Is Your Software Stolen?

Annie Jones watched as Baldwin Park, California, police officers surrounded a building containing the offices of Compact Media. Jones (not her real name) had been staking out the place since receiving an anonymous tip that it actually housed a software counterfeiting operation. The police had their guns drawn as Jones glanced at her watch: 2:30 a.m., March 6, 1998.

Suddenly, people began to leave the building, and the officers moved in. They nabbed one of the employees, Kenneth Khoung, at his sport utility vehicle. In his car they found 3400 counterfeit copies of Microsoft Office Professional. Police also apprehended Shawn Wang, the 24-year-old owner of the counterfeiting plant.

Inside the building, Jones and her partner, investigators for Microsoft, found four CD replicators (worth over a million dollars each), two silk-screening machines for printing CD labels, three shrink-wrap devices, and more--enough to manufacture and package several hundred thousand CDs a month.

The next day while searching Wang's car, investigators found a receipt from a local storage facility. There they hit more pay dirt: an estimated $4 million worth of counterfeit Microsoft software, still on CD spindles.

All in all, six people were arrested. Three--Shawn Wang, Kai Lin Chen, and Kenneth Hoa Khoung--were charged with possession of counterfeit materials and counterfeiting equipment. Wang had not been sentenced at press time. According to Baldwin Park Detective Chris Hofford, "The max he can get is eight to ten years." Chen and Khoung will each serve a maximum of two years.

Does this incident sound more like a detective movie than a day in the life of software company employees? It might come as a surprise to learn that when you go shopping for software bargains, you may actually be contributing to the wealth of criminals like Shawn Wang--or of even worse characters.