DOJ Set to Issue News Corp. Subpoenas, as Hacking Investigation Grows

The U.S. Justice Department is preparing subpoenas as part of its investigation into <"">News Corp. As we’ve reported previously, the FBI is investigating allegations that a British tabloid owned by News Corp. may have attempted to hack voicemails belonging to victims of the 9/11 terrorist attacks. The Justice Department is also trying to determine if alleged bribes paid to British police officials in connection with the hacking charges could constitute a violation of the Foreign Corrupt Practices Act, which makes it a crime for a U.S. company to bribe officials overseas.

Reporters from the tabloid, News of the World, are known to have hacked into phone voicemails belonging to thousands of people, including those of a teenage murder victim, British Prime Minister David Cameron, and scores of celebrities. Since that scandal broke, allegations have been made that News of the World may have hacked into phones belonging to victims of the 9/11 attacks. The company faces investigations in the U.K. – where Rupert Murdoch and his son, James, were recently forced to testify before a committee of the British Parliament – and the U.S.

According to a report from The Wall Street Journal, the issuance of subpoenas would represent an escalation in the U.S. scrutiny of News Corp. The company has been bracing for both the Justice Department investigation, as well as a possible by the U.S. Securities and Exchange Commission. An unnamed source close to the media conglomerate called the preparation of subpoenas “a fishing expedition with no evidence to support it,” the Journal, a News Corp.-owned entity, said.

In addition to investigating the 9/11 victim hacking allegations and police bribery accusations, U.S. investigators are also said to be looking into previous allegations of hacking by another News Corp. division that were made in 2004. At the time, News America Marketing, News. Corp.’s advertising division, was accused of repeatedly hacked into the computers of a competitor, New Jersey-based Floorgraphics, in an alleged attempt to steal its business.

According to an NBC News report, the claims became a key part of a civil lawsuit that Floorgraphics filed against News America. The case was resolved six days into a 2009 trial, when News America agreed to buy Floorgraphics’ assets for $29.5 million as part of an out-of-court settlement.

The News America Marketing allegations were never prosecuted, though according to NBC News, they were reported to the FBI in 2004, and prompted investigations by both the Secret Service and the New Jersey Division of Criminal Justice. But now, the latest allegations involving News of the World have renewed the FBI’s interest in the case. A lawyer for Floorgraphics told NBC News that he was recently contacted by two federal prosecutors and an FBI agent seeking information about the claims. He said the agents were involved in the News of the World investigation, and were trying to see if they could find a “jurisdictional hook” for similar conduct inside the U.S.

According to a report from Bloomberg News, New Jersey Senator Frank Lautenberg yesterday wrote to the Justice Department to ensure that it was “fully aware of the case of Floorgraphics and News America, as it may be relevant to your current investigation.”

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