Investigator in Hewlett-Packard Spy Probe to Plead Guilty

SAN FRANCISCO – Federal prosecutors are poised to score their first victory in their investigation of Hewlett-Packard Co's (HPQ) ill-fated boardroom spying probe, after a private investigator agreed to plead guilty to identity theft and conspiracy charges.

Bryan Wagner, 29, of Littleton, Colo., will enter his plea during his scheduled arraignment hearing on Friday morning in San Jose federal court, said his lawyer Stephen Naratil.

Wagner, however, was just the bottom of a long chain of command involved in the probe that reached into HP's top ranks. His plea deal includes an agreement to testify for the prosecution, which doesn't bode well for higher-ups who Naratil said had Wagner do their dirty work.

"He's just the little guy who was used by these other people who had a lot more knowledge of the conduct he was performing," Naratil said. "That's why they didn't do it. That's why they passed it off to someone who would do it. It's a classic case of pass the buck."

Wagner is accused of secretly obtaining a journalist's Social Security number, using that number to create an online account with the telephone company in the reporter's name and accessing the detailed phone logs. He also is accused of conspiring to illegally obtain and transmit personal information on HP directors, journalists and employees in the course of HP's crusade to ferret out the source of boardroom leaks to the media.

Naratil said Wagner was assured "numerous times by different people" higher in the HP probe's ladder that his investigative methods were legal. The attorney declined to say whom Wagner would be testifying against or what he had already told prosecutors.

A spokesman for the U.S. Attorney's Office in San Francisco declined to comment.

Wagner faces a mandatory minimum prison sentence of two years on the identity theft charge, and a maximum of five years for conspiracy.

Wagner and four others still face charges in a California court for their alleged roles in the spying probe.

The others charged in Santa Clara County Superior Court last October were former HP Chairwoman Patricia Dunn, who initiated the investigation; former HP ethics chief Kevin Hunsaker, who directed the probe; and third-party investigators Ronald DeLia and Matthew DePante.

The five each face four felony counts of conspiracy, fraud and identity theft and have pleaded not guilty. Their next hearing is scheduled for Jan. 17.

Federal and state prosecutors say that HP first contracted the leak probe work out to DeLia, who runs a Boston-area detective firm called Security Outsourcing Solutions and had worked with HP for several years. DeLia then contracted the work out to DePante's Florida-based company, Action Research Group, which turned to former employee Wagner to obtain the private phone logs, prosecutors say.

Representatives for the state attorney general's office did not immediately return phone calls late Thursday. It was unclear whether the state would be forced to drop the charges against Wagner because of the competing federal charges.

HP has declined to comment on Wagner's case because he didn't work for the company.