The creator of an oil and gas industry networking website allegedly stole data from it after he sold it—to help grow a second website that he then tried to sell to the same company that bought the first website.
On March 30, the FBI arrested Rigzone.com creator David Kent of Spring, Texas. He is accused of hacking into the news and job postings site, which he founded in 2000 and sold a decade later, in order to make a second site he founded, Oilpro.com, look better for an acquisition. The prospective buyer he was allegedly targeting? DHI Group, which bought Rigzone in 2010 for at least $39 million. (There were up to $16 million in additional incentives included in the deal; an FBI summary of the charges says Kent sold the company for $51 million.)
Kent, 40, stayed on for about a year after the sale and went on to start Oilpro in 2013. It’s pretty similar to Rigzone. But its user numbers weren’t growing satisfactorily. So, according to the FBI, Kent hacked Rigzone with the help of an unnamed accomplice-turned-informant at the company to swipe contact information for Rigzone users through a backdoor to the site’s resume database.
While all this was going on, the government alleges in its complaint, he emailed and met with executives at DHI about acquiring Oilpro. (DHI itself isn’t named in the government’s complaint, which only refers to the firm as “Company-1.” But it is clear from identifying details contained in the complaint that the prospective buyer in question is New York-based DHI, which owns professional networking sites and is publicly traded.)
It’s not to hard to see the value in a networking site for the oil industry right now, since so many folks in the industry are probably looking for jobs if they haven’t already moved on to greener pastures (pdf). ComScore data says that Oilpro had 107,000 unique users in February, versus Rigzone’s 174,000. Based on emails Kent allegedly exchanged with DHI about his new website’s valuation, the FBI believes he was seeking at least $20 million for Oilpro.
“My original mission was to build something that [Company-1] would be interested in acquiring,” he allegedly told DHI, while attributing Oilpro’s growth to a successful LinkedIn campaign and good networking.
In any case, it appears he was successful in attracting new users—the FBI says 111,000 people joined Oilpro from Rigzone—until DHI was tipped off by a prospective Rigzone member who got suspicious of being asked to join Oilpro based on contact information tied to a Rigzone account he hadn’t finished making.
DHI, for its part, said the extent of the alleged hacking was limited.
“Only resume profile information was accessed; at no time was personally identifiable information compromised,” DHI CEO Michael Durney said in a statement. “The protection of our members’ data is of the utmost importance to us and we continue to take serious measures to ensure our members’ information is secure.”
The Justice Department’s news release on the matter suggests Kent might face as many as 25 years in jail should he be convicted on the wire fraud and conspiracy charges he now faces. The case is being tried in federal court in New York’s southern district. We’ve attempted to reach Kent for a comment and will update this post as warranted.