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Company Caught in Texas Data Center Raid Loses Suit Against FBI

Company Caught in Texas Data Center Raid Loses Suit Against FBI
Company Caught in Texas Data Center Raid Loses Suit Against FBI 

By Kim Zetter 
Threat Level
April 08, 2009

A company whose servers were seized in a recent FBI raid on Texas data 
centers applied for a temporary restraining order to force the bureau to 
return its servers, but was denied by a U.S. district court last week.

The company, Liquid Motors, provides inventory management and marketing 
services to national automobile dealers, such as AutoNation. It was one 
of about 50 companies put out of business last week when the FBI seized 
the servers at Core IP Networks, one of two data centers and co-location 
facilities raided by the [1] FBI's Dallas office in the last month in an 
investigation into VoIP fraud.

Although Liquid Motors was not a target of the investigation, the FBI 
took all of the company's servers and backup tapes in the raid.

"As a result, Liquid Motors, Inc. has been put out of business and is in 
breach of its contracts with automobile dealers throughout the country," 
the company wrote in its application for the restraining order [2] 
(.pdf). "Those automobile dealerships ... may hold Liquid Motors 
responsible for all of their lost business, and may terminate their 
contracts with Liquid Motors, causing permanent and irreparable harm ... 
for which there is no adequate remedy at law."

The company noted that it maintained duplicate servers to prevent 
outages and housed those servers in a building "on a five power grid 
with a generator that can last for thirty days."

Only "a bomb to the building" or, as it happens, an FBI raid, could 
cause the servers to go down, the company stated.

The U.S. District Court for the Northern District of Texas denied the 
request [3] (.pdf), however, after holding an ex parte discussion with 
FBI Special Agent Allyn Lynd, who led the raid. Lynd told the court that 
the owner of the co-location facility was being investigated for fraud 
and that even though Liquid Motors was not part of the investigation, 
its equipment might have been used to facilitate fraud by others.



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