17 indicted in alleged software theft scam

May 5, 2000
Web posted at: 7:49 PM EDT (2349 GMT)

CHICAGO (CNN) -- A federal grand jury has indicted 17 people for allegedly conspiring to infringe the copyright of more than 5,000 computer software programs that were available through a hidden Internet site.

"This group is one of the oldest and most sophisticated networks of software pirates anywhere in the world," said Scott R. Lassar, U.S. Attorney for the Northern District of Illinois. "These defendants are accused of illegally reproducing copyrighted software and distributing it over the Internet."

Twelve of those indicted allegedly were members of an underground international group known as "Pirates with Attitudes" that disseminates stolen software, including programs not yet commercially available, the Justice Department said. These included a Microsoft Corp. employee who allegedly supplied company programs to the group members and to the Internet site.

The remaining five defendants were employees of Intel Corp., four of whom allegedly supplied computer hardware to the piracy organization in exchange for obtaining access for themselves and other Intel employees to the group's pirated software, which had a retail value of more than $1 billion, the statement said.

The investigation was made public with the February 3 arrest of Robin Rothberg, of North Chelmsford, Massachusetts, identified as a leader of the group by the Justice Department.

"This is the most significant investigation of copyright infringement involving the use of the Internet conducted to date by the FBI," said Kathleen McChesney, the special agent in charge of the FBI's Chicago Field Division. "It demonstrated the FBI's ability to successfully investigate very sophisticated on-line criminal activity."

Each of the 17 defendants was charged with one count of conspiracy to infringe copyrights, which carries a maximum prison term of five years upon conviction, along with a $250,000 fine plus possible additional financial penalties.

They will be arraigned in U.S. District Court in Chicago.

As part of the conspiracy, the PWAs had a site, known as Sentinel and located at the University of Sherbrooke in the Canadian province of Quebec, where they illegally uploaded and copied files -- including copyright software files, the Justice Department said.

The programs allegedly included operating systems, utilities, applications such as word processing and data analysis programs, and games and MP3 music files.

The members of the group were assigned roles: "crackers" stripped away the copy protection often embedded in commercially released software; "couriers" transferred software to the group; "packagers" tested and prepared programs for release by couriers; and "suppliers" funneled programs from major software companies to the group, the Justice Department said.

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