LORETTA E. LYNCH, United States Attorney for the Eastern District of
New York, and MUKESH CHANDRANI, Special-Agent-in-Charge of the United States
Secret Service, New York Field Office, today announced the unsealing of
an indictment charging Platinum Technics International (USA) Inc. ("Platinum"),
Jinxin Wu, also known as "David Wu," and Tai H. Pham, also known as "Danny
Pham," with trafficking in counterfeit computer central processing units
("CPUs" or "chips") and counterfeit computer software.
The indictment charges that in addition to selling some legitimate products,
Platinum sold counterfeit computer software and counterfeit CPUs.
Platinum sold these counterfeit products primarily to retailers for resale
to the general public. According to the indictment, the defendant
Jinxin Wu was an owner of Platinum, and the defendant Tai H. Pham was the
sales manager and also a salesperson employed by Platinum. The defendants
each supervised the sale of counterfeit computer software and counterfeit
CPUs.
As alleged in previously filed pleadings, a legitimate computer CPU
manufacturer, such as Intel Corporation, will qualify its CPUs to operate
at specified speeds, and mark that speed on the CPU itself, along with
the manufacturer's trademark and other identifying information. To
ensure the quality and life-expectancy of the CPU, a legitmate manufacturer
will specify each CPU to operate at less than top speed, and incorporate
a speed-lock mechanism into each CPU to prevent operation at a speed greater
than specified. Counterfeiters, however, typically acquire genuine
computer CPUs, re-mark them so that they will appear to be of superior
quality and speed than they actually are, and disable the speed-lock mechanism.
The counterfeit CPUs are then sold by wholesalers to retailers at steep
discounts, who, in turn, sell the CPUs to the public as genuine CPUs of
superior quality and speed, charging a price commensurate with the genuine
article. As a result, the purchasers are victimized because the re-marked
CPUs are substantially more likely to burn out from ordinary use, and do
sooner, due to the strain of operating at a higher speed than the true
specification, and the legitimate manufacturers are victimized by lost
sales of their superior quality CPUs.
The defendants Platinum, Wu and Pham are charged in three counts of
counterfeiting violations. The first count charges a conspiracy to
traffic in counterfeit computer chips manufactured by the Intel Corporation,
and counterfeit copies of "Windows 95" and "Office 97" computer software,
between May 1996 and September 1998. The second and third counts
charge the defendants with trafficking in the counterfeit chips and the
computer software, respectively. In a related civil proceeding, the
government is seeking forfeiture of proceeds from the illegal trafficking.
This indictment is part of the "Intellectual Property Rights Initiative"
announced by Deputy Attorney General Eric H. Holder, Jr. in San Jose, California,
on July 23, 1999. The initiative is led by the Justice Department,
the FBI and the Customs Service, and is intended to focus increased
investigative and prosecutive resources on copyright and trademark violations.
In announcing the indictment and arrests, James K. Robinson, Assistant
Attorney General for the Criminal Division, said, "This case should serve
as a notice that the Justice Department has made prosecution of counterfeiting
of computer hardware and software one of its priorities. Those who
engage in this activity, whether or not for profit, should take heed that
we will bring federal resources to bear to prosecute these cases.
This is theft, pure and simple."
United States Attorney LORETTA E. LYNCH said "Our office is committed
to protecting the public from those who profit by passing off fake computer
components and software as the genuine articles. The Platinum case
is an example of that commitment."
Special-Agent-in-Charge CHANDRANI praised the "cooperation and support
of the New York Electronic Crimes Task Force members, with special thanks
to the United States Customs Service for its efforts in the investigation."
If convicted, Wu and Pham face a maximum of 5 years imprisonment on
the conspiracy charge, and a maximum of 10 years imprisonment on each of
the two substantive counts of trafficking in counterfeit goods. Platinum,
the corporate defendant, faces maximum fines of up to $5,000,000 on each
of the substantive counts.1
The case has been assigned to United States District Judge David G.
Trager. The defendants will be arraigned this afternoon by Magistrate
Judge Robert M. Levy at the United States Courthouse in Brooklyn, New York,
in the ceremonial courtroom on the 2nd floor.
The investigation by the United States Secret Service New York Electronic
Crimes Task Force is continuing.
The government's case will be prosecuted by Assistant United States
Attorney Andrew M. Genser and David Goldstone, a trial attorney with the
United States Department of Justice, Computer Crime & Intellectual
Property Section. The civil forfeiture proceeding will be handled
by Assistant United States Attorney Sarah Lum.
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NAME: Tai H. Pham
DOB: 1/1/70
RESIDENCE: 1566 201 Street, 2nd Floor, Bayside, New York
