Consultant Charged in Parametric Extortion Scheme

A Florida man has been charged with extortion after he allegedly threatened to release the master "keys" to run Parametric Technology Corporation (PTC) software unless the company paid him more than US$1 million, the office of the U.S Attorney for Massachusetts said Wednesday.

Michael Pitelis, 39, of Tarpon Springs, Florida, allegedly sent an e-mail Aug. 3 to Richard Harrison, Parametric's chief executive officer, that asked what would happen if the installation instructions for PTC's Pro/Engineer software package were released to Pro/Engineer bulletin and news boards, according to an affidavit filed in a federal court in Boston. The remainder of his message allegedly detailed how to install the software.

An individual or company would have gained full access to the functions of the software package without having to enter into a licensing agreement, according to PTC. Pro/Engineer is PTC's flagship mechanical computer aided design (MCAD) software package. Since 1985, PTC in Waltham, Massachusetts has developed three-dimensional mechanical design software marketed to manufacturing companies seeking to develop new products.

David Freedman, PTC's senior vice president and general counsel, answered the initial e-mail on Aug. 10 and an e-mail dialogue began on what assurances PTC had that Pitelis, who was using the e-mail account signed "Bill Myers", would not release the information if a payment was made.

Myers allegedly replied Aug. 11 that our "employer" will accept $400,000 from PTC to keep silent and it will later be complemented by a monthly fee of $40,000. As long as the fee is paid, the information will not be released, Myers wrote in the e-mail, court filings state. Myers allegedly laid out a deadline of Aug. 14 to respond to the demand.

Freedman responded on Aug. 14 that he still did not have assurances from Myers that he would not release the information. Myers said he was looking for a "long-term relationship" with PTC or his current not-disclosed employer and that he had set up an offshore bank account for a wire transfer. Eventually, Myers said he wanted more than $US1 million.

PTC officials soon after the Aug. 14 exchange contacted law enforcement, the U.S Attorney's office said. Federal agents were able to track Pitelis' e-mail.

They learned that he allegedly was making the threats from a public access computer terminal at a library in Florida.

According to the affidavit, Pitelis possessed the password and codes provided to PTC engineers to run the 20th version of Pro/Engineer, known as Release 20.

The retail value to the full suite of functions contained on the MCAD program is more than $US100,000.

Pitelis had no association to PTC, the affidavit states. Pitelis has a Web site that states he is the president and senior associate of Pitelis & Associates, which specializes in application, training and support of PTC's Pro/Engineer, Pro/Designer and Pro/PDM software.

Pitelis was charged with extortion in a complaint filed Tuesday in the United States District Court in Boston. If he is found guilty, he could receive a maximum of 20 years in prison and a $US250,000 fine.

In a statement Wednesday, Freedman said PTC appreciated the work of law enforcement and said the company will continue to be vigilant in investigating and prosecuting acts of piracy and software counterfeiting.

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