Sweeping Series of Police Raids Across the United States Uncovers Large Quantities of Counterfeit Microsoft Software

More Than $2 Million Worth of Counterfeit Product Seized; Raids in up to Seven More States Expected Soon

Redmond, Wash. — June 28, 1994 — Microsoft Corporation announced today a series of police raids in California, Georgia, Louisiana, Maryland, Texas and Virginia have uncovered a large amount of counterfeit Microsoft® software, including the Microsoft MS-DOS® and Windows™ operating systems, the Bookshelf® CD-ROM reference library, and Works. The counterfeit Bookshelf and Works products were found in CD-ROM format.  All other counterfeit software appeared as packaged product with floppy diskettes.  Over 13,000 counterfeit packages and numerous components were seized, amounting to an estimated total street value of more than $2 million.

“The geographic scope of the raids and the amount of counterfeit product found suggests we’re dealing with a large-scale counterfeit software distribution ring operating across the United States,” stated Anne Murphy, corporate attorney at Microsoft.  “We’re outraged by the scope of the operation and the fact that our honest customers are being duped into believing they are acquiring legitimate Microsoft software.”

None of the counterfeit operating system software discovered during the raids — including MS-DOS versions 4.01, 5.0, 6.0 and 6.2, and Windows versions 3.1 and 3.11 — contained the anti-counterfeiting security features that must accompany legitimate Microsoft operating system software.  Among the security features missing were version-specific holograms, 3M® Confirm labels, and the Microsoft Certificate of Authenticity.

The first series of counterfeit raids began in February at Grey Computer, Inc. of Bowie, Md., and at Advanced Business Concepts, Inc. of Springfield, Va.  In addition to the counterfeit product seized at both locations, business records were confiscated that revealed a connection to a Texas distributor.  Following a brief investigation, police raided Direct Wholesale of Houston, Texas, a week later.  Sales receipts and business records seized during the Houston raid disclosed a third source of the counterfeit product in Southern California.  Additional undercover investigations led to a series of police raids in late February at Alpha Data Research of City of Industry, Calif.; A-Technology of Baldwin Park, Calif.; Hypertec USA of Walnut, Calif.; L.A. Magnatech of El Monte, Calif.; and Zesta Computer of Alhambra, Calif.  A series of raids at Bristone of City of Industry, Calif., immediately followed.  Materials apprehended during the March raids led to additional seizures against Micro Equipment Corporation of Atlanta, Ga.; Sulaco Communications, Inc. of Sulphur, La.; and Tek-Shop of Sulphur, La.

Microsoft has filed copyright infringement lawsuits against all the businesses listed above and their principals. All cases are pending.

“Because of materials seized during all of these raids, we now have active investigations against additional businesses and individuals involved in the operation in California, Florida, Georgia, Illinois, New York and Texas, among other states,” stated Murphy.  “We anticipate additional raids and seizures in the very near future.

“People who knowingly or unknowingly obtain counterfeit products not only expose themselves and their businesses to the threat of damaging computer viruses, they also become ineligible for product support or upgrades,” continued Murphy.  “Microsoft does not license OEMs to distribute MS-DOS, Windows or multimedia products without a computer system.  Consumers should be alert for possible counterfeit OEM versions of Microsoft products offered on a standalone basis.  For OEM systems products, always look for the anti-counterfeiting hologram and label.  If they’re missing, the product is counterfeit.”

Consumers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft Piracy Hotline toll-free at (800) RU-LEGIT (785-3448).

Founded in 1975, Microsoft (NASDAQ “MSFT”) is the worldwide leader in software for personal computers.  The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft, MS-DOS and Bookshelf are registered trademarks and Windows is a trademark of Microsoft Corporation.

3M is a registered trademark of Minnesota Mining and Manufacturing Company.

Editor’s Note:  MS-DOS is a trademarked product name. Please do not abbreviate in any way.