Federal authorities and New York organized crime detectives are investigating a Chanhassen firm that sells used and refurbished computer parts on suspicion of marketing a wide range of counterfeit components apparently originating in Asia.
Investigators seized what they believe are 150 counterfeit parts last week from Focus Technology, including 23 Hewlett-Packard memory units, 80 IBM memory units and 47 Cisco components.
Jonathan Dennis Worre, president of Focus Technology, said Monday that the seizure involved a fraction of the firm's inventory. He acknowledged, though, that his firm received a "cease and desist" letter in December 2008 from IBM Systems and Technology Group, demanding that it stop selling counterfeit IBM parts.
"I'm not going to say we blew it off, but we kind of shrugged it off," Worre said. "I mean, we don't do that."
Worre said his firm tries to sell only authentic products, but a flood of counterfeits from Asia makes that hard. He said his firm is cooperating "100 percent" with investigators.
Counterfeit computer parts have turned up in military equipment and led to numerous failures, according to a 2008 investigation by Business Week. The article said counterfeit Cisco routers made in China pose a serious espionage threat. In May, the Associated Press reported on Operation Network Raider, which the Justice Department says has led to 30 felony convictions and the seizure of $143 million in counterfeit network equipment made in China.
The investigation of Focus Technology began in April 2008 with a routine search of parcels arriving from China, according to an affidavit filed last week in Minneapolis by David Whereatt, a senior special agent with Immigration and Customs Enforcement (ICE). He said that shipment contained 135 counterfeit IBM memory upgrade units.
A California consumer seeking to buy Hewlett-Packard (HP) memory units from Focus in the fall of 2008 determined that those products were counterfeits as well and notified Focus, which thanked him, Whereatt said. He said the company's HP salesman wrote, "I don't ever want this to happen again."
But a Texas investigative firm bought several counterfeit HP memory kits from Focus in late 2008 and early 2009, Whereatt said. ICE also bought eight counterfeit memory units from Focus in two undercover buys this spring, Whereatt said.
Dan Browning • 612-673-4493
