By Jeff Bater
A former Federal Reserve employee accused of installing unauthorized computer software to connect to a bitcoin network has been sentenced to 12 months’ probation and fined $5,000.
The inspector general of the Fed’s Board of Governors announced that Nicholas Berthaume pleaded guilty in October to one misdemeanor count of unlawful conversion of government property. Sentencing was Jan. 27.
Berthaume, a communications analyst, had access to certain Board servers, and he allegedly installed unauthorized software on a Board server to connect to an online bitcoin network in order to earn bitcoins, the inspector general, Mark Bialek, said in a statement Jan. 30.
A Fed spokesperson said in an e-mail to Bloomberg BNA that no sensitive information was lost and no Board systems were damaged. “The Board has comprehensive programs in place to protect sensitive data which all employees are required to follow,” the spokesperson said. “The Board’s security program is dynamic and our experiences from this incident have been incorporated into the program.”
Bitcoins are earned as compensation when users allow their systems’ computing power to be part of the structure that processes, verifies and records bitcoin transactions. Bialek said his office was unable to determine the amount of bitcoins earned through the Board’s server because of the anonymity of the Bitcoin network.
Berthaume modified security safeguards in order to remotely access the server from home, Bialek alleged. When confronted about the actions, Berthaume initially denied knowledge of the wrongdoing.
“Later, however, Berthaume remotely deleted the software that he had installed in an effort to conceal his actions,” Bialek said.
The Office of the Inspector General investigated the matter, and forensic analysis confirmed Berthaume’s involvement, which resulted in his firing and ultimately led to an admission of guilt, Bialek said.
To contact the reporter on this story: Jeff Bater in Washington at email@example.com
To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)