Chip theft feeds the spot market

Niall McKay
Sunday 15 September 1996 23:02

While most microprocessors are taken at gunpoint, most computer memory or Single Inline Memory Modules (SIMMs) are stolen from break-ins. These components also make their way back to the spot market. However, according to police on both sides of the Atlantic, they are first fenced through the computer trade press or in specialist classified advertising publications.

"Not only do they sell the goods in the trade press," says a Scotland Yard spokesperson, "but they also read the trade press to mark out new targets."

Memory prices are falling fast. Prices have dropped by about 60 per cent in the past 12 months. Last year, a 4Mb SIMM sold on the spot market for around $130. This year, the same module will sell for around $45.

"Criminals here say that there are only another five or six months left in this market because of falling prices," says an officer with Scotland Yard's Serious Fraud Squad. "Then they say they will go back to stealing antiques."

Analysts speculate that falling prices are also responsible for keeping the black market afloat.

British police believe that many of the stolen SIMMs are destined for both small-time computer dealers and the spot market. "Some of these memory modules are destined for the back-street computer dealers. But others will end up back in the channel," says a spokesman for Scotland Yard's serious crime squad. "They make their way there by any number of routes."

"These adverts practically scream 'we buy stolen goods,' " says one memory dealer. "It's difficult to run a legitimate business when you have these guys undercutting you with stolen components."

In London, memory has a street value of around pounds 5 a megabyte, so a 4Mb SIMM module will fetch around pounds 20. The SIMMs will be bought by dealers who advertise seeking to buy SIMM modules for cash. Typical adverts read: "Memory SIMMs wanted for Cash", and "Wanted: Memory, SIMMs, Pentium CPUs and Unregistered Software for Cash."

I contacted three dealers who placed ads seeking to buy SIMMs. All three said they would pay pounds 10 a module, well under the street price. All three also said that they did not care where the SIMMs came from.

Stolen SIMMs will be stripped of identifying marks and sold on a back street to computer retailers or other components dealers. They will often make their way back to the spot market and be sold back into the mainstream market.

"It used to be easy to tell if SIMMs had been used before because often they would have slight indents on [the] connectors," said Mark Leathem, director of Kingston, a memory manufacturer based in Wiltshire. "Now they can hide the indentations by painting the connectors with clear nail polish."

There are many other outlets for SIMM modules and computer components, including street markets such as Porte de Clignancourt in Paris, Brick Lane in London's East End and the Barrowlands Ballroom in Glasgow. Dealers were approached in Brick Lane and Clignancourt in an attempt to purchase a processor. In London, an Intel Pentium 66Mhz processor was on sale for around pounds 75, while in Paris an AMD486 processor was on sale for Fr100. The traders declined to comment on where the goods had come from.

"The problem is that even if we're sure that these people are selling stolen components, we can't convict them," says a Scotland Yard spokesperson. "All of these components are untraceable. And there has to be a victim for there to be a crime under British law."

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