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Los Angeles prosecutors on Oct. 14 accused the CEO of a Michigan-based election software company of being involved in a “massive” data breach affecting at least thousands of victims, including minors.
Eugune Yu, 64, who heads Konnech, a company that provides software to electoral districts for the management of poll workers, was charged with the felony crime of embezzlement of public funds. He appeared in a Los Angeles County court on Oct. 14.
The Los Angeles County District Attorney’s office has accused Yu of stealing personal identifying information of poll workers. The office alleged that such data was stored on servers in China, in violation of Konnech’s contract with Los Angeles County.
Superior Court of Los Angeles County Judge Victoria Wilson ruled that Yu be released on a $500,000 bond and remain in house arrest until his next hearing, which is set for Nov. 17. Yu was ordered to remain in Los Angeles County and wear an ankle monitor.
Donning a gray suit with metal-rimmed glasses and a white N95 mask, the 64-year-old CEO seemed to be in good spirits in the courtroom, where he appeared together with his four lawyers.
‘Astounding’ Data Breach
Los Angeles County Deputy District Attorney Eric Neff alleged in court that the amount of data involved in the breach was “astounding,” adding that “this is probably the largest data breach in United States history.”
In Los Angeles alone, there were “probably thousands of victims,” Neff alleged. “They have contracts all over the country.”
He alleged that many minors’ data had been compromised because during the 2020 election, in the midst of the pandemic, the government had encouraged them to work at poll stations in order for the elderly, who comprise a large portion of poll workers, to stay at home.
It’s “a massive data breach,” Neff said.
Yu’s lawyer, Janet Levine, rejected the allegations, saying there was no evidence of personal identifiable information being distributed.
There’s “no breach in this case,” Levine said.
Neff argued against bail for Yu, a naturalized American who was born in China, for fear that he may be able to go back to China, where he lived for 33 years and had business operations. Yu’s alleged crimes, he said, pose “a broad danger to the community.”
“He has extensive friends and family contacts out there,” the prosecutor said. “The company is still operating, still uses Chinese contractors to conduct its business,” he alleged.
Levine rebuffed allegations that Yu had extensive ties in China, calling it “disingenuous.”
It’s all “shenanigans,” she said. She noted that Yu doesn’t have a Chinese passport and has lived in the United States for most of his adult life.
Neff confirmed that Yu’s U.S. passport is in their possession.
Konnech first began supplying poll worker management software to LA County in 2019. In October 2020, Yu’s company entered into a $2.9 million, five-year contract with the county. The contract required Konnech to keep the county’s data in the United States and allow access only to U.S.-based staff who are citizens or lawful permanent residents, according to the LA County District Attorney’s Office.
Despite these obligations, Konnech employees were sending personal identifying information of Los Angeles election workers to third-party software developers in China “who assisted in creating and fixing” Konnech’s software known as PollChief, according to a complaint California prosecutors filed on Oct. 14.
In August, Luis Nabergoi, a Konnech project manager overseeing the Los Angeles contract, wrote in a Chinese-owned messaging app that any employees for Chinese contractors working on PollChief software would have “superadministration” access to the client data, the complaint alleges.
The message also described the situation as a “huge security issue,” according to the complaint.
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