ICAC uncovers suspected counterfeit CPU bribery scam
2000-11-10
The ICAC has arrested five people in its investigation into an alleged corruption facilitated scam involving the counterfeiting of computer Central Processing Units (CPUs).
The arrestees were a company manageress, a director and an employee of a trading company, a computer company's general manager and a shipping agent.
During the operation which commenced yesterday, ICAC searched five factories and found over 10,000 CPUs awaiting illegal upgrading or already upgraded.
Some machines used for conversion and a large quantity of counterfeit mother boards were also found.
It was estimated that the syndicate could make profits totalling over US$2 million from the sale of these illegally converted CPUs.
The ICAC investigation was triggered with information received from an informant in October this year.
It was alleged that the manageress might have obtained the corrupt assistance of some Customs and Excise officers in protecting her factories and facilitating the delivery of counterfeit processors into and out of Hong Kong.
This part of the allegation is still being investigated. No customs officer has been arrested.
The manageress allegedly offered the "upgrading" service to convert low speed CPUs into high speed ones.
While some of these counterfeit computer products were for sale in the local market, the majority was delivered to overseas countries in Middle East, Europe and North America.
These counterfeit products were packed in sophisticated retail boxes bearing the trademarks of genuine manufacturers.
It was believed that CPUs of low speed function, originally worth about US$100-160 each, could fetch a price of US$300-400 each after conversion.
However investigations revealed that the apparent high-speed function of the converted CPUs would lapse after a short period of time.
The converted CPUs are also likely to cause fire hazard by overheating the computer system, resulting in a complete failure and loss of data.
The shipping agent arrested was alleged to have received advantages from the manageress to assist in the delivery of such products while the remaining three arrestees were said to be involved in various phrases of the illegal upgrading operation, includin g technical and sales support.
The ICAC obtained full technical assistance from the Customs and Excise Department.
All the arrestees, aged between 25 and 40, have been released on bail. The ICAC investigation is on-going.
The arrestees were a company manageress, a director and an employee of a trading company, a computer company's general manager and a shipping agent.
During the operation which commenced yesterday, ICAC searched five factories and found over 10,000 CPUs awaiting illegal upgrading or already upgraded.
Some machines used for conversion and a large quantity of counterfeit mother boards were also found.
It was estimated that the syndicate could make profits totalling over US$2 million from the sale of these illegally converted CPUs.
The ICAC investigation was triggered with information received from an informant in October this year.
It was alleged that the manageress might have obtained the corrupt assistance of some Customs and Excise officers in protecting her factories and facilitating the delivery of counterfeit processors into and out of Hong Kong.
This part of the allegation is still being investigated. No customs officer has been arrested.
The manageress allegedly offered the "upgrading" service to convert low speed CPUs into high speed ones.
While some of these counterfeit computer products were for sale in the local market, the majority was delivered to overseas countries in Middle East, Europe and North America.
These counterfeit products were packed in sophisticated retail boxes bearing the trademarks of genuine manufacturers.
It was believed that CPUs of low speed function, originally worth about US$100-160 each, could fetch a price of US$300-400 each after conversion.
However investigations revealed that the apparent high-speed function of the converted CPUs would lapse after a short period of time.
The converted CPUs are also likely to cause fire hazard by overheating the computer system, resulting in a complete failure and loss of data.
The shipping agent arrested was alleged to have received advantages from the manageress to assist in the delivery of such products while the remaining three arrestees were said to be involved in various phrases of the illegal upgrading operation, includin g technical and sales support.
The ICAC obtained full technical assistance from the Customs and Excise Department.
All the arrestees, aged between 25 and 40, have been released on bail. The ICAC investigation is on-going.