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Spokane, Washington  Est. May 19, 1883

Capital One hacking suspect, a transgender Seattle woman, is denied request to be moved from men’s prison

By Nicole Brodeur Seattle Times staff reporter

Paige Thompson, accused in one of the largest data breaches in the country and a transgender woman, will remain in custody in the men’s wing of the Federal Detention Center in SeaTac, a federal judge ruled on Friday.

Thompson’s court-appointed attorneys sought to have her moved to a halfway house, arguing that the former Amazon software engineer had no criminal record before her July 29 arrest for allegedly hacking into Capital One’s computer system, accessing credit-card applications and compromising the personal data of more than 100 million people.

But federal prosecutors successfully argued that Thompson, 33, poses a serious flight risk, noting that she has no stable residence or local family ties; is unemployed; and has a history of drug abuse and mental-health issues, including threats to kill herself and to shoot up the office of a California social-media company.

She is facing a sentencing range of at least 10 years.

Capital One already has set aside $100 million to cover costs connected to the breach, and has suffered losses to its share price.

Thompson is not the first transgender inmate being held in the Federal Detention Center, said Assistant U.S. Attorney Andrew C. Friedman. As of 10 days ago, he said, there were “several,” and that the Bureau of Prisons’ policy – written in 2017 and updated last year – is to support those inmates’ mental and physical health, and keep them secure.

Whether transgender inmates are placed with male or female inmates depends on how far along they are in their transition.

“She generally feels safe,” Friedman said of Thompson. “It has been successful so far. We don’t want there to be problems.”

In U.S. District Court on Friday, Thompson sat between her two lawyers in a short-sleeved, tan prison uniform, looking pale and hunched, frequently running her hand through her hair, which was pulled into a small ponytail. She kept the fingers of one hand fanned over her mouth for most of the proceeding, only looking up when she was addressed by Magistrate Judge Michelle L. Peterson. She never spoke.

Her attorney, assistant federal defender Mohammad Ali Hamoudi, argued that the detention center is “not equipped” to care for someone with gender dysphoria and that the risk of someone committing suicide is not enough reason to hold them.

Hamoudi also disputed Thompson’s drug history, saying she has been clean since 2017, and could find permanent housing with the help of Seattle Counseling Service. He argued that Thompson has family in Arkansas, plus two Seattle-based friends who wrote letters to the court on her behalf, as well as her mental-health and legal communities.

“She has me, her co-counsel, four paralegals, two investigators,” Hamoudi argued.

Prosecutors were “speculating” on what could happen if Thompson was released to a halfway house. “We’re getting ahead of ourselves,” he said.

In addressing Thompson, Peterson said she didn’t see anything that would keep her in the area to attend her next court date. She noted Thompson’s “erratic and bizarre behavior” – Thompson’s screen name is actually “erratic” – including an online post in which Thompson wrote that she was “Ready to check out. I don’t care if it’s death or jail.”

“We don’t know much about you,” Peterson said. “We know that you need treatment and are going through a transition.”

But she noted threats Thompson had made to an employee at a social-media company, as well as to the employee of a bitcoin exchange, who notified prosecutors this week after reading news reports of Thompson’s case.

“You are highly talented,” Peterson told Thompson, “and have the means and ability to create havoc in our banking system.”

After the hearing, Hamoudi had little to say about his client’s state of mind: “You could see in court how she’s doing.”

Tim Carstens, who said he has known Thompson since she was a teenager, came to court to support his friend. Carstens, who works for an information security firm, said his frustration with the case is that the Capital One hack was “inevitable.”

“Paige’s methods were anything but sophisticated,” he said. “Frankly, it blows my mind.”

Carstens hasn’t been in touch with Thompson, since her access to email has been revoked. But they did speak before her arrest, via Twitter.

“My principal concern is that she receives the health care that she needs.”