Business targeted by hacker: Lawyers have conflict

AP News
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Posted: Sep 10, 2014 5:54 PM

SEATTLE (AP) — A pizza chain targeted in a credit card hacking scheme told a federal judge this week that its former law firm has a conflict of interest in the case because it represents the son of a Russian lawmaker charged with hacking into businesses across the U.S.

Zpizza's president, Sid Fanarof, told U.S. District Judge Richard Jones in Seattle on Tuesday that his company shared confidential information with the Fox Rothschild firm that could benefit Roman Seleznev. He said the firm's failure to reveal a possible conflict was "reprehensible."

The law firm has said it can sidestep any potential conflict because it no longer represents Zpizza and has barred communication between Seleznev's attorneys and the lawyer representing the restaurants. The firm's two lawyers handling the case did not immediately respond to requests for comment on Fanarof's claim.

Seleznev, the son of Russian parliament member Valery Seleznev, was indicted in 2011 on charges that involved hacking into computerized cash registers between 2009 and 2011, stealing hundreds of thousands of credit card numbers and selling the data online.

Roman Seleznev was arrested July 5 in Maldives and taken to Guam for an initial court appearance before being brought to the U.S., where he pleaded not guilty to 29 counts on Aug. 8. The Russian Foreign Ministry has accused the U.S. government of kidnapping Seleznev.

Another business targeted in the hacking scheme, Grand Central Baking Co. of Portland, Oregon, is represented by a law firm, Garvey Schubert Barer, that also represents Seleznev.

General Manager Claire Randall told a federal prosecutor in an email sent Monday that the company will use the firm for other matters, but in the Seleznev case, it is "trying to be prudent and thoughtful in not waiving any conflict of interest."

The judge heard testimony on the conflict-of-interest concerns last week and ordered the prosecutor to solicit feedback by Wednesday from the companies targeted by the hacking. He set a Sept. 26 hearing in U.S. District Court in Seattle to hear arguments and rule on whether the law firms will continue to be involved in the case.

Fanarof said the hacking, which hit about 12 Zpizza restaurants, caused his company "a great deal of distress and financial cost." Each store affected had to spend thousands for forensic audits and pay fines to credit card companies.

"We faced the possibility of hundreds of thousands in fines, which would've bankrupted us," he told the judge. "We were fortunate in being able to settle with MasterCard and Visa. As it was, we wound up paying over $50,000 for five stores."

They also lost customers who no longer trusted their credit card system, he said.