The mastermind behind the theft of nearly 130 million credit and debit card numbers from Heartland Payment Systems, a company with headquarters on Nassau Street, was indicted by federal authorities on Monday, August 17. The United States attorney’s office for New Jersey announced that Albert Gonzalez of Miami and two as-yet-unnamed Russian co-conspirators have been charged in what is believed to be the largest hacking and identity theft case ever prosecuted.
Four companies, including retailers 7 Eleven and Hannaford, were also victims of the scheme. Gonzalez is now in jail for an earlier record theft at off-price retailer TJX Cos. He has also been charged with stealing credit card data from Dave & Busters, a chain of casual restaurants.
The attorney’s office alleges that the hacking attacks consisted of what is known as SQL-infection attack, which is an attack that exploits security vulnerability in elements of a computer that receives user input. Gonzalez provided some of the malicious software (malware) to his coconspirators, and they added their own as they sought to identify the location of credit and debit card numbers and other valuable data on the corporate victims’ computer systems.
The attorney’s office said in its indictment that Heartland’s records were breached beginning on or about December 26, 2007. Robert Carr, the company’s president, announced the breach on January 20, 2009. In the following months many banks across the country found that their customers’ accounts had been used for fraudulent purposes. Other banks, trying to head off this activity, replaced all of their customers’ cards.
The stolen data made its way into the hands of credit thieves after the coconspirators sold it on the Internet. Buyers then repackaged it into smaller lots and resold it. It was eventually used to make unauthorized withdrawals from banks and unauthorized purchases from retailers.
It was a well thought out scheme. The suspects went to stores to study the type of checkout machines each used. After further investigation into the companies’ computer systems, they uploaded information onto servers — some located in New Jersey — that worked as hacking platforms.
The indictment against Gonzalez and his coconspirators says that their scheme “is believed to constitute the largest hacking and identity theft case ever prosecuted by the U.S. Department of Justice.”
Carr was not immediately available for comment, but in a prepared statement he said that his company “would like to congratulate officials on their effort to bring to justice some of the individuals behind numerous data breaches.”
In an August 12 interview with CSO Security and Risk magazine, Carr said in response to a question on how much money Heartland has spent addressing security holes and “other things like lawsuits” that the number for the first half of 2009 was $32 million “and we don’t know what will happen going forward. We are aggressively defending against litigation.”
Heartland’s stock was trading up nearly 3 percent, at about $10.45, down from a year-to-date high of about $18, on the morning following the indictments.
Heartland Payment Systems (HPY), 90 Nassau Street, Second Floor, Princeton 08542; 888-798-3131; fax, 609-683-3815. Robert Carr, CEO. www.heartlandpaymentsystems.com.
A New Ceramics Company for Trenton
It’s a coincidence, and a nice one at that. Fitz and Floyd, a company that designs and manufacturers tabletop china, has moved its headquarters to Trenton, former home of such china luminaries as Lenox and Boehm.
Steve Baram, president of the company, says that Trenton’s history of turning out first rate china played no part in his company’s relocation from the Dallas, Texas, area. “Although,” he says, “at one time we did look at buying Boehm.”
Instead, Fitz and Floyd’s move was the result of a recession that nearly put the 50-year-old company out of business and of Baram’s ties to nearby Bucks County.
Fitz and Floyd, badly hurt by the decrease in consumer spending, was in bad shape when it was purchased in June by Vertex Capital, a New York City company that specializes in acquiring “distressed or overleveraged assets in the brand and consumer space,” the company’s COO, Larry Nusbaum, said in a prepared statement. He went on to say that Vertex is “not afraid to invest in counter-cyclical businesses.”
Fitz and Floyd could be in the counter-cyclical category because no one actually needs its products, which include seasonal tabletop decorations — fanciful ceramic rabbits for Easter, pumpkin tureens for the fall holidays, and a line of citrus-themed china for the summer. At the same time, the company’s prices are low. Many items are in the under-$20 range, a price point that could entice consumers to open their wallets when it comes time to give a gift or to celebrate a holiday.
