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FBI seizes PCs in crackdown on illegal software di
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Citation-> PC Week, Nov 12, 1990 v7 n45 p1(2)
COPYRIGHT Ziff-Davis Publishing Co. 1990
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Title-> FBI seizes PCs in crackdown on illegal software
distribution. ('sting' operation)
Authors-> Zimmerman, Michael R.
Summary-> The FBI, working with software publishers Novell Inc and
Mustang Software Inc, has confiscated microcomputers,
software and other equipment in two separate raids in
Nashville, Tennessee. Two men are under investigation for
allegedly reselling unauthorized copies of commercial
software over private bulletin board systems. The Software
Publishers Association claims that software piracy results
in $1.2 billion to $2 billion in lost sales per year and
is working with the FBI to crack down on illegal
distribution. FBI agents are expected to conduct numerous
searches and equipment seizures throughout the US in Nov
and Dec 1990. A Novell employee infiltrated the Debini
BBS, operated by Nelson Idehan, and acquired parts of
unauthorized copies of WordPerfect and NetWare Care 1.0 as
well as Microcom Inc's Carbon Copy Plus. Another paid $20
to join James McFarland's Wet Paint BBS and obtained
$654.95 worth of illegal software. Officials estimate that
about 5,000 of the 25,000 BBS systems in the country are
engaged in piracy.
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Subjects-> Software protection_Legal aspects
United States. Federal Bureau of Investigation_Cases
Software Publishers Association_Cases
Software packages_Distribution
Computer industry_Crimes against
SIC Codes-> 9221; 3571
Article #-> 09588475
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By Michael R. Zimmerman
The FBI and the U.S. Attorney's Office are investigating two Tennessee
men for reselling unauthorized copies of commercial software over
private bulletin-board systems (BBSs), PC Week has learned.
Following a year-long "sting" operation that involved the FBI working
with Novell Inc. and Mustang Software Inc., federal agents late last
month confiscated PCs, software and other equipment in separate raids
on two Nashville homes, according to FBI officials and officials from
the software vendors.
The FBI and U.S. Secret Service, in conjunction with the Software
Publishers Association (SPA), are expected to conduct similar searches
and equipment seizures at numerous locations across the United States
within the next month as part of a national effort to curtail the
growing problem of illegal software distribution, one source close to
the SPA said last week.
Trading or reselling software without authorization from the developer
-- a copyright violation under U.S. law -- results in between $1.2
billion and $2 billion in lost sales annually in the United States,
according to Mary Jane Saunders, general counsel for the SPA, a
non-profit software organization in Washington.
"It's fair to say that we lose millions [of dollars] each year because
of piracy," said David Bradford, senior counsel at Novell Inc. in
Provo, Utah.
Novell worked closely with the FBI and Mustang Software in the
Nashville sting operation to penetrate two separate BBSs, one operated
by Nelson Idehan and one by James McFarland, according to an affidavit
filed with the U.S. Attorney's Office in Nashville.
As part of the operation, a Novell employee last spring paid a $25
membership fee to join Idehen's BBS, known as Debini, according to the
affidavit. Between July 30 and Oct. 12 the Novell employee acquired
portions of unauthorized copies of WordPerfect Corp.'s WordPerfect and
Novell's NetWare Care version 1.0. The employee also paid an
additional $50 and acquired an unauthorized copy of Microcom Inc.'s
Carbon Copy Plus. The three packages carry a combined list price of
$1,189.
A Novell employee also paid $20 to join McFarland's BBS, called Wet
Paint, according to the affidavit. Between June 25 and Oct. 5 the
employee acquired through Wet Paint unauthorized copies of WordPerfect
and Borland International Inc.'s Reflex database software, the list
prices of which total $654.95.
Neither Idehen nor McFarland has been charged in the investigations.
The U.S. Attorney's Office is preparing to present the case to a grand
jury, said Assistant U.S. Attorney Lee Deneke in Nashville, who
declined further comment because the case is still pending. Neither
Idehen nor McFarland could be reached for comment.
Should the case go to court, Idehen and McFarland could face maximum
penalties of $50,000 or five years imprisonment for each copyright
infringement, said Peter Beruk, litigation manager at the SPA.
While the majority of the 25,000 BBSs in the United States operate
legally as a forum for computer users to exchange ideas and public
domain software, Beruk estimates that the ranks of pirate systems have
swelled to more than 5,000.
As a result, firms such as Novell and Microsoft Corp. have beefed up
their security teams.
"We've had a staff of people monitoring bulletin boards on and off for
years," said Deborah Vogt, senior paralegal to Microsoft in Redmond,
Wash. "But since about three to four months ago, we've had someone
monitoring BBSs full-time."
BBS software developers such as Mustang have also joined the fight to
protect losses caused by the illegal use of their systems to download
software.
"Wildcat BBS makes it easy to transfer files because all you need is a
modem and the [phone] number of a bulletin board," said Rick Heming,
vice president of operations at Mustang.
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