In an effort to recover tens of millions in losses, the insurer for pharmaceutical giant Eli Lilly is trying to prove that lax control over confidential, computer data by Lilly’s security contractor enabled thieves to use detailed schematics to carry out brazen warehouse burglaries in Enfield and elsewhere across the country.
National Union Fire Insurance Co. of Pittsburgh could go to trial later this month on a suit over a 2010 Lilly warehouse heist in Enfield that could have been plotted in Hollywood. At the time, Lilly’s warehouses were guarded by a combination of Tyco Integrated Security and ADT, which has since split.
Hi-tech thieves armed with inside information cut through the warehouse roof in the middle of the night, bypassing arrays of state-of-the-art motion detectors and other security gear. They backed a tractor-trailer rig into the only one of seven loading bays not covered by cameras, packed it with $60 million in cancer drugs and disappeared.
The Enfield heist is believed to have been the biggest pharmaceutical theft ever and the suit, with its demand for $45 million in recovery, could provoke self-examination in the cyber security industry. A federal district judge in Florida set a trial date of July 20.
The suit is pending in Miami and last week a federal judge strengthened National Union’s case by ruling that should the case not settle before trial, the insurer can present evidence to a jury of three remarkably similar warehouse robberies in Florida, Texas and Illinois.
Among the similarities: The same gang of Cuban thieves was charged in all four burglaries. The thieves appear to have used inside information to bypass elaborate security systems, Tyco/ADT was the security contractor. Losses of warehouse inventory were in the millions of dollars.
National Union wanted to sue in Connecticut, but was driven by Connecticut’s two-year statute of limitations to Florida, where Tyco/ADT was headquartered and maintained its computer servers. The insurer’s lawyers are arguing that the Enfield heist was the result of a computer security breach in Florida that gave Florida-based criminals access to security schematics at warehouses around the country.
After months of investigation, National Union lawyers Elisa T. Gilbert and Bendan R. O’Brien of The Gilbert Firm in New York assert that they have uncovered evidence of repeated computer breaches and connected them to a computer account used by a former Tyco/ADT manager.
The former manager, who resigned from Tyco/ADT in 2009 to take a job elsewhere in the security industry, is a Cuban immigrant and is related — tenuously — to one of the Cuban burglars. In a deposition, the manager said the burglar “is married to my brother-in-law’s daughter from a previous marriage.”
In the same deposition, the manager said he and his wife experienced financial difficulty at about the time of the warehouse burglaries and an investment property they bought was briefly in foreclosure. He said he and his wife were able to save the property by budgeting, renegotiating and borrowing from a retirement plan.
The manager left Tyco/ADT about eight months before the burglars probably began planning the Enfield heist, the suit says. But the suit claims that Tyco/ADT data processing records show someone used the manager’s password and another digital identifier to access or attempt to access Tyco/ADT computer data for months after he resigned.
One of National Union’s security experts testified in another deposition that two FBI agents told him early in the case that they believed the thieves were aided by someone within “the alarm company.” After his own investigation, the expert said he would testify at a trial that the Tyco/ADT manager was likely associated with the leak.
The key to the Enfield heist is the ability of the thieves to obtain a comprehensive evaluation by Tyco/ADT of the warehouse security set-up, the suit contends. Under its marketing program, at contract renewal time, the security firm produced precisely detailed reports on client security deficiencies and stored the confidential reports on company computers, the suit says.
Tyco/ADT vigorously disputes all of the suit’s contentions. At one point in the litigation, characterizing where, if anywhere, there was agreement between the parties, U.S. District Judge Beth Bloom wrote, “The Court hesitates to use the term ‘undisputed,’ as the parties contest nearly every shred of evidence presented.”
When Lilly warehouse employees returned to work on the Monday after the weekend burglary, they found that the security system had been turned off and that, over a period of four or five hours, someone had used a Lilly forklift to load 49 pallets of pharmaceuticals onto a rented tractor-trailer. Bloom said the loss was “in excess of $60 million.”
The police and FBI believe the burglars, led by brothers Amaury and Amed Villa, climbed onto the 70,000-square-foot warehouse roof and crossed its entire length to arrive, precisely, at what the suit calls “a small area comprising less than 1% of the total surface area of the roof.”
The area, about 4 square feet, was identified in Tyco/ADT’s confidential security assessment by “X” and “Y” coordinates and as being directly above the warehouse control room. The control room was described in the report as “requiring additional intrusion detection devices and cameras,” the suit says.
“Amaury Villa and Amed Villa rappelled from the small location on the roof to the unmonitored area of the warehouse and accessed the [control] room undetected by monitoring equipment,” the suit says, It says the brothers “disabled the existing security systems master controls, telecommunications systems and cell batteries to the back-up communications systems.”
The suit says that the Villa brothers disconnected the warehouse fire alarm system and, in doing so, “accidentally generated an administrative alarm … that was logged as a ‘Communications Fault.'”
“Pursuant to the procedure for handling such ‘Faults,’ no intruder alarm was triggered,” the suit says.
The suit says the thieves used similar inside information in three other warehouse heists elsewhere in the country.
During the burglary of a warehouse in Texas, the suit says, the thieves avoided monitored corridors by punching a path through the walls of offices that ran parallel to the corridors.
“Despite the existence of an elaborate security system in place at the Grand Prairie, Texas, warehouse, Amaury Villa avoided the security system by rappelling from a small location on the roof of the warehouse into the office spaces (outside the scope of the detection devices), and continued to avoid the monitored corridors and hallways by tunneling through office walls,” the suit says.
The Enfield thieves were undone by a rookie mistake, the FBI has said. One of them touched a plastic water bottle while in the Enfield warehouse and left a fingerprint. The FBI tracked the thieves to the Miami area, where agents caught one of them negotiating for the sale to an overseas buyer of some of the stolen Enfield pharmaceuticals.
The transaction the FBI interrupted involved the sale of $1.4 million in drugs for $150,000.
The Villa brothers and their partners pleaded guilty and have been sentenced to prison.
National Union Fire Insurance hopes to recover money it has paid Lilly. Its suit charges the security contractor with negligence.
