According to Reuters, Larry Lee Ropp, a former employee with the Bristol West Insurance Group, had planted the device on the computer of a secretary to senior executives. The bugging only came to light when Ropp was fired, and asked another member of staff to remove the logger from the PC.
A keystroke logger, which can be in the form of software downloaded to a computer or a hardware device plugged into the back of the keyboard, monitors every key stroke on the keyboard, providing the controller with a complete record of the target's passwords and communications. Some of these devices can record, encrypt and forward e-mail messages, chat room conversations, and any other computer activity.
Ropp was indicted with trying to intercept electronic communications, which is an offence under federal wiretapping regulations, and carries a maximum prison sentence of five years. In the UK such an offence would fall under the Regulation of Investigatory Powers Act of 2000, better known as RIPA.
According to Reuters, an affidavit attached to the indictment alleges that Ropp had carried out the bugging to provide information for a class action against his employers.
Ropp is currently on bail, pending a hearing on 5th April.