22 April – LAWFUEL – The Law News Network – On April 20, 2005, the t…

22 April – LAWFUEL – The Law News Network – On April 20, 2005, the three-year undercover investigation known as Operation Matrix concluded with the sentencing of the final two defendants: William Liao, 45, of San Jose, California, and Jackson Yu, 45, of Fremont, California. Liao and Yu pleaded guilty on February 3, 2004, to one count of conspiracy to receive, possess, and conceal stolen property, and one count of conspiracy to structure monetary transactions to evade a currency reporting requirement. Liao and Yu were sentenced to 12 and 18 months respectively as well as forfeiting a combined $240,000 cash and paying an additional $15,000 in fines.

Operation Matrix was an undercover investigation that targeted individuals and businesses in the San Francisco Bay Area that were engaged in buying, receiving, and brokering stolen and counterfeit computer software and hardware.

U.S. Attorney Kevin V. Ryan stated, “Operation Matrix uncovered and disrupted the illegal and unscrupulous practices of seemingly legitimate high technology businesses. The operation has sent the message that the buying and selling of stolen and counterfeit technology on the black market will result in prosecution and prison terms. I commend the law enforcement agencies, the FBI, the REACT High Technology Crimes Task Force, the Santa Clara County Sheriff’s Office and the Santa Clara County District Attorney’s Office, in the successful completion of this operation.”

Between 1999 and 2002, Liao and Yu, as well as their businesses, Atra Technology and AG Data Tech, conspired to buy and sell computer hardware and software that they believed was stolen and conspired to deposit the proceeds of that conspiracy in banks in a manner that intentionally evaded reporting requirements. United States District Court Judge Jeremy Fogel found that the defendants had structured over $2,000,000 in illegal proceeds of their crimes in order to avoid these cash reporting requirements.

Liao and Yu were the final two of nine individuals and two businesses that were indicted in a joint investigation conducted by the FBI, REACT High Technology Crimes Task Force, Santa Clara County Sheriff’s Office, and the Santa Clara County District Attorney’s Office. The investigation, which began in the fall of 1999, originally targeted individuals and businesses in the San Francisco Bay Area that were engaged in buying, receiving, and brokering stolen and counterfeit computer software and hardware.

Other defendants charged through Operation Matrix were also recently sentenced. Joseph Lacayo, 61, of Monte Sereno, California, was sentenced on April 11, 2005, by United States District Court Judge James Ware to 36 months incarceration and a $5,000 fine, after pleading guilty to conspiracy to receive, possess, and conceal stolen property on September 8, 2003. Joe Wagshul, 54, of Belmont, California was sentenced on April 18, 2005, by Judge Ware to 18 months incarceration for pleading guilty to the same crime on July 29, 2003. Lacayo and Wagshul were sentenced for their parts in a similar conspiracy that bought and sold computer hardware and software that they believed had been stolen. Judge Ware found that the conspiracy involved over $1,000,000 in high tech components and software.

The overall investigation was prosecuted in federal and state courts by Assistant United States Attorney Matt Parrella of the United States Attorney’s Office for the Northern District of California, and Deputy Attorney General Merle “Bud” Frank of the California Department of Justice. The prosecution has resulted in four complaints, eleven indictments, nine arrests, and nine convictions. During the course of the investigation approximately $480,000,000 in stolen software and hardware was recovered. Additionally, the investigation resulted in approximately $900,000 in seizures and forfeitures. The investigation was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the U.S. Attorney’s Office.

Special Agents with the Federal Bureau of Investigation, and REACT Task Force agents with the Santa Clara County District Attorney’s Office managed Operation Matrix. The investigators personally supervised hundreds of meetings between undercover agents and case subjects, wrote thousands of pages of reports, and reviewed ten of thousands of pages of business records, financial documents, and numerous pieces of evidence to make this investigation a success.

A copy of this press release and related court filings may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can . Related court documents and information may be found on the U.S. District Court website at www.cand.uscourts.gov or on .

All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at [email protected] or Christopher Sonderby, Chief of the CHIP Unit, at 408-535-5037.

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