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D&J Optical sues former employees for misappropriation of patient/proprietary information

Posted on September 11, 2014 by Dissent

D&J Optical in Alabama reported a breach to HHS that appears to have involved a hacking/IT incident on November 15, 2013. It is not clear when they first reported the breach to HHS, but it was only added to HHS’s breach tool on August 25. The incident reportedly affected 1,100 patients.

In attempting to investigate the breach, I could find no coverage in the media nor any substitute notice still available online.

What I did find, however, was a lawsuit filed by D&J Optical in Alabama Middle District Court on July 8, 2014. The defendants in that suit are Dr. Tammy Wallace, Debbie Hughes, and Enterprise Optical, LLC. Wallace was an independent contractor for D&J and Hughes was an employee who handled insurance and patient billing for the practice.

According to D&J’s complaint, Hughes had access to the server in the course of her duties, with an individually assigned username and password for login. Wallace did not have any login credentials to access the server.

Of note, the complaint, which alleges violation of CFAA, violation of DMCA, and numerous state claims, details some of what D&J uncovered after both Wallace and Hughes resigned their positions and D&J suddenly started receiving faxed requests for dozens of their patients’ records:

Kyle Jones also discovered that Cisco Mobility Client software had been installed without authorization on a D & J Optical workstation and that a wireless transmitter had been plugged into a USB port of a workstation. These items allowed remote access to the server through a wireless access point or virtual private network (“VPN”). At least seven user names were established without authorization, none of whom were employees of D & J Optical. This configuration could allow access to the server remotely. None of this was created or authorized by D & J Optical.

Kyle Jones also discovered a wire from the company’s internet access point extending into the attic of the building. This wire connected a booster located in the attic which could allow access to a workstation from the internet.

Consultant Tom Rivers was able to determine that the D & J Optical server was remotely accessed from an IP address assigned to the Ozark D & J Optical network by a computer named “WALLACEFAMILY.” Access from this computer began at least by October 31, 2013 and continued at least until December 2, 2013, which Was after Wallace terminated her contract with D & J optical.

D & J Optical workstations also have been accessed remotely from computer addresses that can be traced to Enterprise Optical on dates both before and after Wallace and Hughes terminated employment with D & J Optical.

So it appears that this breach involves allegations of insider wrongdoing.

I’ve uploaded the complaint in D&J Optical v. Wallace et al. here (pdf, 33 pp), as well as Wallace’s response and counter-claim (pdf, 19 pp.). For the rest of the filings, see PACER.

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