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     Counterfeit Microsoft Software,
Guns Seized In Raid 02/22/95
ALHAMBRA, CALIFORNIA, U.S.A., 1995
FEB 22 (NB) -- Los Angeles County
Sheriff's deputies have seized tens
of thousands of counterfeit Microsoft
software packages, computers used to
copy the software, packaging,
manuals, certificates of
authenticity, $64,000 in cash, three
handguns, and an assault rifle in
raids at numerous locations. Four men
were also arrested in the raids.

    The counterfeit software has an
estimated retail value of over $5
million. The arms, 20,000 completed
software packages, printing plates
for instruction manuals, and the cash
were seized at a printing business. A
deputy told Associated Press the
company had produced about 83,000
manuals.

    Microsoft officials were
particularly concerned because this
is the first time a counterfeit group
using a Microsoft certificate of
authenticity has been arrested.

    Microsoft spokesperson Erin
Carney told Newsbytes the raids are
the largest in terms of amount of
product seized. Carney said the
counterfeiting group is well
organized "with lots of tentacles
into the community."

    The raids were the culmination of
a six-month investigation by the Los
Angeles County Sheriff's Department.
Deputies arrested: Chuw Ping Kwan,
25, and Gin Ping Kwan, 26, of
Alhambra; Kim Fee Chean, 24, of Los
Angeles; and Kim Fong Chean, 26, of
Temple City. The four men were booked
for investigation of conspiracy to
commit counterfeiting. Bail was set
at $1 million each.

    The arrests were made after
undercover officers sold Kim Fee
Chean 5,000 Microsoft holograms,
quarter-sized certificates of
authenticity, on February 15, and
returned later to sell him another
set of 5,000 more holograms two days
later.

    Microsoft, along with the
Business Software Alliance,
"vigorously" pursues software
counterfeiters. Readers who suspect
they may be using, or suspect a
dealer of selling, counterfeit
Microsoft software, can call a
special toll-free number. Microsoft
says it isn't interested in
prosecuting the user who has
unknowingly purchased counterfeit
product.

    (Jim Mallory/19950222/Press
contact: Erin Carney, Microsoft, 206-
882-8080; Public contact: 800-785-
3448 to report Microsoft counterfeit
product)

      "Davy Jones" BBS Operator Gets
Probation, Home Arrest 03/10/95
WASHINGTON, D.C., U.S.A., 1995 MAR 10
(NB) -- A US District Court sentenced
the operator of the "Davy Jones
Locker" bulletin board system to 24
months probation and six months of
home confinement, with the first
three months monitored by an
electronic bracelet.

    "Davy Jones" operator Richard
Kenadek is also required to forfeit
all the computer equipment related to
the operation of the BBS (bulletin
board system).

    Kenadek was indicted in August
1994 and in December of that year
pleaded guilty to criminal copyright
infringement for using the BBS to
illegally distribute copyrighted
software for financial gain.

    Following a four-month
investigation by the Software
Publishers Association (SPA) in which
the organization's representatives
monitored the board and downloaded
copyrighted business and
entertainment programs that were
posted on the BBS without permission
of the publishers, the Federal Bureau
of Investigation (FBI) then obtained
a search warrant and raided the site
in a Boston suburb.

    Sandra Sellers, SPA director of
litigation, said the Kenadek case is
the first time the criminal statute
under the copyright law has been used
to prosecute a bulletin board
operator. "This is a crucial turning
point on the road to eliminating
piracy among bulletin board
operators," said Sellers.

    According to the SPA there were
more than 200 commercial copyrighted
programs available to board
subscribers for downloading from a
special section reserved for
copyrighted software at the time of
the FBI raid. Subscribers paid $49
for three months of board use or $99
for a full year. SPA Executive
Director Ken Wasch told Newsbytes the
pirated software ran the gamut from
games to business applications.

    The SPA said users were also
encouraged to upload, or contribute,
copyrighted software they possessed
for further unauthorized
distribution.

    Based on its investigation, the
SPA filed a civil suit against
Kenadek the day the FBI conducted its
raid. That suit has been settled as
part of Kenadek's guilty plea. That
settlement included a stipulation
that Kenadek not participate in any
way in the operation of a computer
bulletin board for one year.

    Most of the estimated 50,000
bulletin board systems in North
America are scrupulously honest,
according to Wasch. But if you
operate a board that allows
distribution of copyrighted software,
watch out. "The prosecution of
Kenadek sends a message to bulletin
board operators that both civil and
criminal remedies will be vigorously
pursued for the unauthorized
distribution of copyright software.
This helps to ensure that the
nation's bulletin board operators
obey the copyright laws," said
Sellers.

    The 42-year old Kenadek may have
gotten off lightly. Kenadek was
charged before software piracy become
a criminal offense. Consequently he
could have received up to one year in
jail and up to $100,000 fine.
Possible penalties for software
piracy now include up to five years
in jail and a $250,000 fine. However
Wasch is satisfied. "Considering all
the options we are pleased with the
sentence. We don't view it as a
defeat for the prosecutors at all.
Six months of home detention is not
fun."

    The SPA operates a toll-free
number to receive information about
possible software copyright
violations and pirate bulletin
boards. The organization said it
receives more than 100 calls per week
on the hotline.

    (Jim Mallory/19950310/Press
contact: Peter Beruk, SPA, 202-452-
1600; Public contact to report
possible piracy: SPA, 800-388-7478)