Tuesday, November 21, 1995 - Page updated at 12:00 AM

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High-Tech Theft On The Rise -- Violence Growing With Demand For Computer Chips


The young woman who knocked on the company's door that night seemed harmless. Attractive. Disarming. Plant employees opened the door to find out what she wanted.

She wanted them to lie on the floor while her six ski-masked accomplices, carrying guns and handcuffs, ransacked the building.

They had come to ferret out one of the hottest commodities for criminals today: computer chips.

With demand for computer memory and ultrafast processor chips at an all-time high, the electronic devices - slightly larger than a stick of gum - have become as valuable as cocaine, FBI and insurance industry officials say.

Trouble is, many high-technology companies and their customers treat computer gear, software and even the corporate secrets their computers hold as no more valuable than scratch paper on a desk.

"We're not dealing with a can of peas," said Bill Barr, a high-tech loss expert with the Chubb Group of Insurance Cos. "We have to develop the mentality that these are precious items and we should treat them like cash or gold."

High-tech crime is growing exponentially, and so is the violence linked with it, said Barr and others at a recent seminar put on by the Technology Theft Prevention Foundation along with Chubb, the American Electronics Association and the Washington Software Association.

In the first five months of this year, California's Silicon Valley had 46 armed robberies of computer-chip manufacturers, distributors or handlers - a crime unheard of just five years ago, said Rich Bernes, supervisory special agent of the FBI's High-Technology Crime Squad in San Jose, Calif.

"We have people coming into companies and shooting employees," he said.

Portland has had a couple of armed robberies, and the University of Washington was hit last year by a sneak thief who cracked open computers. Microsoft, Asymetrix and other Seattle-area software companies are longstanding targets of techno-scams. And the Intel chip plant being built at DuPont south of Tacoma could create new temptations.

Microsoft attorney Brian McEachron said the industry estimates 1994 losses from illegal software worldwide at more than $15 billion.

Even more expensive are thefts of "intellectual property" - trade secrets, proprietary documents and computer files, Bernes said.

The rise of the Internet has opened a vast new criminal arena. "The Internet is like the wild, wild West," Bernes said. "We like to call computer chips the crime of the '90s, but it looks like cyberspace is going to be the crime of the next century."

A worldwide shortage of memory chips worsened this year with the huge success of Windows 95, Microsoft's new computer operating system. In the past, computers could get by nicely with four megabytes of random-access memory. Windows 95 works best with a minimum of 16 megabytes.

The chips are extremely valuable, easily transportable, virtually untraceable and instantly salable.

A 16-megabyte memory chip is worth $600 to $700. A half-million dollars' worth fits in a shoebox. They don't have serial numbers.

Thieves also like computer hard-drives and other data-storage devices, again because they're small and easily sold, Bernes said.

Intel has adopted extensive anti-theft measures, spokesman Howard High said - most of which he declined to discuss.

Until recently, Intel resisted putting serial numbers on microprocessors. Intel's perspective changed when chip burglaries escalated to armed robberies, and it now numbers Pentiums and other high-end chips.

Fifty-seven percent of losses come from employee theft, Bernes said - 70 percent if vendors and contractors are added in.

Losses can be cut significantly with such simple safety measures as tamper-proof screws on computer cases, security fences and locked doors, Chubb's Barr said - and through carefully screening new hires and keeping tabs on inventory.

Copyright (c) 1995 Seattle Times Company, All Rights Reserved.


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