies engage in various shady activities to gain information on their competitors is not particularly surprising. But the fact that these operations so closely resemble spy stories -- complete with the profiles of a likely leaker -- is really quite incredible.
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