Meet the Last Man Standing in the HP Spying Scandal
October 2006: Bryan Wagner, right, stands next to Matthew DePante and Ronald DeLia, in a San Jose, California, courtroom. Photo: AP/Paul Sakuma
The final chapter in the pretexting scandal that rocked Hewlett-Packard, once one of Silicon Valley’s most esteemed companies, is drawing to a close.
Bryan Wagner is getting set to be sentenced in federal court in San Jose, California. He’s the low-level private investigator who was charged with pretending to be a Wall Street Journal reporter in order to obtain telephone records. This sort of illegal false identify scheme is known as pretexting.
His sentencing hearing is set for Nov. 1, but after nearly six years of delays, it’s likely to be put off yet again. The reason? Wagner pleaded guilty so long ago that the Probation Office’s pre-sentence report is now out of date, and the judge has ordered an update.
HP was once considered the gold standard of high technology companies, but the pretexting scandal shadowed the tech giant’s precipitous fall from grace. In fact, HP seems to have done nothing but stumble since the incident, which stemmed from HP Chairwoman Patricia Dunn’s ill-advised efforts to stop boardroom leaks to journalists. The company has cycled through two CEOs since the scandal — Mark Hurd and Leo Apotheker — and it continues to see its business prospects shrink. Last month, HP said it planned to lay off nearly 30,000 employees over the next two years.
Although Dunn did at one point face criminal prosecution, the charges against her were eventually dropped. She died last year. No HP executive has been convicted of any criminal activity in the case.
The company did pay a $14.5 million fine to the state of California, but that’s a “pretty light” punishment, given the wrongdoing, says Terry Gross, a San Francisco attorney who represented reporters who were victims of the pretexting. “HP is an incredibly wealthy company,” he says. “$14.5 million is almost nothing to it.”
The wheels of justice have also moved pretty slowly. The case has switched prosecutors in the years since the California Attorney General, and then ultimately the U.S. Department of Justice took an interest in the matter.
Although the scandal captured the national spotlight for a time and even prompted a Congressional investigation, “It has ended with less a bang than a whimper,” said one person familiar with the case who spoke on condition of anonymity.
Wagner pleaded guilty to conspiracy and aggravated identity theft charges nearly six years ago, but his sentencing has been postponed as the court has finished up cases against the two men who hired him: Joseph DePante and his son Mathew DePante. They were sentenced in July to three years of probation and six months of electronic monitoring.
The DePantes pleaded guilty to conspiracy charges, but with the aggravated identity theft count, Wagner is facing a tougher go of things. Aggravated identity theft comes with a minimum two-year prison sentence.
Representatives from the DePantes’ company, Action Research Group, faxed Wagner and others the social security numbers of the pretexting victims and then Wagner and a business associate Cassandra Selvage actually called up the telephone companies to obtain phone records, according to Joseph and Matthew Depante’s plea agreements.
Action Research Group grossed between $20,000 and $30,000 in the scheme, the plea agreements state.
In 2006, after learning that he could be the subject of a criminal investigation, Wagner allegedly took his a hammer to his computer and “destroyed,” his hard drive, according to a report in The Wall Street Journal.
Through his lawyer, Federal Public Defender Cynthia Lie, Wagner declined to comment for this story. Spokesmen for the U.S. Department of Justice did not return messages seeking comment for this story.
By on 04/11/2012