Punishment of Colorado Company for Embargo Violation

Department of Justice Press Release

For Immediate Release
September 17, 2009 United States Attorney's Office
District of Colorado
Contact: (303) 454-0100

Boulder Company Sentenced for "Trading with the Enemy"

DENVER—Platte River Associates, a Boulder company, was sentenced last week by Chief U.S. District Court Judge Wiley Y. Daniel to a fine of $14,500, for trading with the enemy, the U.S. Attorney’s Office, U.S. Immigration and Customs Enforcement, and the FBI announced. Platte River Associates was also ordered to pay a $400 special assessment to a victims of crime fund. The company had pled guilty through its corporate counsel to the trading with the enemy charge on October 3, 2008. They were originally charged by Information on July 15, 2008. They were sentenced on September 9, 2009.

In an unrelated case, the President of Platte River Associates, Jay E. Leonard, was sentenced to serve 12 months of supervised probation for unauthorized access of a protected computer. Leonard pled guilty on October 2, 2008, and was sentenced on December 16, 2008. He was originally charged with a misdemeanor in a separate Information on July 15, 2008.

According to the Information, as well as the stipulated facts contained in the plea agreements, Platte River Associates (PRA) sells software that aides in oil and gas exploration. On October 13, 1998, federal agents visited the Boulder office of PRA, putting them on notice that dealing either directly or indirectly with embargoed countries, including Cuba, is prohibited.

On August 1, 2000, a Spanish oil company called Repsol purchased PRA software. In October of 2000, a Repsol employee traveled to PRA’s Boulder office for software training. The Repsol representative brought with him data to be used in creating a model for oil and gas exploration on a laptop computer. PRA assigned a geologist to work with the Repsol employee. The Repsol employee told the geologist that the data being used for training was for a Cuban project. During the course of the training the president of PRA, Jay Leonard, learned that the data being used involved Cuban waters. There was no attempt on the part of PRA to stop providing the training. As the Repsol employee was leaving the United States, Customs seized his laptop computer. An analysis of the laptop revealed materials related to a potential Cuban project.

The Information charged the defendant corporation with providing specialized technical computer software and computer training, which was then used to create a model for the potential exploration and development of oil and gas within the territorial waters of Cuba, without first having obtained a license from the Secretary of the Treasury.

According to the Information charging Platte River Associates’ President Jay E. Leonard, as well as the stipulated facts in that plea agreement, on October 30, 2005, Leonard illegally accessed the website of Zetaware, an oil and gas exploration software company that is a direct competitor of Platte River Associates. During the intrusion, Zetaware’s password protected files were downloaded via a wireless computer network in the Houston, Texas International Airport. Subsequent analysis by the FBI confirmed that Leonard used PRA assets and resources to intentionally access Zetaware’s password-protected website without authorization, in an attempt to obtain confidential information.

On November 7, 2008, Leonard chaired a PRA staff meeting where he led a discussion about a tentative plan to exploit and unlawfully utilize the downloaded Zetaware files for economic gain.

The Information charged the defendant with using a wireless network connection to access a password protected computer website.

The Platte River Associates case was investigated by Immigration and Customs Enforcement (ICE). The Jay Leonard case was investigated by the Federal Bureau of Investigation (FBI).

“Trading with the enemy is a serious crime, and in this case, a Colorado company has been rightfully held accountable for committing that crime,” said United States Attorney David Gaouette.

“Preventing sensitive technologies and information from being exported to prohibited countries is a primary mission area for ICE,” said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. “ICE uses its unique customs law enforcement authorities and investigation skills to ensure that these sensitive technologies don’t fall into the wrong hands.” Copp oversees a four-state area, which includes Colorado.

Both cases were prosecuted by Assistant U.S. Attorney Bob Mydans.