A fired computer engineer for Fannie Mae has been arrested and charged with planting a malicious software script designed to permanently destroy millions of dollars worth of data from all 4,000 servers operated by the mortgage giant.

Rajendrasinh Babubahai Makwana, 35, of Virginia, concealed the Unix script on Fannie Mae's main administrative server on October 24, the same day the Unix engineer was terminated, according to court documents made public Tuesday. His script was programmed to remain dormant for three months, when it would greet administrators with a login message that read "Server Graveyard" and systematically replace all data with zeros on every production, administrative, and backup server in the company.

Makwana was arrested on January 7 and released on $100,000 bond. He faces a maximum sentence of 10 years in prison and is scheduled to be arraigned on Friday. Attempts to reach him and his attorney for comment were not successful. As a contract employee at Fannie's Urbana, Maryland data center for about three years, Makwana had unfettered root access to the entire company's system.

The plot laid out in a nine-page criminal complaint can fairly be described as vicious, even in the high-stress world of IT administration, where sabotage by disgruntled employees is common. Had his malicious script remained undetected, it would have wiped out millions of mortgage records just as the meltdown in the US housing market is reaching the boiling point.

The allegations also lay out a cautionary tale about the risk of lax security practices at highly sensitive enterprises. Despite his dismissal on October 24, Makwana's highly privileged computer access wasn't terminated until late into the evening because of bureaucratic procedures in Fannie's procurement department, according to court documents.

Shortly after Makwana was informed he was being fired, he logged in to Fannie's main development server and embedded a series of malicious scripts inside a legitimate program. To conceal the malicious payload, he created a page worth of blank lines between the legitimate code and the malicious code.

"When the program ascertained it was January 31, 2009, it would copy the rest of the files from the '.soti' file from the dsysadm01 server and run the .y.sh script," a FBI special agent wrote in a sworn statement that referred to Fannie as ABC to protect its identity. "The .y.sh script would place a blocker on the monitoring system disabling any ABC engineers from receiving a monitoring alert for any problems on any machines in the entire ABC environment for 61 minutes."

Makwana's script would then disable logins to Fannie's administrative and backup production servers; remove the root password appliance access; rewrite all data, including backup software, with zeros; and target any "high availability" software. It would then replicate itself to each of Fannie's 4,000 servers.

For thoroughness, the script would then execute all over again on a separate administrative server in case some of the company's servers couldn't be reached from the first one.

"Had this malicious script executed, ABC engineers expect it would have caused millions of dollars of damage and reduced if not shutdown operations at ABC for a least one week," the FBI agent wrote. "If this script were executed, the total damage would include cleaning out and restoring all 4,000 ABC servers, restoring and securing the automation of mortgages, and restoring all data that was erased."

It was only by chance that a senior engineer at Fannie stumbled on to the script five days after Makwana's dismissal, the agent stated.

The allegations demonstrate the awesome powers vested in a single, well-placed IT administrator, who with a few hundred keystrokes has the ability to wreak substantial damage on an entire economy. It also shines a light on the evil genius of an alleged disgruntled employee who took great pains to cover his footprints from forensics investigators he almost certainly knew would pore over the case later.

Like so many other saboteurs, though, Makwana also appeared to make careless mistakes. He allegedly planted his malicious script via a secure shell login from his Fannie-issued laptop using an IP address Fannie had assigned to him.

Shortly before planting the script, Makwana - a native of India who was employed by an unknown IT outsourcing firm - also emailed relatives in that country using a Fannie address and told them not to return to the US. ®

This story was updated to remove erroneous information about the firm Makwana worked for. Based on inaccurate information included in the criminal complaint, a previous version misstated the name of the firm.