A rogue computer reseller who sold pirated software to unwitting consumers in Port Elizabeth and Johannesburg has been handed a suspended prison sentence and ordered to pay compensation to his victims.
Computer shop manager Vikesh Singh, who traded as PE Technologies in Port Elizabeth and later as Vision Technologies in Johannesburg, was found guilty in the Specialised Commercial Crime Court in Port Elizabeth on June 15 of fraud and multiple contraventions of the Counterfeit Goods and Copyright Acts for selling counterfeit and unlicensed copies of Microsoft software.
Singh also pleaded guilty for contravening the Companies and the Close Corporations Acts by acting as a manager while disqualified, as he had previously been convicted of theft.
He was sentenced to six years’ imprisonment, suspended for five years, provided he doesn’t contravene the Counterfeit Goods Act or the Copyright Act. He was also sentenced to a fine of R80 000, or four years’ imprisonment conditionally suspended for five years, for contravening the Companies Act and the Close Corporations Act. Singh was also ordered to compensate four customers, who had been sold counterfeit Microsoft software and acted as witnesses in the criminal case, three times the value of their purchases, and ordered by the court to pay compensation to Microsoft of R150 000.
Dale Waterman, Microsoft’s Corporate Attorney for Anti-Piracy for the Middle East and Africa, said every year, thousands of South African consumers and businesses are affected by counterfeit software which they have acquired unwittingly.
“Consumers are coming to us daily with complaints about counterfeit software. And they want industry and government to stand up and take action. Our commitment is to do everything we can to help our customers and protect our legitimate partners,” said Waterman.
“Software counterfeiting negatively impacts the entire IT ecosystem. Legitimate partners and resellers must compete with software pirates and unscrupulous businesses selling counterfeit software, making it very difficult for them to compete on a level playing field. They also lose sales and the opportunity to service those customers. This is why we pursued this investigation to a conclusion, even though it took 4 years.”
The effects of pirated software can have a devastating impact on the livelihoods of consumers, says Waterman. Counterfeit software can contain dangerous viruses, spyware and other malware that can actually harm consumers through identity theft, loss of data, system failures and opening the door to online spam, virus and fraud networks.
One of Singh’s victims said he had lost personal data after a system malfunction caused by the counterfeit software.
“I bought Microsoft Office 2007 from PE Technologies in Port Elizabeth in 2008. It was a packaged like a genuine product with what I thought was a genuine hologram CD and a certificate of authenticity, but I started getting messages to say that the product was not genuine. I then approached Microsoft for assistance after Vikesh Singh refused to replace the product with genuine software,” said the customer, who asked to remain anonymous.
The case followed an SAPS Commercial Crime Unit raid on PE Technologies in Newton Park in August 2008 after a two-year investigation by Microsoft, including undercover test purchases. Microsoft had received several complaints from local consumers and legitimate computer shops in the region. During the raid the SAPS seized a large quantity of fake Microsoft software, packaged to look like genuine products, and being sold to unsuspecting customers as the genuine article.
A further SAPS raid in April 2009 followed after another undercover Microsoft test purchase confirmed that PE Technologies in Port Elizabeth were still engaged in what is referred to as “Hard Disc Loading”, a term used when a PC shop or reseller installs a copy of Microsoft software onto a computer, but fails to distribute the authorized package of genuine Microsoft software components.
Investigations also confirmed that PE Technologies in Port Elizabeth had been using a stolen Volume Licence Key belonging to another legitimate customer to install pirated copies of the Microsoft Office suite, and that Vision Technologies in Johannesburg had then subsequently been engaged in the practice of Hard Disc Loading.
Marius Haman, Head of Anti-Counterfeiting at Bowman Gilfillan Attorneys, said increasing partnerships between the public and private sector is crucial to the success of combating software piracy and counterfeiting in general in South Africa.
“The government, through law enforcement channels like the SAPS Commercial Crime Unit and the Specialised Commercial Crime Court, can lead by example and be one of the most effective mechanisms for sending a strong and clear message that the government will not tolerate counterfeiting and piracy in South Africa,” he said.