Microsoft Applauds Indictment of Leaders in Alleged Criminal Counterfeiting Ring

Eight Arraigned on Charges of Money Laundering, Trafficking in Counterfeit Software

REDMOND, Wash. - June 4, 1999 - Microsoft Corp. officials today applauded the actions of local and federal law enforcement officials in California in the investigation leading to the indictment of eight leaders in an alleged multinational criminal counterfeiting ring. Four of the defendants were ordered to be detained until bond hearings next week. The arrests follow on the heels of a raid in February where $56 million worth of counterfeit Microsoft® software and product components were found, the largest single seizure of counterfeit Microsoft software to date.

"Software counterfeiting increasingly is dominated by sophisticated criminals who often use the proceeds to fund other illegal activities," said Brad Smith, general counsel, Worldwide Sales and Support at Microsoft. "We are grateful to all of the law enforcement agencies involved in this case. Their hard work resulted in the seizure of millions of dollars worth of alleged counterfeit product, preventing thousands of unsuspecting customers and honest software distributors from being victimized by counterfeit software products."

The alleged counterfeiters were indicted after a special investigations unit comprising the FBI, the Westminster Police Department, and Orange County District Attorney's Office, with assistance from Microsoft, investigated and arrested low-level members of this organization on Feb. 3, 1999. These arrests lead to the eventual arrests and today's indictments of the group's leaders and financial backers. Among the charges brought against members of this alleged counterfeiting ring are trafficking in counterfeit computer software, documentation, and packaging and various money laundering offenses.

"The multiagency task force that we currently have in place enables us to successfully prosecute high-tech crimes because we can quickly access numerous resources from all the agencies involved," said James Cook, chief of the Westminster Police Department.

Counterfeiting cases typically involve both copyright and trademark infringements. Under federal trademark law, criminal penalties include fines of up to $2 million and 10 years in jail per infringement; federal copyright laws include fines of up to $250,000 and five years in jail per violation. The money laundering offenses charged here carry penalties of up to 20 years' imprisonment and fines of up to $500,000 or twice the value of the money from illegal activities that is laundered, whichever is greater.

Customers or resellers with questions about the legitimacy of Microsoft products should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448), or send e-mail to piracy@microsoft.com. Consumers can obtain more information about software piracy by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or sending e-mail to software@bsa.org.

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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