Lawsuit Arising From Massive Pharmaceutical Theft Moves Forward Against ADT / Tyco

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A civil lawsuit arising out of what is believed to be the biggest prescription drug theft in American history is set to move forward to trial, after a federal judge in Florida denied summary judgment motions of defendant Tyco Integrated Security, f/k/a ADT (NYSE: TYC), the nation’s leading security provider. The case (CASE NO.: 13-80371-CIV-MARRA), which seeks to recover $48 million from Tyco, could set precedent impacting the responsibilities of companies that provide security or cyber-security or have access to any sensitive customer data, such as network support companies, and could have wide-ranging implications across the insurance and real estate as well as security industries.

Trial is set for July 20.

The lawsuit alleges that ADT / Tyco inadequately protected sensitive information, leading to the 2010 burglary of an Enfield, CT warehouse utilized by pharmaceutical company Eli Lilly. The 2010 burglary of the warehouse resulted in over $78 million of calculable losses to Lilly and was one of several large thefts connected by the FBI to a Florida-based Cuban burglary ring operating nationwide.

In denying the summary judgment motions of ADT / Tyco, the court cites evidence that a former employee of ADT / Tyco and relative of one of the burglars had access to confidential information long after his employment was terminated.

The complaint by Lilly also points to a number of other similar thefts at ADT / Tyco- secured sites as evidence of an alleged pattern of inadequate protection of its clients’ confidential information by ADT / Tyco. The burglars were able, in each case, to identify exactly where to cut entry holes, and avoid or disable all security provided by ADT / Tyco.

In a previous order requiring ADT / Tyco to produce additional documents, the court noted the other thefts: “This Court finds that the three additional burglaries were allegedly conducted by the same Florida based burglars and allegedly employed the same techniques as those employed in Eli Lilly’s burglary and occurred within a short temporal span of the burglary at issue herein,” the judge wrote.

The lawsuit specifically alleges that as part of an effort to sell Lilly on more security equipment, ADT / Tyco provided a report for Eli Lilly, called a Confidential System proposal, weeks before the crime.

The report highlighted faults and blind spots in the security system and detailed the “actual coordinates of every motion detector, beam, roof hatch, intercom, overhead door contact, fixed camera, panic button, card recorder, glass break sensor, control panel and keypad,” the court filings allege. The thieves burglarized the facility before Eli Lilly had a chance to act on the advice.

The burglars, who were eventually caught by the FBI, pled guilty to stealing thousands of boxes of Zyprexa, Cymbalta, Prozac, Gemzar and other pills – which were loaded into the back of a tractor-trailer after the thieves cut a hole in the roof, rappelled down into the warehouse and disabled the alarm.

In carrying out the Lilly theft, “Defendants Amaury Villa and Amed Villa crossed the entire length of the roof of the distribution warehouse to arrive at a small area comprising less than 1% of the total surface area of the roof,” the complaint states. “This location was identified on the 2010 ADT/TYCO Confidential System Proposal as above an area unmonitored by the existing security equipment and adjacent to the MCC room which was identified in the 2010 ADT/TYCO Confidential System Proposal by “x” and “y” coordinates as requiring additional intrusion detection devices and cameras.”

From there, the complaint continues, the defendants rappelled “from the small location on the roof to the unmonitored area of the warehouse and accessed the MCC room undetected by monitoring equipment and disabled the existing security systems master controls, telecommunications systems, and cell batteries to the back-up communications systems.”

In denying summary judgment on all but one of ADT / Tyco’s motions, the court also ruled against that company’s attempt to limit damages to a much smaller amount than that sought by the plaintiffs.

The case is styled Eli Lilly and Company v. Tyco Integrated Security, LLC. (F/K/A ADT Security Services, Inc.), et al. The case is pending in U.S. District Court in the Southern District Florida. Copies of the complaint and judge’s order are available on request.

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