15 May 2000. Thanks to M.
Source: Law.com
Suits against ex-employees shed light on a little-known Florida firm that trains agents for the feds
Dan Christensen
Miami Daily Business Review
May 15, 2000
It's real life spy vs. spy, tucked away in a quiet northern section of Broward County, Fla.
Audio Intelligence Devices, a super-secret Coral Springs, Fla., company that sells surveillance equipment and operates secret agent training courses to law enforcement agencies worldwide -- including the FBI, CIA, Drug Enforcement Administration and the Internal Revenue Service -- has gone to court claiming it's a victim of corporate espionage.
In two civil cases, one of which recently was sealed by a judge, Audio Intelligence accuses former company executives who now work for competitors of swiping highly sensitive corporate trade secrets on their way out the door.
Meanwhile, one of the executives accuses the company of illegally selling spying equipment to the New York City Police Department. If the equipment was used to gather evidence, the executive claims, the evidence may be tainted.
Little is known about the company, Audio Intelligence, which has been manufacturing and selling surveillance equipment to the government for nearly three decades.
The company originally was operated by owner Jack Holcomb, a mysterious businessman who ran the company out of offices at Fort Lauderdale Executive Airport. Then, in 1992, Holcomb sold his business to a unit of giant Westinghouse Electric. In January 1998, Delaware-based Audio Intelligence was sold again. The seller was CBS, which earlier had merged with Westinghouse.
Audio Intelligence is owned by privately held Liberty Associates Management Group L.C., a holding company that in turn is owned by ex-Army officer, Joseph Wortley, according to Wortley's business partner, William R. Gates.
Gates -- no, not Microsoft's Bill Gates -- recently served as president of Audio Intelligence, but now oversees AID as managing member of Liberty Associates. He said he was a Naval officer in the submarine program. He declined to give his former rank.
The company, with gross annual sales Gates said were $12 million to $15 million, is involved in a trade whose course work includes teaching police officers and agents from around the nation up-to-the-minute lock-picking techniques and covert entry skills.
Clients include unlikely agencies such as the Department of Housing and Urban Development. Products include transmitters and "video surveillance kits" disguised to look like briefcases, surge protectors, cigarettes, billfolds, smoke alarms and tape measures.
(In an interview, Gates said the CIA is no longer a company client. Court papers filed by the company last November, and now sealed, say the company does work for the CIA.)
Helping the company maintain its low profile is the fact that the surveillance devices sought by the government are so exotic that Audio Intelligence often is the sole source of the supply.
Federal rules allow government buyers to use so-called "simplified acquisition procedures" when making sole-source purchases — a practice that eliminates the need to follow public bidding requirements.
But while little is known about the company, a dispute now taking place could affect the company's ability to maintain some of that secrecy. In addition, it raises questions about the propriety and legality of some of the company's activity.
Charles W. Goforth, one of two former Audio Intelligence executives who've been sued, says in court papers that he quit last September after learning the company unlawfully sold about 60 spy transmitters to the New York City Police Department.
Kim Douglas Sherman, Goforth's Fort Lauderdale attorney, said in court papers that those electronic bugs weren't legal at the time because they were not sanctioned by the Federal Communications Commission. If police used the devices to make cases without getting approval, he said in a brief interview, any evidence they produced would be tainted.
At the New York Police Department, spokesman Alan Krawitz said the department is not aware of any problems with its devices. "But we would not even comment about something like this, even if we were aware," he said.
In the court documents, Goforth claims that when he objected to the sale, the senior vice president of operations responded, "I like to live dangerously."
Goforth, via his attorney, declined to comment for this story.
Goforth, who's now president of his own surveillance device firm, Digital Security Solutions Inc. of Pompano Beach, also says in court documents that the company's chief operating officer told him the action was approved despite the illegality.
The company officials in question aren't identified by name in court papers.
Gates said there "was no basis" for Goforth's allegations and they were untrue. He said Goforth, whom he accused of trying to swipe AID's international business, was in charge of the department that handled those kinds of sales.
The dispute with Goforth isn't the company's only battle with a former employee. Audio Intelligence is involved in a civil case against the former administrator of its National Intelligence Academy, a spy school for law enforcement types.
Laurie Thurmond, who ran the academy from December 1997 until last May, is accused by Audio Intelligence of breach of contract and violating Florida's Trade Secrets Act. Thurmond now helps run the similar Law Enforcement Technology Centre -- a division of a rival Coral Springs firm, Innovative Surveillance Technology.
Audio Intelligence, in a complaint now sealed by Broward Circuit Judge Jeffrey E. Streitfeld, alleges Thurmond stole the company's secrets -- including the names and address of its government customers and students -- and gave them to her new bosses at Innovative Surveillance.
"In disseminating those names either by herself or through a third party, [Thurmond] has or is attempting to destroy the credibility of [Audio Intelligence] in maintaining the anonymity of the law enforcement officers that are trained," say court papers filed by the company. "In so doing, [Audio Intelligence] will lose its customers due to the impression that [it] cannot protect the people that it trains."
The suit, similar to the one brought against Goforth, sought unspecified damages and an injunction to halt the "misappropriation" of Audio Intelligence's trade secrets.
Thurmond declined to comment for this story. Plantation, Fla., attorney Robert D. Klausner, who represents Thurmond, was unavailable for comment. An attorney in his office, Adam Levinson, would not comment.
Gates and AID's Boca Raton lawyer, Carol A. Kartagener, also declined to comment on the Thurmond suit.
Ira Libanoff, a Fort Lauderdale lawyer who represents Innovative Surveillance, indicated he'd like to talk, but said he was "prevented" from doing so by the seal order imposed at the company's request.