FBI arrests extortion suspect at library computer

The man wrote e-mails to a company threatening to release company secrets unless it paid him $1-million, the FBI says.

By KATHERINE GAZELLA

© St. Petersburg Times, published August 24, 2000

TARPON SPRINGS -- The man using the Internet at the Tarpon Springs Public Library looked inconspicuous. In recent weeks, he came and went from the library, largely unnoticed by the librarians.

But Federal Bureau of Investigation agents were watching Michael Pitelis closely. They watched as he drove from his Tarpon Point Condominium complex to the library earlier this week. An agent looked at the computer screen as he typed the words "payment in full," "cold war" and "PTC" in an e-mail message Monday.

Tuesday afternoon, they closed in. About a dozen of them encircled Pitelis at the library, handcuffed him and arrested him on charges that he tried to extort more than $1-million from a Massachusetts software company.

Pitelis, 39, had threatened top executives at Parametric Technology Corp., telling them he would post information on the Internet that would allow people to use the company's software without paying, according to a sworn statement by FBI Special Agent Nenette L. Day.

U.S. Magistrate Judge Mark A. Pizzo on Wednesday set Pitelis' bail at $25,000. Pitelis was being held at the Hillsborough County Jail on Wednesday.

Pitelis' contact with the company began Aug. 3, records show. He sent an e-mail to Richard Harrison, the company's chief executive, in which he detailed the installation instructions for the PTC software package Pro/Engineer, Day wrote.

PTC develops, markets and supports software packages that help manufacturing companies design and develop new products. For example, Dynasty Motorcar Corp. recently announced it would use a version of Pro/Engineer to design a new electric, low-speed vehicle.

PTC's software is sold on compact discs, and customers are given passwords to access the functions on the CD they have purchased.

If the information contained in the e-mail were posted on the Internet, users would have access to the full range of functions contained in a Pro/Engineer CD, Day wrote. The retail value of those functions is more than $100,000.

That e-mail and some subsequent messages were signed "Bill Myers," but the messages were traced back to Pitelis. He used the address goldwin0@yahoo.com, until a PTC employee contacted Yahoo and the account was canceled. He then used goldwin00@yahoo.com, records show.

In later messages, most of which he composed at a library terminal, Pitelis wrote that an "unnamed individual" was willing to pay $250,000 and, later, $400,000 for the information.

"We will initially accept a lump sum of $400,000 from PTC to contain this information," he wrote in an Aug. 11 e-mail, FBI records show. He also asked for a $40,000 monthly "maintenance fee." He also wrote that an offshore account had been set up to accept a wire transfer from PTC.

He later raised the stakes. In an e-mail dated Aug. 21, Day said, Pitelis demanded $1-million from PTC. Federal agents watched as he typed the message, and he was arrested the next day.

Agents and PTC were able to trace Pitelis' e-mails through the Internet service provider that passed along his e-mails. First, PTC obtained a civil subpoena that it used to track down the telephone number from which the first two e-mails were sent. It was, according to the FBI, a phone in Pitelis' name. Agents traced later e-mailed threats to the Tarpon Springs library.

Pitelis' Web site, www.pitelis.com, lists him as the president and senior associate of Pitelis and Associates, P.O. Box 894 in Tarpon Springs. The company "specializes in the application, training and support of (PTC) Pro/Engineer," the Web site says.

The arrest involving about a dozen federal agents was surprisingly quiet, said Elizabeth O'Brien, the library director.

"They really were very smooth about it," she said.

O'Brien and other library employees did not know about the surveillance, she said. But the library had been contacted by its Internet service provider, who alerted them that one of the machines was being used for illegal activity.

O'Brien did not know how long Pitelis had been going to the library, but she guessed it hadn't been very long.

"We weren't sure whether he was a new customer, or if we just hadn't noticed him," she said. "Nobody knew him."

- Times staff writer Larry Dougherty contributed to this report. Katherine Gazella can be reached at (727) 445-4182 or gazella@sptimes.com.

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