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Analysis: A turning point in software crime

The past week might well be looked back on as the moment when something changed in the world of pirate software.

The crime of selling or using illegal software has, until now, largelybeen considered a white collar activity, with companies or individualsbreaking the law to make a quick buck or reduce costs.

But the case of Nicholas Wright, who has been jailed for 15 months forconspiracy to commit burglary after a case at Reading Crown Court, isone that changes the game slightly.

Wright was first identified as an individual selling pirate software inthe autumn of 2007. At the time, he was slapped on the wrist byMicrosoft, confessed to doing wrong and promised to clean up his act.
 
But far from turning into a model citizen, Wright then headed down the organised crime route.

Professional theft
Although the case details concentrate mainly on Wright, others wereinvolved and three other men were sentenced. The judge spoke of anorganised operation which had, over the course of May and June lastyear, stolen £190,000 worth of software.

Judge Zoe Smith said Wright and his three accomplices formed "part of agang which committed professional, commercial burglaries".

That this was a gang not to be trifled with was made clear by commentsfrom Detective Inspector Tony Lees from the Thames Valley PoliceSerious and Organised Crime Unit, who managed to catch the gangfollowing an investigation.

"The impact he and the rest of this gang had was immeasurable and aconsiderable change has been seen in serious and acquisitive crimesince they have been behind bars," he said.

Reseller target
A couple of things about the case are particularly disturbing. Firstly,Wright targeted other resellers as a source of potential goods, and asa direct result hurt the channel.

Secondly, the target was software, not the hardware which featured soheavily in the warehouse raids and truck hold-ups at Heathrow towardsthe end of the last century.

On the first point, Michala Wardell, head of anti-piracy at MicrosoftUK, reveals that Wright was prepared to steal from other resellers,which is a development that takes piracy to another level: "It is not avictimless crime...a number of members of our channel have bought fromthis guy."

It will have some repercussions for those tackling piracy, because theidea that they are dealing with one broad type of person has been blownout of the water with the emergence of an organised crime connection.

"This case has shown it is a combination of different things we need todo. Sometimes it is 'feet on the street' but in other vases it has tobe bolder actions. We will do all we can to work with the authorities.We do not want these types of characters in the channel," she adds.

Software demand
On the second point about software being a target for crime, it shouldperhaps not be a surprise that criminals are attracted to them giventhe ease with which large numbers of discs can be moved around and theongoing value of applications.

A decade ago, the headlines were grabbed by those that drove vansthrough warehouse entrance doors or the hooded criminals who held uptrucks stacked with hardware that had come off the planes at Heathrow.

But the value of hardware has dropped, and although prices arecompetitive the value of software has held up. It is still possible tocharge a few hundred pounds for a couple of discs holding an operatingsystem or an application suite.

Security update
The revelation that Wright targeted other resellers is the one thatcauses most concern in the channel. The shadow of organised crime maywell force some resellers and distributors which sell and handle largeamounts of software to go back and revise their security procedures.

Those fighting the software pirates have stepped up their efforts inthe past 12 months to counteract the recession, which has encouragedmore people to cut costs and therefore drive trade in fake software,but the message about the cost of piracy is one that still needs to getout there.

Seen largely as a victimless crime because corporations with large bankbalances are the assumed casualties, the truth is that the use ofillegal software directly hurts the channel.

Hidden dangers
The Wright case also shows that there is a dangerous element to piracy, raising the stakes considerably.

"It is a sad fact that people who deal with illegal goods are usuallyinvolved in other forms of criminality and anti-social behaviour," saysJulian Swan, director of compliance at the British Software Alliance.
 
"Criminals like Mr Wright have made a living from selling sub-standardand potentially dangerous goods to the UK public, using whateverillegal means they can," he adds.

As Wright and his gang spend some months behind bars, the rest of theindustry will need to recalibrate the response to piracy in light ofthe involvement of organised crime.
 
The police will need to become more closely involved and those buyingsoftware at prices that are too good to be true will need to seriouslyquestion where those goods are coming from.

This was first published in February 2010

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