In addition to selling products bearing its own name, Fitz and Floyd is the exclusive licensee for Ralph Lauren tabletop (fall collections — Indian Cove Lodge and RL Penthouse).
The company got a huge vote of confidence on August 11 when Wells Fargo extended a $20 million line of credit.
Fitz and Floyd moved from just outside Dallas to Trenton, to offices that, says Baram, “look right into the baseball stadium,” because of the city’s proximity to Manhattan, where Vertex is located. Ease of travel between the two cities by train, along with the nearby airport for longer trips, made the site ideal. Trenton was also chosen because it allows Baram, a graduate of the University of Maryland (Class of 1990) and of SMU, where he earned an MBA, to live in Bucks County, where he grew up.
The ceramics company has seven employees in Trenton. Baram, who has been with Fitz and Floyd for 10 years, says that there are also employees in Dallas, and in other offices around the country. The company sells its products in Canada, Australia, and Europe, as well as in the United States.
A key difference between Fitz and Floyd and the Trenton china companies it follows is that Fitz and Floyd does no manufacturing in the city. In a sign of the times more overreaching than the current recession, Fitz and Floyd, says Baram, does “all manufacturing internationally.”
Fitz and Floyd, 429 Riverview Plaza, Trenton; 609-916-0201; fax, 800-328-9955. Steve Baram, president. Home page: www.fitzandfloyd.com.
New in Town
Basin Water, 250 Phillips Boulevard, Suite 255, Ewing; 877-312-8950; fax, 609-771-6678. Michael Stark, president and CEO.
Basin Water, a California-based water treatment firm, has opened an office in Ewing in conjunction with its recently acquired line of Envirogen environmental treatment products.
The acquisition of the line was announced last October, for an undisclosed amount. According to Mike Stark, president & CEO of Basin Water, Envirogen products are an ideal addition to a Basin Water technology portfolio that focuses on lowest lifecycle cost solutions in environmental applications.
Aqua NJ Buys Lawrenceville Water
Aqua New Jersey has purchased the Lawrenceville Water Company. It will now provide water to 8,000 people living in the village of Lawrenceville and in parts of Lawrence Township.
William Davis, president of the company, says that Aqua New Jersey serves some 160,000 residences in 18 New Jersey municipalities, including Hamilton and Robbinsville. The company is a part of Aqua America, a publicly traded company (NYSE:WRT) based in Bryn Mawr, Pennsylvania.
Aqua America’s history dates back to 1886 when a group of Swarthmore College professors were granted a charter to supply water to the residents of Springfield Township, Delaware County. This company was eventually incorporated as the Springfield Water Company.
Aqua America, successor to the Springfield Water Company, provides water and wastewater services to approximately 3 million people in 13 states. Its plan is growth through acquisition — it has acquired 14 water or wastewater companies this year. The company is following that acquisition model in New Jersey.
Aqua New Jersey was a bidder when the City of Trenton put Trenton Water Works on the block. That utility had been providing water to a number of suburban towns, including Ewing, Hopewell, and parts of Lawrence. “It was attractive to us,” says Davis. “We’re always excited to grow and it was nice suburban areas to serve.” But the water utility was sold to New Jersey American Water Company.
Davis is philosophical about losing out on that one. “I’m a very competitive person,” he says, “but if you lose you lose.” He is happy to have added the Lawrenceville Water Company, which gets some of its water from deep wells, the same way that Swarthmore originally did, and says that he is continuing to look for attractive acquisitions. Asked if he has his eye on any towns in particular, he says, “none that I will talk about.”
Water is a highly fragmented utility, and not just in New Jersey, says Davis, who adds that the distribution of water “logically should be consolidated.”
