column one : high-tech piracy hits home : asian software counterfeiters have set up shop in the southland, lured by big profits and low risk. huge losses threaten to sap the strength of a key u.s. industry.

It was a case of forged checks that brought the representative to the dead end of the quiet Roland Heightsde-sac.
But they found a fake copy of the $400,000 Microsoft Encarta 95 CD at the home of Mingjin Jin and his wife piferro.
The ROM encyclopedia from China and 48,000 fake holographic photos.
The March 17 raid was a very familiar scene for the Los Angeles County Sheriff\'s Asia organized crime group, which has been on the front line in the fight against global counterfeiters from China, immigrant communities from Hong Kong and Taiwan to Southern California.
While the international community\'s focus is on the trade war that the Clinton administration has broken out with Beijing over technology piracy, there is growing evidence that China and other Asian countries are exporting counterfeit products ---
And their expertise in manufacturing. -
To America.
In some ways, this is an old story: where crime is transferred to money.
But it is also a typical Southern California phenomenon, at the expense of the region as a hub for entertainment, technology, Asian immigration and Pacific trade.
This position has brought economic vitality, but it has also brought vitality to criminals who think the United States is huge. S.
The market is expected to become an area of global expansion.
Since the beginning of this year, delegates have split up two rings, confiscated counterfeit equipment worth millions of dollars, and thousands of fake security devices such as Microsoft software, licenses, manuals and seals, and holographic photography.
Semi-automatic weapons, pistols and explosives were found in raids at Roland Heights and in homes elsewhere in the San Gabriel Valley, one of Asia\'s most populous regions.
Microsoft in March
Awarded $5, the main target of domestic pirates.
6 million in a civil suit against a Hong Kong resident living in Los Angeles, he was charged with distributing 50,000 copies of Microsoft MS-
From coast to coast, popular operating system software DOS and Windows.
But the Redmond, wosh. -
Software giant--
Over the past two years, the company has filed more than a dozen civil lawsuits against alleged counterfeiters in Los Angeles ---
According to company lawyers, no money has been seen from the latest awards.
In fact, high profits and the lowest penalties make this form high.
Technology Crime is a criminal\'s dream and a nightmare for the police.
\"If I\'m going to be a criminal, I\'m going to be a counterfeiter, not a drug dealer,\" said dunpster Rich, a private investigator specializing in forgery in New York City.
Expansion of armed and welfare
Because computer software is very cheap and easy to copy, criminals who are proficient in this new counterfeit field are even more worrying.
Some have warned that the phenomenon could undermine high levels.
The combination of the venture spirit and the risk of technical genius has established an industry that is essential to the national competitive power.
In fact, counterfeiters are stealing intellectual property and attacking the United States. S.
In their most lucrative market, software companies steal the revenue they need to fund the next generation of ideas.
\"If it is not controlled, this trend may cause great damage to software producers,\" said Christopher Westland, associate professor at the University of Southern California . \".
\"The marginal cost of software is small, but the fixed cost is huge.
The company has invested hundreds of millions of dollars to develop products like Windows.
In order to recover your fixed cost, you have to sell a large number of copies.
\"According to Microsoft and other companies, apart from self-
Stakeholders.
They argue that counterfeit software, which is not protected by warranty or service agreement, is usually produced with cheap materials or equipment and has high defect and virus incidence.
Microsoft says government agencies, hospitals and others have inadvertently bought defective counterfeit software while looking for a minimum bid.
However, independent experts say the risks faced by consumers are exaggerated.
They claim that illegal software is usually as good as real software.
In fact, this is why the problem is so hidden, not only the bottom line of software manufacturers, but also the credibility of the industry.
\"From the user\'s point of view, there is little risk in using pirated software,\" Westland said . \".
\"It\'s not like buying a fake Watch in Hong Kong, where the sport will collapse in six months.
\"There\'s $40 in the United States --billion-a-
The software market of one year, when people or businesses make unauthorized copies for their own use, the most common form of piracy will appear.
But industry officials believe counterfeit goods account for a growing share of the $2.
Loss of $2 billion per yearS.
Sales caused by piracy.
\"The amazing phenomenon over the past few years has been how the connection between Asia and the United States has strengthened. S.
\"Alison Gilligan, a senior anti-lawyer, said
Piracy experts at Microsoft, the world\'s largest software producer.
He said: \"This has a strong connection to forgery, obviously an organized crime.
\"California law enforcement officials are leading the national fight to stop Asian criminal groups from using trade routes not only for counterfeiting, but also for smuggling drugs and people and money laundering.
FBI director Louis J.
Freeh said at the Boston crime conference that the agency is looking for 50 new agents and increasing contact with Asian police in the hope of slowing the spread of criminal gangs across the Pacific.
