Cops: Basalt roofing company hacked competitor, sabotaged bids
December 7, 2017
The owner of a Basalt roofing company and one of his supervisors allegedly hacked a competitor's computer files earlier this year and used the information to undercut and sabotage the company's bids for jobs, according to court files and police reports.
Gregg Mackey, the owner of Red Eagle Roofing, turned himself in Thursday at the Pitkin County Jail and was charged with computer crime, a high-level felony charge on par with second-degree murder.
Mackey's lawyer said Thursday his client did not know about the hacking and blamed a former employee for the illegal activity.
"He unequivocally denies directing, orchestrating or scheming to engage in hacking a competitor's business," Aspen attorney Ryan Kalamaya said. "He didn't realize the (hacked) information was being used on bids. Once he realized that, he immediately fired (the former employee responsible)."
That former Red Eagle employee, Richard Acerra, is facing the same computer crime charge and was supposed to turn himself in by Friday, said Brad Gibson, an investigator with the Pitkin County Sheriff's Office.
Acerra, however, placed the blame squarely on Mackey's shoulders in a brief phone interview Thursday.
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"That direction (to hack the bids) came from the owner, Gregg Mackey," Acerra said. "Gregg was fully aware of everything. I'm being railroaded — you can print that."
Acerra said he would turn himself in at the jail today.
The situation first came to the attention of law enforcement in early August, when the owner of Umbrella Roofing in Basalt, Trevor Cannon, reported the alleged hacking, according to an arrest warrant affidavit filed in Pitkin County District Court and Sheriff's Office reports.
"Cannon said Red Eagle had complete access to everything Umbrella Roofing worked on for the last six months," the sheriff's reports state. "Cannon told me Umbrella Roofing ran $6 million worth of bids through the … software in that time."
In August, Cannon said a former Red Eagle employee had begun working for him as a project manager six months before. The project manager stored his passwords for Umbrella's software system that kept track of the company's roofing bids on cloud-based management software, according to the documents.
Someone — possibly Mackey — at Red Eagle was then able to guess the project manager's password to the cloud-based system, which allowed Red Eagle access to Umbrella's roofing bids between February and August, according to the affidavit and sheriff's reports.
"(The former Red Eagle employee) said Mackey knows he uses the same passwords for several programs and Mackey apparently was able to guess the password for (the employee's Umbrella bid software) login," the sheriff's report states.
In June, Red Eagle Roofing hired a new estimator to measure roofs and create roofing estimates for potential customers. The estimator told investigators that on his second day on the job, Acerra walked him through the process of completing Red Eagle's bids, according to the reports.
The process entailed pulling up Umbrella Roofing's software on the new employee's laptop and instructing him to plug in any address Red Eagle was planning to bid on to see if Umbrella was planning to bid on the same job, the reports state.
"(The new employee) said Acerra told him to undercut Umbrella Roofing's bid by 7 percent," the reports state. "(The new employee) said he told Acerra, 'Sir, I'm not doing that.'"
The next day, the new employee went to Mackey and told him what Acerra directed him to do, saying he didn't feel comfortable with the arrangement, the reports state.
"Oh man, we don't do that," Mackey said, according to the new employee quoted in sheriff's reports. "That is not right! I'll make sure it's fixed, and I don't believe that's happening."
Two weeks later, Acerra sent out two bids for roofing jobs in Snowmass Village based on Umbrella Roofing's estimates, according to the reports. One of the bids was $1,000 below Umbrella's, while the second was $30,000 below Umbrella's bid, the reports state. The $30,000 was almost exactly 7 percent below Umbrella's bid, according to the reports.
The new employee again confronted Mackey with the scheme, saying it was a felony "and he felt he was doing something illegal," according to the sheriff's reports.
Mackey told the employee he would get a new computer and that his current laptop would no longer be used. A week later, the same computer was still in the office, the reports state.
The employee decided he couldn't work at Red Eagle under such circumstances, scheduled a meeting with Cannon and told him what was happening, the reports state.
During the six-month period in question, Umbrella Roofing lost out on 32 bids worth more than $2.9 million in Aspen, Snowmass, Basalt and Carbondale, according to Mackey's arrest warrant affidavit. In addition, a review of computer records showed that Red Eagle accessed another 24 bids for roofing jobs Umbrella completed, the affidavit states.
Gibson, the sheriff's investigator, said he was working to determine which bids Red Eagle received after undercutting Umbrella, which likely will result in future theft charges against Mackey and Acerra.
In addition to allegedly stealing information about the roofing bids, the new Red Eagle employee said that for one possible job, Acerra directed him to "go through Umbrella Roofing's bid and randomly change the numbers Umbrella Roofing had estimated," according to the sheriff's reports.
Cannon, Umbrella's owner, also told sheriff's investigators that some of the company's estimates had simply disappeared.
"The more we look into it, there seems the possibility that Red Eagle actually deleted some estimates and customers from our system," Cannon wrote in an email to Gibson included in the sheriff's reports.
Kalamaya acknowledged Thursday that Mackey was informed at one point "of some connection to Umbrella" and instructed Acerra to stop using the insider information and "get a new laptop." However, that occurred just before Mackey left the country on a multi-week vacation, so he didn't check to see if his wishes were carried out and didn't quite believe the illegal activity was taking place in the first place, Kalamaya said.
"If he's guilty of anything, it's not ensuring that his employees followed his instructions," he said. "He is not a criminal. He is not a hacker."
Further, Mackey wasn't in charge of his company's bidding process, so he didn't know the ins and outs of it, Kalamaya said.
"In order to be guilty of the crime charged, he has to knowingly access a computer network and there's no evidence he was the one accessing that information," he said. "There's not evidence the bidding process was run by my client."
However, when sheriff's deputies and investigators from the District Attorney's Office searched Mackey's office Aug. 10, they found "13 records with obvious connections to Umbrella Roofing," the reports state.
"Mackey and Acerra accessed Umbrella Roofing's … software as (the new Red Eagle employee) described and printed Umbrella Roofing's paperwork," according to the reports. "Mackey and Acerra then … attached everything in Red Eagle Roofing's files as (the new employee) described."
Gibson also sent court orders to Comcast and discovered that one of two IP addresses assigned to Mackey accessed Umbrella's server 31 times between Feb. 17 and Aug. 4, according to the sheriff's reports. Mackey's second assigned IP address accessed the server four more times in that time period, the reports state.
Mackey posted a $25,000 bond Thursday and was released from jail. He is due back in court Jan. 2.