Computer Chips--High-Tech Loot for Bandits
The hooded thieves strike at night, heavily armed with machine guns and other weapons as they threaten security guards and barge into storerooms.
Their loot: computer chips.
A string of five such robberies at Orange County high-tech firms during the last six months have authorities concerned about a new breed of bandit as bold and brazen as jewel thieves, yet interested only in the tiny components that give computers their smarts.
“When you think about the size of the chip and the value, the loss can be pretty significant to a company,” said Bruce Baker, manager of program security at the Stanford Research Institute, a think tank that keeps tabs on computer crimes nationwide. “A person can walk off with a bag of chips that can have more value than diamonds or other gems.”
So far, the attacks have been limited to the Orange County area south of Los Angeles. Authorities in other high-tech areas of the country such as Boston, Dallas, San Diego and San Francisco report no similar thefts, although all have had incidents of employees stealing chips.
Yet some authorities fear that the Orange County heists are a harbinger of a new, high-tech crime wave that is bound to grow.
“This is the crime of the 1990s,” said Los Angeles County Deputy Dist. Atty. Tony Castaneda, who is prosecuting three Pasadena men for reprogramming $1 electronic chips for use in cellular telephones and reselling them for $100 each.
“This is high-technology stuff. It’s the type of crime that’s going to be prevalent in the 1990s, more sophisticated, more technological,” he said.
While gems are locked in safes protected by armed guards, chips have been more vulnerable, often stored behind mesh doors of less-secure businesses.
In the most recent Orange County incident on March 3, four dark-clothed men toting machine guns, an assault rifle and a .45-caliber pistol struck Advanced Logic Research in the dead of night. Sticking one of the weapons to the head of a security guard, the intruders demanded entry to the Irvine computer firm.
“They had stocking masks on, and they pushed him back into the building and made him open a door,” said David Kirkey, the company’s vice president of sales and marketing. “Two cleaning women ran upstairs and locked themselves in a room and screamed. The gunmen ran out.”
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Nothing was stolen in the robbery attack, which coincidentally occurred a few days after Advanced Logic Research was featured in news reports for its development of a new computer.
But on Jan. 3, two armed bandits made off with $105,000 worth of DRAMS, a type of computer chip, at Western Digital Corp. in Irvine after they bound the guard.
Although the Orange County heists are similar, authorities believe two or three groups of look-a-like bandits are responsible, said Lt. Michael White of the Irvine Police Department.
Ken Rosenblatt, a Santa Clara County deputy district attorney specializing in high-tech crimes, said it is no surprise the thieves are getting bolder.
“It’s a sign of the times. People now have better access to assault rifles,” he said. “But it’s a stupid way to steal them (chips). It’s sloppy. I know of much better ways, but I’m not going to tell you.”
The crooks are targeting two kinds of computer chips--the kind used for data processing and those employed for memory capacity.
As the chips become more sophisticated with greater capacity in less space, they become more valuable, computer experts say. They also are easier to steal, being the approximate size of a dime.
“A megabyte chip (which is capable of holding 25,000 characters) costs about $10. A shopping bag full of 1,500 is worth $15,000. That’s a lot of money,” said John King, chairman of the UC Irvine’s computer science department.
“A new chip with tremendous amount of capacity can be worth multithousands of dollars,” added Stanford’s Baker.
What makes the crimes frustrating is that the chips are hard to trace. They all look about the same and do not have serial numbers, only a stamped date of manufacture. That makes it harder for authorities to track the thieves and leaves legitimate businesses open to buying the stolen chips back without their knowledge.
“If you pulled a person over who had a grocery bag of chips, you couldn’t tell where they got them from,” UCI’s King said.
Law enforcement and computer experts have varying theories on who the thieves are. They could be bandits hired by smaller firms to cripple a competitor; they could be the average robber trying out a new market, or they could be electronics experts who will either steal an expensive chip’s design and sell it for a lower price or reconstruct a cheap imitation to make a profit.
That was the alleged motive in the Pasadena case where police said the illegal chip-encoding was responsible for more than $44,000 in outstanding phone bills for 137 different cellular phones.
California’s largest chip theft case to date came in 1985. Larry E. Lowery was sentenced to six years in prison in Santa Clara County Superior Court for stealing $3.2 million in components from Silicon Valley’s Monolithic Memories Inc.
Baker thinks the new crimes will continue because there is a market for high-tech equipment.
“Whenever you have a high-tech market, you have a big market, either legitimate or black market,” he said.
King, however, thinks the thefts are a “flash in the pan” because once businesses hear of the thefts, they will make their chips harder to steal.
“I personally think it’s a bizarre thing to steal. But it’s easier to conceal than an automobile and worth the same. It doesn’t have anything traceable on it. And the first couple of times you do it, no one is expecting it,” King said.
