Ex-Intel employee pleads guilty

Electronic News, March 25, 1996

San Jose, Calif.--A former Intel employee, arrested last year for attempting to sell trade secrets to Advanced Micro Devices, last week pleaded guilty to charges of mail fraud and interstate transportation of stolen property.

Guillermo Gaede, also a former AMD employee, admitted he pirated Intel's 486 and Pentium microprocessor plans and mailed them to an AMD official. The stolen plans are said to be worth $10 million to $20 million. Mr. Gaede faces up to 15 years in prison and $500,000 in fines and restitution, and may be eligible for parole after 33 months.

As an applications engineer at Intel's Chandler, Ariz., plant from late 1993 to June 1994, Mr. Gaede had modem access to certain company data banks from his home computer. Unable to download the confidential information, he videotaped the data from his computer screen. After moving back to his native Argentina, he reportedly sent the tapes to AMD.

AMD--already immersed in a legal stew with its microprocessor archrival--immediately turned the videotapes over to Intel, which then notified the federal authorities, an Intel spokesman said.

It's not clear whether Intel still allows employees to access confidential files from remote stations.

"It's a continual learning process when things like this happen. I'm sure security procedures have changed to some extent as a result," the spokesman said. "When you find a hole in a system, you want to plug it, but if you put too tight a lid on things, the whole business can suffer."

In an interview prior to his arrest, Mr. Gaede professed to be a double agent working for the U.S. government and Cuba, although the U.S. Attorney's office has disavowed that claim. Mr. Gaede also alleged he passed technology stolen from Intel and AMD to countries not necessarily on friendly terms with the U.S., including Cuba, Iran and North Korea.

"We will never fully know the extent to which he was successful (at selling technology to foreign governments)," Intel's spokesman said. "But in this business, the best natural defense is the complexity of technology, the cost of building it, and probably most significantly, the speed of change. By the time you're able to learn a technology and are able to make something with it, its obsolete."