Thwarting state-of-the-art criminals

Feb 1, 1997 12:00 PM, By FRANK JOHNS

In May 1995, a team of robbers stormed an Irvine, Calif., electronics manufacturer and held terrified company employees at gunpoint, threatening to invade their houses and kill their children before making off with nearly $10 million worth of computer chips. Unfortunately, the Irvine robbery was not an isolated incident.

In the past four years, crimes against U.S. high-tech firms and their employees increased five-fold, according to estimates by Warren, N.J.-based Technology Theft Prevention Foundation. The escalating violence that has accompanied this crime wave poses even greater concerns. Armed robberies of high-tech firms had been virtually unheard of before 1990. In 1995, thieves struck 56 times in California's Silicon Valley. Employees have suffered beatings, knifings and shootings at the hands of increasingly efficient and brutal robbers. The infamous Willie Sutton, asked why he robbed banks, reportedly said, Because that's where the money is.

Today, more and more thieves are discovering that big money rests in computer components and peripherals. Five years ago, the average loss sustained by high-tech companies was under $5,000 per incident, the foundation reported. Last year, the average theft approached $750,000. Thieves struck one U.S. technology firm 16 times between 1993 and 1995, carting off more than $6.1 million in equipment.

Property losses to Silicon Valley companies now run about $1 million a week. Indeed, the Chubb Insurance Group, which insures about one-third of the nation's high-tech companies and is a foundation sponsor, paid less than $3 million in claims for Silicon Valley area clients in 1993.

By contrast, its claim losses for 1995 topped $20 million. In spite of everything, some high-tech companies still treat their products as commodities rather than the valuable booty these items represent to crooks. A postage-stamp-size Pentium computer memory chip, for example, is worth approximately $700 - more than its weight in gold or cocaine. A small fortune in chips can easily be concealed in a briefcase, and they are virtually untraceable. Moreover, chips are in such high demand they maintain a street value of nearly 50 percent of retail price.

Small companies and firms outside the technology field are not immune to high-tech crime. Any firm with more than about 50 high-end computers is a natural target. In fact, thieves have been known to break into college dormitory rooms to remove chips from students' computers. But companies can do a lot to discourage technology-related crime. One security concept that has proven effective employs a three-part model stressing awareness, alertness and the use of physical barriers.

* Awareness. Building awareness of the need for good security among employees and how to implement appropriate measures is the first line of defense against high-tech crime.

* Alertness. Assessing and countering the vulnerability of a facility is another key. Alertness encompasses identifying items or information crucial to the business and determining the internal threat of poor hiring practices and poor security controls over essential information.

Barriers. The final step involves installation and integration of hard security systems and personnel, including physical barriers, closed circuit television, locks, computer security systems and guards.

Preventing theft The dramatic increase in high-tech crime has focused attention on the problem. The insurance and electronics industries last year established the Technology Theft Prevention Foundation to help prevent high-tech crime. And, in recent years, law enforcement officials have directed considerable effort and resources to combating high-tech crime.

The Federal Bureau of Investigation (FBI) has set up a special high-tech crime squad that has made dozens of arrests involving millions of dollars in state-of-the-art electronic contraband. Recently, FBI agents, working in conjunction with the San Jose Police Department, arrested the group allegedly responsible for the Irvine robbery. Yet, high-tech thieves are resourceful. Many have taken to hijacking goods in transit rather than taking the risk of robbing a security-hardened building. Clever cyberspace-age crooks are using the Internet to electronically hawk stolen merchandise.

Technology-related and technology-facilitated crime represent one of the greatest criminal challenges facing industry in the 21st century. Law enforcement, the electronics industry and private security companies must continue to work together closely to meet the challenge.

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© 2012 Penton Media Inc.

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