U.S. Indicts 17 for Software Theft

May 5, 2000

U.S. Indicts 17 for Software Theft

By CHRISTOPHER MARQUIS
ASHINGTON, May 4 -- The Justice Department announced the breakup today of an international network of software pirates who used employees in top American computer companies to create a private library of more than 5,000 stolen programs accessible on the Internet.
Seventeen people from across the United States and Europe were indicted for copyright infringement, including six current or former employees of the Intel Corporation and the Microsoft Corporation. The other suspects were described as members of a software theft ring known as "Pirates with Attitudes."
The indictments came in the largest theft case to date involving intellectual property and the Internet, and underlined the challenges facing law enforcement these days.
Only four of the 17 people indicted had ever met, federal investigators said; the rest, who lived as far afield as Sweden and Belgium, as well as in 10 American states, knew each other only on the computer.
"The use of computers by criminals for criminal activity is growing," said Ross Rice, the spokesman for the F.B.I. in Chicago, which used one of the nation's few computer crime squads in pursuing its investigation. "This shows that in cyberspace, computer crimes may be committed by anyone anywhere. They really know no boundaries."
The case also underscored the spread of software piracy. The Software and Information Industry Association, a trade group, estimates global revenue losses from piracy at $11 billion. More than one-third of all new business software applications worldwide involve pirated materials, the group said.
According to court documents, Pirates with Attitudes was headed by Robin Rothberg, 32, of North Chelmsford, Mass. Mr. Rothberg was arrested on Feb. 3 and has since been released on bail. He could not be reached for comment.
The ring, which promoted members based on their contributions to the illicit software library, communicated in real time on private Internet relay chat channels. It maintained the library of thousands of stolen programs -- including software for operating systems, data analysis, music files and word processing -- on one of the Internet's oldest sites.
The Web site, identified as Sentinel, dates back to 1995, law enforcement officials said. It was not accessible to the public and was recently shut down.
Mr. Rothberg is said to have controlled access to the Sentinel site, which had hardware maintained by two of the suspects at the University of Sherbrooke in Quebec province in Canada. More than 100 users gained entry to the site, but to maintain their access they were required to upload, or provide new copyrighted files, to the library. They could then download files provided by other users.
Mr. Ross, the F.B.I. spokesman, said the Sentinel files were conservatively valued at $1.2 million, but that figure probably reflected a fraction of the overall amount lost to software companies, given that no one knows how many times specific programs were downloaded.
The F.B.I. began investigating Sentinel after receiving an informant's tip in Chicago, officials said. The two individuals at the University of Sherbrooke began cooperating with investigators in March 1999, and the computer supporting Sentinel was seized by the F.B.I. and Canadian authorities on Jan. 13.
Intel began cooperating with the F.B.I. after Mr. Rothberg's arrest in February, said Chuck Mulloy, a company spokesman. The Intel employees are said to have sent company hardware to the site operators in Canada to increase Sentinel's storage capacity. Four of the five have since been fired.
"We're gratified by the efforts of the F.B.I. and the U.S. Attorney's office," Mr. Mulloy said, "and we have indicated our willingness to continue to cooperate with them as we move this investigation forward."
Conspiracy to infringe a copyright carries a maximum penalty of five years in prison and a $250,000 fine, or, as an alternative, the court may impose a penalty amounting to twice the gross gain to any defendant.