Wholesaler Convicted in Software-Piracy Case Scheduled to Begin Jail Term

Jeffrey Allen Solochek, a Tennessee-based computer-software wholesaler who in June pleaded guilty to fraud and perjury in connection with software-piracy charges, is scheduled to begin serving a 366-day jail sentence today at the Florence, Colo., federal penitentiary.

Redmond, Wash. - July 18, 1996 - Jeffrey Allen Solochek, a Tennessee-based computer-software wholesaler who in June pleaded guilty to fraud and perjury in connection with software-piracy charges, is scheduled to begin serving a 366-day jail sentence today at the Florence, Colo., federal penitentiary.

Solochek was arrested in Phoenix, Ariz., by federal agents in October 1995 on a five-count grand jury indictment following an extensive FBI investigation of software counterfeiting and a fraudulent scheme to obtain retail software upgrades at reduced prices under false pretenses.

Following his guilty pleadings on two of the five charges, Solochek was sentenced on June 21 by U.S. District Judge John T. Nixon to serve 366 days in federal prison and to pay $10,000 restitution to Microsoft Corp. Judge Nixon also sentenced Solochek to three years supervision upon release from jail, including prior approval from a probation office for all future employment.

"Software piracy is unfair to all the legitimate software vendors that are competing for customers," said Anne Murphy, corporate attorney at Microsoft. "This case sends a strong message that software theft - in any form - doesn't pay."

Solochek, who operated LED Wholesale and Best Software & Accessories in Nashville, Tenn., was convicted of falsifying retail invoices in order to receive free product upgrades during a 1994 Microsoft promotion. LED then sold the falsely obtained products to consumers. This scheme resulted in losses to Microsoft of more than $40,000.

The five-count grand jury indictment also charged Solochek with copyright violations and software counterfeiting; these charges were dropped when Solochek pleaded guilty to the wire fraud and perjury charges.

The Court granted Solochek 30 days before going to jail; he has resided at a local halfway house in Tennessee without receiving credit against time to be served. Under the terms of his sentencing, Solochek must report to the federal penitentiary in Florence by the afternoon of July 18, 1996.

According to the Business Software Alliance, the software industry lost potential revenues of more than $15.2 billion worldwide in 1994 - with more than $2.8 billion lost in the United States alone - from unauthorized copying of software.

To report software piracy or to obtain more information about protecting computer systems against damage from counterfeit software, call the Business Software Alliance Antipiracy Hotline at (800) 688-2721. Consumers or resellers with questions about the legitimacy of Microsoft® products should call the Microsoft Piracy Hotline at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com.

As part of its antipiracy efforts, Microsoft investigates computer resellers suspected of software piracy, based on leads obtained from a variety of sources, including the Microsoft Piracy Hotline. The first four waves of this antipiracy program occurred in the Silicon Valley area, Toronto, the New York and New Jersey areas, and Texas, where a combined total of more than 140 resellers were identified for suspected software piracy. The company is currently conducting investigations of suspected pirate resellers in other North American markets.

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.

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(Editor's note: Earlier this year, a computer-software wholesaler in Nashville, Tenn., pleaded guilty in U.S. District Court to one count of wire fraud and one count of perjury following an extensive FBI investigation into software-piracy allegations. The wholesaler, Jeffrey Allen Solochek, was sentenced to 366 days in federal prison and ordered to pay restitution of $10,000 to Microsoft Corp. Under the terms of sentencing, Mr. Solochek is required to report to the federal penitentiary in Florence, Colo., by this afternoon, Thurs., July 18, 1996. Given the media interest in this case earlier this year, this advisory is provided as background.)