## Facts

- Optimum Systems, Inc. (OSI) operated a computer facility in Rockville, Maryland under contract supporting the Federal Energy Administration (FEA), allowing remote terminal access over telephone circuits.
- Bertram E. Seidlitz worked at OSI as Deputy Project Director, helped prepare software at the facility, and was responsible for system security; he had full access to the WYLBUR software system.
- WYLBUR was a time-sharing text-editing and data-handling system; OSI held rights to use it and invested in adapting and maintaining it as a valuable business asset.
- Seidlitz resigned in June 1975 and later operated his own computer firm in Alexandria, Virginia.
- In December 1975, OSI personnel detected an apparent unauthorized session (a supervisor’s user initials appeared as active while the supervisor was not using the system).
- OSI investigated using (i) a monitoring function (“Milten Spy”) that recorded the intruder’s terminal activity and (ii) manual and telephone-company tracing to identify the source of the connection.
- Tracing linked the unauthorized access to telephone lines at Seidlitz’s business and later to his residence.
- Based on OSI’s investigative information, the FBI obtained search warrants for Seidlitz’s office and home and seized materials including WYLBUR-related printouts/source listings and other items connecting him to the intrusions.
- Seidlitz claimed he accessed the system to demonstrate poor security and did not commercially exploit or sell the software; he also contended WYLBUR was not “property” for wire-fraud purposes.

## Issues

1. Whether evidence derived from telephone tracing and OSI’s “Milten Spy” monitoring should have been suppressed as an unlawful interception under Title III (18 U.S.C. §§ 2510–2520) or as a Fourth Amendment violation.
2. Whether the evidence was sufficient to prove wire fraud under 18 U.S.C. § 1343, including (a) fraudulent intent and (b) that WYLBUR and OSI’s adaptations constituted “property.”

## Decision

- The Fourth Circuit affirmed Seidlitz’s convictions on two counts of wire fraud under 18 U.S.C. § 1343.
- The court held telephone tracing that identified call source without capturing substantive communications did not constitute interception of contents under Title III.
- The court held OSI’s “Milten Spy” monitoring was lawful because OSI consented as the system operator and the monitoring did not involve the type of “aural acquisition” targeted by Title III.
- The court concluded the warrants were supported by probable cause and the motion to suppress was properly denied.
- The court held the jury could reasonably infer fraudulent intent from Seidlitz’s unauthorized, concealed access and copying, even absent proof of later commercial use or sale.
- The court held proprietary software and related confidential computer-based information, including OSI’s version and modifications of WYLBUR, could constitute “property” under § 1343.

## Legal Principles

- Title III generally targets interceptions of the contents of wire communications; tracing that reveals the source of a call without acquiring content is outside Title III’s core prohibition.
- Title III’s consent exception permits interception where a party to the communication consents; a system operator may qualify as a party with respect to communications between a remote user and the operator’s computer system.
- Monitoring that records computer-session text/commands within the system, rather than capturing spoken words by listening, may fall outside Title III’s “aural acquisition” concept as applied in this case.
- Wire fraud under 18 U.S.C. § 1343 reaches schemes to obtain money or property by fraudulent means via wire communications; the government need not prove the scheme successfully produced commercial gain.
- Intangible commercial interests, including proprietary software, confidential computer code, and related know-how, may qualify as “property” protected by the federal fraud statutes when held and valued as business assets.

## Conclusion

The Fourth Circuit upheld wire-fraud convictions for unauthorized remote copying of proprietary software, ruling that non-content call tracing and consensual computer-session monitoring were lawfully used to establish probable cause, and that proprietary software and related confidential information could be treated as “property” under 18 U.S.C. § 1343.


United States v. Seidlitz, 589 F.2d 152 (4th Cir. 1978)