— Kathleen McGinn Spring
Aqua New Jersey Inc. (WTR), 10 Black Forest Road, Hamilton 08691; 609-587-5406; fax, 609-587-0689. William Davis, president. Home page: www.aquanewjersey.com.
Andrew Sheldon Architect, 315 Cranbury Road, Rear, Princeton Junction 08550; 609-683-0349; fax, 609-683-5976. Andrew Sheldon, owner.
Andrew Sheldon has moved his architecture firm from Skillman to Princeton Junction. This is the first time the architect has moved his office since 1997, when he moved from State Road. Before that, Sheldon, a Rice graduate who opened his firm in 1975, practiced on Nassau Street.
Triage HealthCom LLC, 4342 Province Line Road, Lawrenceville 08648; 609-921-2234. John P. Proach, principal. www.triagehc.com.
Medical marketing company Triage HealthCom has moved its office from Main Street in Forrestal Village to Province Line Road.
StepStone Group LLC, 44 Nassau Street, Suite 370, Princeton. Home page: www.stepstonellc.com.
Three months after Stephen Moseley stepped down as president of the private equity advisor firm stepStone Group, the company has left New Jersey and operates from its headquarters in La Jolla, California.
In May Moseley resigned amid increasing media attention over a national pension scandal. In his letter of resignation, Moseley said: “I have been assured by the Attorney General of New York that I am not a target of the ongoing industry investigation. However, press reports have raised my name, creating an unfair and unnecessary distraction for all of us.”
StepStone Group can be reached at www.stepstonellc.com, or at its California headquarters, 858-558-9700.
Antistatic Industries (of Delaware) Inc. , 11 Deer Park Drive, Suite 102B, Monmouth Junction.
StaticPaint, a specialty manufacturer of paints and coatings for major American computer companies, has moved to Northvale.
The company had occupied a suite at Deer Park Drive since 2005, employing five. It can be reached online or at 201-767-5342.
84 Lumber, 109 Route 31 North, Pennington 08534; 609-737-9084; fax, 609-737-2245. Dan West, manager. Home page: www.84lumber.com.
84 Lumber has left its Pennington location. Its phones are not being answered, and its parent company’s website does not list Pennington among its store locations.
Out of Bankruptcy
The Trentonian, 600 Perry Street, Trenton 08602; 609-989-7800; fax, 609-393-6072. Bill Murray, publisher. Home page: www.trentonian.com.
Journal Register Co., publisher of the Trentonian, has emerged from bankruptcy protection and secured new financing from its lenders six months after making its Chapter 11 filing.
With that plan approved by a federal bankruptcy judge, the company said that it has received exit financing of $150 million from JPMorgan Chase & Co. and $75 million from Wells Fargo as well as a new credit agreement with Wachovia. Out from Chapter 11, the company can now make decisions without a judge’s supervision.
The company continues under the management of interim CEO Robert Conway, who was hired as a chief restructuring officer last year and replaced former CEO James Hall after the filing.
The Yardley, Pennsylvania-based newspaper publisher sought protection from creditors amid one of the worst advertising declines in the industry’s history. When it filed for bankruptcy protection, the company listed $596 million in assets and $692 million in debt — the bulk of it held by JPMorgan Chase. The restructuring plan cut what the company owed to secured lenders to $225 million in return for ownership. The plan wiped out stockholders, largely investment funds, and split a $2 million pool among unsecured lenders.
In addition to the Trentonian, the company owns a number of newspapers in Connecticut, Pennsylvania, Michigan, New York, and Ohio.
Bruce Perone, 75, on August 15. He was the owner of B.R. Perone Painting and Decorating.
Renee Pearl Denmark Punia 79, on August 13. Along with her husband, Leonard, she was a founding contributor of the Holocaust/Genocide Resource Center at Rider.
Muriel Green, 66, on August 13. She taught art to children at the YWCA for more than 30 years.
Richard Kracht, 72, on August 11. He was a municipal court judge in a number of towns, including Plainsboro and Cranbury.