Virus planned to ruin Fannie Mae data

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By David Dishneau ASSOCIATED PRESS

HAGERSTOWN, Md. (AP) -- A fired Fannie Mae contract worker pleaded not guilty on Friday to charges he planted a virus designed to destroy all the data on the mortgage giant's 4,000 computer servers nationwide, according to federal prosecutors.

If the virus had been released as planned on Saturday, the Justice Department said the disruption could have cost millions of dollars and shut down operations for a week at the largest U.S. mortgage finance company.

Rajendrasinh B. Makwana, 35, of Glen Allen, Va., pleaded not guilty Friday in U.S. District Court in Baltimore to one count of computer intrusion, the U.S. attorney's office said.

Makwana's federal public defender did not immediately return a call seeking comment on the allegation.

Makwana, a citizen of India, was fired early on the afternoon of Oct. 24 from his job at Fannie Mae's data center in Urbana, about 35 miles from the company's Washington headquarters, according to court records. An affidavit states he was fired for erroneously writing programming instructions two weeks earlier that changed the settings on high-speed computers called servers that are connected to multiple network users.

Before surrendering his Fannie Mae badge and laptop computer at the end of the day Oct. 24, Makwana "intentionally and without authorization caused and attempted to cause damage to Fannie Mae's computer network by entering malicious code," according to an indictment returned Tuesday.

The code, if executed this Saturday as planned, "would have resulted in destroying and altering all of the data on Fannie Mae servers," the indictment states.

According to the affidavit signed by FBI Special Agent Jessica A. Nye Jan. 6, a Fannie Mae engineer discovered the malicious instructions by chance Oct. 29. The programming instructions were removed that day and did no harm, according to the affidavit.

Had the virus been released, "it would have caused millions of dollars of damage and reduced if not shut down operations" for at least a week, Nye wrote.

The damage would have included cleaning out and restoring all 4,000 servers, restoring and securing the automation of mortgages and restoring all data that was erased, the FBI agent wrote.

The charge carries a maximum sentence of 10 years in prison.

Makwana was arrested Jan. 7 and released on $100,000 bond Jan. 8, according to court records.

Fannie Mae is the largest U.S. mortgage finance company. It owns or guarantees about $3 trillion in home loans.

Fannie Mae and Freddie Mac, both publicly traded, were created by Congress to inject money into the home-loan market by purchasing mortgages and bundling them into securities for sale to investors. Both were taken over by their government regulator in September after mounting mortgage losses put them in distress.