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Five cuffed over $37m heist of Google flash chips

'Largest chip heist in Silicon Valley history'

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California law enforcement officials have arrested five people who allegedly took part in a heist that nabbed $37m in Intel flash memory chips from a memory module manufacturer assembling products for Google.

Silicon Valley's Rapid Enforcement Allied Computer Team – a task force of local, state, and federal agencies focused on high-tech crime – has been investigating the heist after taking over from the Fremont police department and working in conjunction with the Santa Clara County district attorney, Jeff Rosen. Michael Sterner, director of REACT and a lieutenant in the DA's Bureau of Investigations, tells The Register that 1.7 million flash memory chips were stolen on February 27 from a facility owned by Unigen, a maker of DRAM and flash memory products based in Fremont, California.

Roughly 15 people entered the Unigen factory at 8:30 am on February, dressed in black and armed with handguns and automatic rifles. They tied up employees, locked them up in a room, and loaded up the flash memory on a truck. The entire thing was caught on tape, but the burglars hid their faces so this will not be much use in court.

Clearly if they were trying to sell the chips on the gray market, and REACT set up a sting operation to catch the deals and Unigen kept good records on its flash chips, it will not be hard to connect the dots. And with five perpetrators behind bars, given human nature, they will turn in their co-conspirators in the crime to get leniency in their own sentencing.

At the time of the robbery, these 1.7 million flash chips from Intel had an estimated wholesale value of $26m, but as of the arrests made yesterday, the value had risen to $37m. A statement issued by Rosen called this "the largest chip robbery in Bay Area history."

The value of the flash memory that was stolen is important because California has a statute called "excessive taking," which adds prison time when the value of stolen property is large.

The increasing popularity of flash memory and the shortages caused by skittishness in the market in the wake of the earthquake and tsunami have driven the price of flash memory, potentially adding years to the sentencing for the alleged thieves once their trials are over.

The flash memory was being assembled into components that were going to be in turn sold to Google, according to Sterner. He did not know the nature of the devices that Unigen was making or what Google equipment they would plug into.

Sterner said that 98 per cent of the Intel flash chips that had been stolen have been recovered, and that one of the things that REACT is trying to ascertain is why the thieves were sitting on the flash memory. (Very likely because they feared the chips were too hot to fence.)

Sterner confirmed reports that about two per cent of the flash memory that was stolen had been traced to buyers in China, but he did not elaborate on how the REACT task force located the memory and recovered it because it would jeopardize the ongoing investigation.

The five people arrested in the crime so far are: Jesus Meraz Jr., 25, of San Jose; Dylan Catayas Lee, 32, of San Jose; Rolando McKay Secreto, 38, of San Jose; Leonard Abriam, 31, of San Jose; and Pierre Ramos, 28, of Union City. All five are charged with armed robbery and kidnapping for robbery, and they face life sentences if they are convicted.

The REACT task force has not seen a lot of action in recent years, says Sterner, because the value of chips have, in general, fallen over the past decade. But back in the mid-1990s, 50 people were involved in a chip heist known as Operation West Chips, which resulted in about tens of millions of dollars in chips and motherboards being stolen at chip plants in California and Oregon. The audacity of those crimes, and the value of the components, is what drove the creation of REACT back in 1997. ®

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