Robert Kruger, Executive Director, Business Software Alliance, Washington, D. C. C. , anti-
Pirated organizations, representing leading commercial software companies in the United States, said the problem had not appeared on \"North American radar screens\" in an important way until recently ---
Many people in this industry are not fully aware of this.
\"I think there is a lot of ignorance (In the industry)
\"Progress has been slow in recognizing that this is a serious problem,\" he said . \".
Like its peers in drug trade, global software counterfeiters
Financing and mobile.
Sometimes they smuggle counterfeit products made in Asia.
More often, according to Gilligan and others, the software is partially produced and then assembled in the country with foreign components.
Materials from the fake lab are easy to access and relatively cheap: computers, disks, or CD-
ROM copying machine, laser printer, shrink machine
Packaging machines and people who are willing to produce labels and packaging.
The most often smuggled goods to the United States are holographic images. -laser-produced three-
Size image--
As a sign of authenticity, it is used on software packaging.
These pictures are expensive and difficult to copy. U. S.
According to law enforcement officials, holographic manufacturers have historically been on the right side of the law, fearing alienating their legitimate customers.
But the same code of conduct does not apply in China, where fake holographic photographs are tracked to relatives of manufacturers or senior government officials associated with government agencies. U. S.
Distributors of fake CD
Rom and floppy disks usually work from behind the van, selling products to small computer manufacturers who sell products with machines or retailers who are willing to break the law to make greater profits in exchange for cash. A two-
There is a tiered pricing system with higher prices
High quality counterfeit products including holographic images and other safety signs.
The return could be huge, with a potential increase of 10 times the cost of production.
Microsoft officials say counterfeit software is typically sold 10% to 25% less in the United States than legal products, and the retail price of legal products ranges from $50 to $300.
False proof of authenticity may start at $1, and the price of holographic photos ranges from $1 to $10.
Officials said on February,
A month\'s investigation in the San Gabriel Valley led to the largest in the United States. S.
The forgery operation in Microsoft\'s history is also the first operation involving the falsification of authenticity certificates, which are produced on special paper commonly used in currency and marked with a safety seal.
Six men were arrested during the raid and more than $4 were captured.
The value of counterfeit software, materials and equipment is 7 million yuan.
A few weeks later, in Roland Heights, delegates investigating counterfeit check cases stumbled across a shipment of weapons, plastic explosives, counterfeit software and holographic photographs.
Law enforcement said they were investigating links between five defendants, including Kim and Luo, and the Bank of Huaqing. S. -
Criminal groups linked to powerful underworld organizations--called triads--in Hong Kong.
Because the software itself is not illegal, it is difficult for law enforcement officers to prove misconduct without an informant.
Even those caught by fake software in contraction
Packaging machines face lighter penalties than their drugs
Running, although the United StatesS.
Fake law is one of the toughest laws in the world.
According to federal law, the maximum criminal penalty for copyright infringement is a fine of $250,000 and a five-year imprisonment.
According to California law, the maximum penalty for a forgery is six years in prison.
However, most cases are not prosecuted due to lack of evidence, or are eventually prosecuted in the civil court, where the fine turns out to be invalid. An anti-
According to the frustrated United States, piracy on the Pacific side will not succeed unless Asian authorities cut off the supply of money, expertise and counterfeit productsS. officials.
The quality of global cooperation is a factor that the Clinton administration has forced its Asian trading partners to combat piracy within its borders.
\"Cutting off foreign supplies allows domestic law enforcement to focus,\" said assistant US attorney Lee altschler. S.
Lawyer in San Jose
Officials acknowledge that the possibility of finding these counterfeit products and components in millions of container shipments through West Coast ports every year is slim.
A roll of fake holographic photos worth tens of thousands of dollars can easily be hidden in a suitcase or coat pocket. Fake CD-
CDs, CDs and cassette tapes are smuggled into the United States and are labeled with false labels that identify them as blank or legitimate goods.
\"The more effort we put into it, the more complicated the smugglers are,\" said Dennis shentani, assistant special agent in charge of the United States. S.
Los Angeles Customs office.
When pirates operate using the latest technical expertise and equipment, the situation becomes more difficult and can take advantage of the opportunities that many people who hunt them down do not even exist when they graduate from the police academy.
Detective Jess Bembry, Los Angeles County sheriff, went through Microsoft once.
Pirate training course but not feeling well
Equipped to fight in a high world
Technical crime.
\"Our law enforcement agencies do not have the financial resources to buy goods, computers and software that the suspects are using,\" he said . \".
\"They are much more advanced than we are.
The Times staff writer Dennis Hamilton contributed to the story.