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FBI nabs four in $10 million software piracy bust



By Richard Stenger
CNN Sci-Tech

(CNN) -- FBI agents in the Los Angeles area have seized more than $10 million worth of counterfeit Microsoft programs and arrested four suspected software pirates and in a series of raids.

The programs included the first apprehended disk copies of the most recent version of the Window Millenium Edition (Me) operating system, according to Microsoft.

"Also seized was the first attempted high-quality replication of Microsoft's innovative anti-counterfeiting hologram technology," said Microsoft spokesperson Tara Gajadhar.

The Microsoft hologram, unveiled 18 months ago with the launch of Window 2000, was designed to protect Microsoft disks from piracy. In the bogus disks, the hologram was attached as a sticker. In authentic copies, the hologram is embedded in the disk, said FBI spokeswoman Cheryl Mimura.

The bureau's Los Angeles field office, which conducted the bust Thursday, arrested three Americans and one Taiwanese man on charges of manufacturing and distributing counterfeit Microsoft programs in the San Gabriel Valley. A fifth suspect remains at large.

The counterfeiting operation has connections with organized crime in Asia, authorities said. More than 15,000 disks were seized, including copies of Windows 98, Office 2000 and Windows NT software, Microsoft said. The fake programs had an estimated worth of $10.5 million.

"This investigation has been going for about a year. Some of the disks have been leaked out to the market," said Rick LaMagna, manager of international anti-piracy investigations for Microsoft.

The U.S. Customs Service, Los Angeles Police Department and Los Angeles County Sheriff's Department took part in the raids, according to Mimura. "The investigation is still considered ongoing," she said.

Products of the software giant have long been targets of sophisticated software pirates. In the past several years, authorities have made major busts involving in California, New York, Georgia and Texas.

The largest in 1999 netted about $60 million worth of equipment and bogus software when police raided a counterfeit manufacturing plant in Westminster, California, according to LaMagna.







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