RANDALL CHASE
Associated Press

WILMINGTON, Del. (AP) — Two members of an international hacking ring that gained access to a U.S. Army computer network while targeting computer giant Microsoft and several video game developers pleaded guilty to conspiracy charges Tuesday in federal court in Delaware.

David Pokora, 22, of Mississauga, Ontario, and Sanadodeh Nesheiwat, 28, of Washington, New Jersey, each pleaded guilty to a single count of conspiracy to commit computer fraud and copyright infringement. They face up to five years in prison when sentenced in January.

Prosecutors said the two men were part of a small group of gaming enthusiasts that called itself the Xbox Underground.

An 18-count superseding indictment that was returned by a grand jury in April and unsealed Tuesday also charges Nathan Leroux, 20, of Bowie, Maryland, and Austin Alcala, 18, of McCordsville, Indiana, with participating in the conspiracy. An Australian national whose name was not released also has been charged, and authorities, who are continuing their investigation, say roughly half-a-dozen other individuals may be involved.

According to prosecutors, the defendants stole more than $100 million in intellectual property and other proprietary data related to the Xbox One gaming console and Xbox Live online gaming system and popular video games such as “Call of Duty: Modern Warfare 3” and “Gears of War 3.”

“These were extremely sophisticated hackers…. Don’t be fooled by their ages,” Assistant U.S. Attorney Ed McAndrew said after Tuesday’s court hearing.

At the same time, McAndrew said, their method of compromising the computer systems of the companies was relatively basic: stealing the computer user names and passwords of employees and software development partners.

Once inside the companies’ computer networks, the conspirators accessed and stole unreleased software, software source code, trade secrets, copyrighted and prerelease works, and other information, authorities said. They also stole financial and other sensitive information relating to the companies, but not their customers, McAndrew told U.S. District Court Judge Gregory Sleet.

Prosecutors said the ring’s exploits included manufacturing and selling a counterfeit Xbox One gaming console before the unit’s official release and gaining access to an Army computer system for two months in late 2012 through their hacking of Zombie Studios, a Seattle-based video game company that was working with the Army on flight simulation software to train Apache helicopter pilots.

“As soon as they were notified, they addressed the particular manner in which they were branched,” McAndrew said when asked about the military’s response to the hacking.

McAndrew said FBI officials in Delaware were alerted to the hacking operation in January 2011 by a confidential informant, and that the gaming companies cooperated in the investigation. Authorities began obtaining arrest warrants last year, and Pokora, who McAndrew said was looked to by other group members as a leader, was taken into custody in March at a border crossing in Lewiston, New York.

Pokora’s plea is believed to be the first conviction of a foreign-based individual for hacking into U.S. businesses to steal trade secret information, authorities said.

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