Fraud Management & Cybercrime , Fraud Risk Management , Legislation & Litigation

Tesla Sues Former Employee, Alleges IP Theft

Company Claims Newly Hired Engineer Downloaded Software Files to Dropbox
Tesla Sues Former Employee, Alleges IP Theft
Tesla's Gigafactory in Nevada (Photo: Tesla)

Tesla has filed a lawsuit against a former employee who the carmaker says stole thousands of confidential software files almost immediately after being hired in December 2020.

See Also: Playing A New Hand: How Digitalization Is Reshuffling The Cards For Banks Worldwide

The electric carmaker alleges Alex Khatilov, also known as Sabir Khatilov - who was hired as a software automation engineer on Dec. 28, 2020 - removed the files from the company's internal network and transferred them to his Dropbox account.

"These scripts, when executed, automate a broad range of functions throughout Tesla's business,” the lawsuit states. “Only a select few Tesla employees even have access to these files; and as a member of that group, the defendant took advantage of that access to download files unrelated to his job."

The lawsuit, filed with the U.S. District Court for the Northern District of California, San Jose Division, alleges Khatilov violated the U.S. Defend Trade Secrets Act and California's Uniform Trade Secrets Act and breached his contract with the company.

The proprietary software that Khatilov allegedly removed handles a range of business functions for Tesla, including procurement, materials planning and processing, payables and purchasing, the company says.

Tesla is asking the court to stop Khatilov from any further dissemination of the company’s trade secrets and order that he return all Tesla-owned equipment and information still under his control. The company is also asking for financial compensation to be determined by the court.

No criminal charges have been brought against Khatilov, the lawsuit notes.

Khatilov told the New York Post that the company instructed him to download the files because his job entailed working with some of them. He said that while "trying to make a backup copy of a folder containing the files on his computer, he 'unintentionally' moved the folder into the Dropbox."

Tesla's Allegations

Tesla alleges that, on Jan. 6, its information security team detected that Khatilov had downloaded a wide variety of confidential corporate information and moved the files to his Dropbox account. The company says its investigation found these transfers allegedly began taking place within three days of Khatilov joining the company.

When Khatilov was confronted about the security team's findings, he claimed that the only files he moved to Dropbox were personal, the lawsuit alleges.

"After being prompted, he gave Tesla investigators access to view his Dropbox account, where they discovered defendant's claims were outright lies: The Tesla investigators found thousands and thousands of Tesla's confidential computer scripts in his Dropbox," according to the lawsuit.

Khatilov then told Tesla's security team that he had "forgotten" about the company-owned files, Tesla says. Further, the company claims the defendant allegedly attempted to delete his Dropbox account while he was being remotely interviewed by Tesla personnel.

"Tesla does not know whether defendant took additional files, whether he copied files from the Dropbox account to other locations in the days before he was caught, or whether he sent any of the files to other persons or entities," the company says.

Earlier Data Theft Thwarted

Tesla faced another apparent insider threat last year.

In August 2020, Russian national Egor Igorevich Kriuchkov was arrested for allegedly offering a $1 million bribe to a Tesla employee to have that person introduce malicious software into the company's computer network, according to a federal indictment.

The Tesla employee who Igorevich allegedly targeted with a bribe brought the incident to the company's attention and worked with the FBI to thwart the attempt (see: Russian Indicted in Tesla Ransom Scheme).


About the Author

Doug Olenick

Doug Olenick

News Editor, ISMG

Olenick has covered the cybersecurity and computer technology sectors for more than 25 years. Prior to joining ISMG as news editor, Olenick was online editor for SC Media, where he covered every aspect of the cybersecurity industry and managed the brand's online presence. Earlier, he worked at TWICE - This Week in Consumer Electronics - for 15 years. He also has contributed to Forbes.com, TheStreet and Mainstreet.




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