“AtHomeNet Violates Computer Fraud and Abuse Act”, Final Judgment by Federal Court

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AtHomeNet, Inc. (http://www.AtHomeNet.com), homeowners association Web site provider, has been judged responsible for violations of the Computer Fraud and Abuse Act by the United States 10th District Court for the District of Colorado, Case No. 10-cv-0109-CMA-MEH, according to AssociationVoice. The Federal statute, enacted as a criminal statute to prosecute hackers, also applies to acts of cyber theft.

The Judgment was entered against AtHomeNet and its owners Susan Sanders and Jeff Sanders for their having “knowingly and with intent to defraud” (i) unlawfully subscribed to AssociationVoice (http://www.AssociationVoice.com) services and obtained access to secured administration areas reserved for legitimate clients. AtHomeNet then used that information for competitive purposes. (ii)

Drew Regitz, co-founder and President of AssociationVoice, commented: “It was clearly our obligation to protect the interests of our clients, our company, and to uphold the ethics our industry aspires to. It is unfortunate that a competitor so flagrantly violated Federal Law and did so with an attitude of ‘no big deal’.”

AtHomeNet, under the direction of its owners and with the participation of several of their employees, created a fictitious homeowners association and then used that fictitious homeowners association to fraudulently subscribe to AssociationVoice’s services. (iii) In order to disguise their unlawful scheme, AtHomeNet instructed employees to play the role of Board Members and to pose as other homeowner association staff members while using their own clients’ documents and information as cover. At this time, it is unclear if their clients have been made aware of the use of their documents and information.

Over the time that AtHomeNet’s scheme was in place, there were over eighty logins from the AtHomeNet offices and owners’ personal residence into secured administration areas for the fictitious homeowners association. (iv) Additionally, dozens of calls and emails were logged to AssociationVoice’s Support services with questions seeking information concerning AssociationVoice’s proprietary technology, advanced features, and development plans. Among the emails discovered during the litigation was one from one of AtHomeNet’s owners and its CEO, Susan Sanders, referring to Jeff Sanders, another of AtHomeNet’s owners and its Chief Technology Officer, responding to a question from one of the employees involved with the scheme as to whether AtHomeNet should renew its fraudulently obtained subscription. Mrs. Sanders’ email answers that the subscription should be renewed because “Jeff uses it for development purposes”. (v)

In issuing its Final Judgment, the Colorado Federal Court made permanent its Preliminary Injunction ruling where the Court stated that AtHomeNet and the Sanders’ had “exhibited a willingness to engage in improper conduct to obtain protected information” and had “unlawfully obtained valuable information concerning Plaintiff’s software application” and that “there was nothing to indicate to the Court that Defendants will not engage in similar conduct in the future, if left to their own devices.” (vi) Hence the Injunction is now permanent and bars AtHomeNet, the Sanders, their employees, and those people in active concert or participation with them from using information they gained through their illegal access to secured administration areas of AssociationVoice’s application, for any purpose, including but not limited to, the preparation and distribution of marketing materials, responding to prospective and existing customer inquiries, and the design and development of AtHomeNet’s application. (vii)

In addition to judgment being entered against AtHomeNet for its violations of federal law, in particular, the Computer Fraud and Abuse Act, and in addition to judgment also being entered against AtHomeNet for having breached its contractual covenants, and in addition to the Court entering a Permanent Injunction against AtHomeNet, AtHomeNet also paid a four hundred and fifty thousand dollar ($450,000.00) cash settlement to AssociationVoice in exchange for AssociationVoice’s agreement to dismiss yet other claims such as the copying of features and functions unique to AssociationVoice’s application that it had been prosecuting against AtHomeNet. (viii)

If you have further questions, please let us know so we may provide you with further information. To view more information regarding this matter, please visit, http://www.associationvoice.com/AtHomeNet-charged-with-Violation-of-Computer-Fraud-and-Abuse-Act,-Civil-Conspiracy,-et-al~282825~61.htm. The official Court Filings, Settlement Agreement, and Court Orders have been provided below if you wish to view them in their entirety.

About AssociationVoice:
Founded in 2000 and headquartered in Denver, CO, AssociationVoice provides a first rate Web presence to nearly 10,000 community associations and management companies with advanced features that enable them to streamline business operations and increase resident interaction and communication. AssociationVoice Web sites and software solutions are designed by industry experts utilizing world-class Internet-based technologies. AssociationVoice offers ongoing training and support and highly intuitive, user-friendly interfaces so that even those lacking technical expertise will find it easy to conduct community association business online. AssociationVoice is a professionally and securely hosted solution available in Lite, Professional and Enterprise Editions, as well as the new Building Edition. All solutions are backed by a 90-day 100% Satisfaction Guarantee. Find out more at: http://www.AssociationVoice.com.

Footnotes:
i Final Judgment Entered Against AtHomeNet in the United States District Court for the District of Colorado, p.2, ¶ 2, subsection c. The official Court’s Final Judgment may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/athomenet-violates-computer-fraud-and-abuse-act-final-judgment.pdf&sfind=&print=1&docid=687015.

ii Plaintiff’s Motion for Partial Summary Judgment on Computer Fraud and Abuse Act Claims, p. 5, ¶ 14. The official court filing may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/plaintiffs%20motion%20for%20partial%20summary%20judgment.pdf&sfind=&print=1&docid=690001.

iii Plaintiff’s Motion for Partial Summary Judgment on Computer Fraud and Abuse Act Claims, p. 3, ¶ 7. The official court filing may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/plaintiffs%20motion%20for%20partial%20summary%20judgment.pdf&sfind=&print=1&docid=690001.

iv Plaintiff’s Motion for Partial Summary Judgment on Computer Fraud and Abuse Act Claims, p. 4, ¶ 11. The official court filing may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/plaintiffs%20motion%20for%20partial%20summary%20judgment.pdf&sfind=&print=1&docid=690001.

v Plaintiff’s Motion for Partial Summary Judgment on Computer Fraud and Abuse Act Claims, p. 5, ¶ 15. The official court filing may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/plaintiffs%20motion%20for%20partial%20summary%20judgment.pdf&sfind=&print=1&docid=690001.

vi Preliminary Injunction Order, p. 25, ¶ 2. The Preliminary Injunction Order may be viewed at http://www.associationvoice.com/link/AtHomeNet-Ordered-By-Federal-Court-To-Cease-and-Desist~329391~61.htm.

vii Final Judgment Entered Against AtHomeNet in the United States District Court for the District of Colorado, p.4, ¶ 10. The official Court’s Final Judgment may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/athomenet-violates-computer-fraud-and-abuse-act-final-judgment.pdf&sfind=&print=1&docid=687015.

viii Settlement Agreement, p.1 ¶ 5. The Settlement Agreement may be viewed at http://www.associationvoice.com/doc/AdobeViewer.asp?doc_filename=/hoa/associ/documents/settlement%20agreement.pdf&sfind=&print=1&docid=690007.

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Noelle Klehr
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