In 27 Cities, U.S. Carries Out Raids in Software Piracy Case
By DAVID STOUT
ASHINGTON, Dec. 11 Federal agents carried out dozens of raids today against a far-flung network suspected of pirating billions of dollars worth of computer software ranging from operating systems to the latest music videos and movies over the Internet.
Agents seized computers and hard drives in at least 27 cities in 21 states in raids on businesses, university computer centers, Internet service providers and many residences. Foreign law enforcement people staged about 20 similar raids in Australia, Britain, Finland and Norway.
Treasury and Commerce department officials said more raids will be conducted in the weeks ahead. No arrests were made in the United States, partly because today's operations were aimed at gathering evidence. Some of the people implicated, aware that they could face charges of conspiracy or theft of intellectual property, are already cooperating with the authorities, department officials said.
The operation that culminated in today's raids, after a 15-month inquiry, is part of "the largest and most extensive investigation of its kind," Customs Commissioner Robert C. Bonner said.
The kind of goods stolen has included costly business programs, computer-security software, copyrighted games, music and digital videos "everything from the movie `Harry Potter' to the Windows operating systems," in the words of John C. Varrone, assistant commissioner in the Customs Service's Office of Investigations.
"This is a new frontier for crime," Kenneth W. Dam, deputy secretary of the Treasury, said at a news briefing. "The costs are enormous to both industry and consumers."
Philip Bond, the Commerce Department's under secretary for technological policy, said cyber-pirates steal an estimated $12 billion worth of technology and goods a year, according to the Business Software Alliance. American leadership in computers and software is "very much at stake" because of piracy, he said.
Officials said pirates of the ilk who were the targets of today's operation are not teen-age hackers but rather highly skilled computer professionals motivated more by challenge than greed.
"The money is made farther down the food chain," Mr. Varrone said. The pirated software soon reaches distributors who find a ready market, the officials said.
Officials said offenders could face up to three years in prison, upon conviction, and depending on their willingness to cooperate. By midday, the authorities said, more than 60 people in the United States had been identified as being involved in the pirating operation. Several suspects have already been charged overseas.
The target of the raids was the "Warez" group, a loosely affiliated network of software-piracy gangs that duplicate and reproduce copyrighted software over the Internet. Of special interest today was a Warez unit known as "DrinkOrDie," probably the oldest and best known in the Warez network, officials said, adding that DrinkOrDie members take special pride in having cracked and pirated the Windows 95 operating system three days before its release to the public.
Members of Warez includes corporate executives, computer-network administrators and students at major universities, government workers and employees of technology and computer firms, the Customs Service said today. The agency said the piracy ring is aided by insiders in stealing the software and that the ring relies on elaborate computer-security devices to minimize risk of detection.
Raids were carried out today at the University of California at Los Angeles, the Massachusetts Institute of Technology, Purdue University, Duke University and the University of Oregon, officials said. They said the universities themselves, like the various companies raided today, were not involved in the wrongdoing by their employees and were cooperating in the inquiry.
Cities where raids were staged included New York, Washington, Houston, Indianapolis, San Francisco, Boston, Philadelphia, Miami, Atlanta and Chicago, the government said.
Officials said some pirates have been remarkably brazen, some even boasting of their feats on their own Web sites. "They also view themselves as Robin Hood figures," the Customs agency said. "They seek an Internet devoid of rules or law."
This afternoon, government officials said they hope to change that perception. "This is not a sport, this is a crime," Mr. Bond said, adding that punishment could be "serious hard time" in prison.