Businessman pleads guilty to stealing US$100m worth of software

8 Jan 2013

A businessman in China has pleaded guilty to selling stolen software from US tech giants to 325 black market buyers in 61 countries worldwide.

Software companies around the world lose billions of dollars of through piracy and invest heavily in bringing the culprits to book.

The businessman at the centre of the latest case, Xiang Li from China’s Chengdu province, was lured to the Pacific island of Saipan, a US territory, where he was arrested by US Department of Homeland Security agents.

Victims in the case include Microsoft, Oracle, SAP, Siemens, Delcom, Altera, Agilent Technologies, and Rockwell Automation.

The software in question was used in the defence, space and engineering sectors and had a retail value of US$100m.

Each piece of software sold on and other sites run by Li were worth up to US$1m apiece but were sold by Li for as little as US$20 up to US$1,200.

It is understood that Li’s chain of websites offered more than 2,000 software titles belonging to the US technology companies.

It is understood that Li searched for hacked software on internet forums before advertising them for sale on his websites.

Software piracy: a US$53bn a year business

The pirating of software is a big business and Li’s activities, although costly to the software industry, were at the lower end of the scale on sophistication.

Sophisticated manufacturing operations exist across the world and particularly in parts of southern China, where pirates produce near identical copies of counterfeit software, drugs, electronics and even cars.

Software piracy alone is a US$53bn a year business and Microsoft spends an average of US$200m a year to combat the problem.

The software giant runs a Forensic Crime Lab in Dublin where it is assembles evidence from 39 police forces from around the world.

“The crime gangs have become so sophisticated that we see a lot of situations where people are placing orders with what they think are legitimate companies only to find that the product is shipping directly from China and is counterfeit,” Anthony Delaney, director of business intelligence and business operations at Microsoft’s Worldwide Anti-Piracy Unit in Dublin told during a visit to the Labs in 2011.

Jailed businessman image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years