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Poisoned E-Mails
It looked like a routine message from Milburn, so DiPasquale clicked on the attachment, realizing only later that the e-mail address was a couple of letters off. Solid Oak employees received more bogus e-mails over the next few days, setting off alarm bells.

Milburn contacted Matthew Thomlinson, a Microsoft Corp. threat expert for help. Thomlinson found the malware had downloaded software that burrowed into the company’s Microsoft operating system, automatically uploading more tools the hackers could use to control the network remotely. The malware had been created on a Chinese-language computer, he concluded. As far as Milburn knew, though, his attackers could have been anyone from seasoned professionals to hacktivists tapping on a keyboard in a Beijing basement, he says.

The more urgent question was whether the attackers were behind the strange things that began happening in his network.

DiPasquale was at her desktop computer, helping the company’s attorneys with research sometime in August, when she noticed the light on her webcam come on. A few days later, a message flashed on her laptop indicating that the camera on that machine had been activated as well. She made an alarmed call to Milburn. After learning that Chinese hackers had eavesdropped on the Dalai Lama and his staff using their own computers, he went through the office, covering every webcam and microphone with black electrical tape.