• U.S. Companies Left to Protect Themselves From Foreign Hackers

    In a bizarre twist of events. A multi-billion dollar American real estate information company named CoStar launched a private sting operation in the Philippines suspecting a competitor had stolen massive amounts of data.

    They were right. The foreign owned Xceligent had stolen millions of dollars’ worth of Intellectual Property from CoStar, but that’s not all they found. They uncovered much more than real estate data, they discovered a worldwide web of child pornography, prostitution and human trafficking.

    According to an NBC News report CoStar, who runs Apartments.com was allegedly the victim of organized theft. They employ thousands of Americans, and they invest more than $150 million every year into new research, data, intellectual property to keep their site relevant to its customers who make their living in the various aspects of America’s real estate and development market.

    Xceligent is a direct competitor to CoStar, and they are owned by a large and well known British firm.

    According to Xceligent’s website, they “build and maintain comprehensive real estate data so you don’t have to.”

    Where they were getting their “data” is what led to the raid.



    According to a July 1, 2017, NBC News report, CoStar, secured a court order to raid “headquarters for a firm called Avion where hackers were believed to be stealing proprietary real-estate photos and information on behalf of an industry rival.”

    CoStar claims that raid secured proof that Avion, at the behest and being compensated by Xceligent, was stealing IP from CoStar. They now had evidence pointing toward the allegations that a foreign based company was actually stealing the IP of an American company.

    According to Bisnow, in a post published on December 14, 2016, CoStar CEO, Andrew Florance alleges:

    “Xceligent stole and resold CoStar’s content on ‘an industrial scale,’ finding more than 10,000 instances of copyrighted photos and data on Xceligent’s public website.”

    Xceligent pushed back arguing that the suit has no merit, but that was before the raid that captured evidence proving otherwise.

    So, what is a $9 billion company like CoStar supposed to do when the U.S. Government does nothing when a foreign company literally attacks their livelihood? At their own expense, they tracked down the hackers allegedly employed by Xceligent. The hacking operation was based in the Philippines hidden inside  Avion.

    CoStar armed itself with lawyers, computer forensic experts, and private security and went to the Philippines. They obtained a court order and a raid orchestrated in concert with the government of the Philippines was set in motion.

    The raid “swept through Avion’s sprawling facility — eight hours from Manila and accessible by a single road — and emerged with 262 hard drives containing 35 terabytes of data.”

    After they secured the data, they found something that disturbed them much more than stolen IP data.

    It became obvious Avion was involved in “child pornography, prostitution, sex trafficking, and links to the dark side of the internet found at Backpage.com, a site known to run a global adult ad sales operation.”

    Prior to the CoStar raid, Backpage.com had claimed its innocence, claiming it was simply discreet adult advertising.

    Why did CoStar have to do all of this when the United States government should have been helping to protect an American company’s IP from foreign attack? It is stunning that an American company was left with no recourse other than to orchestrate a military style raid against criminals hiding in a foreign country.

    The U.S. government needs to get in the game. Hacking is the crime of the future and it’s time for recourse for companies attacked by foreign entities losing valuable intellectual property to be established. The fact that the CoStar raid discovered something much darker and more dangerous than a million pictures of real estate should be all the warning we need.

    Where was the FBI, the Justice Department, State Department or even the CIA to help this United States company to protect from theft? The Feds have been nowhere to be found. IP theft is a major problem and should be one of the top priorities of the Trump Administration going forward.

    Cloakroom Confidential

    Cloakroom Confidential was a longtime Capitol Hill staffer and insider who has contacts in the House and Senate at the highest levels.

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