Dozens more arrests are expected in the stolen software distribution schemes.

CONCORD, N.H. (AP) – Six people have pleaded guilty to stealing and distributing computer software around the world after undercover agents got into the operation and sorted through millions of computer transactions to build cases against them.

Dozens more arrests are expected in the schemes in which suspects copied and shared the software through stolen Internet links at banks, communications companies and data centers.

“We have records with respect to thousands of people,” said Assistant U.S. Attorney Arnold Huftalen. “Everyone we are looking at is involved in high-priced software applications. It’s not a $5 song. We’ve got pieces of software on servers with retail value in excess of $115,000 per copy,” everything from games to IBM and Microsoft programs, he said.

Huftalen said the case developed with the help of a New Hampshire resident involved in one of the schemes.

He said the software industry estimates it loses $12 billion a year to pirates, who generally are not in it for money.

“It’s a combination of ego and a sense of culture that they’ve grown up with,” he said.

It took authorities three years to compile the case – entering secret networks, seizing computers, tracking connection records and matching coded transactions with suspects.

“We used informants, cooperative witnesses and undercover agents who assumed false identities through the Internet to infiltrate a number of software piracy groups around the country,” Huftalen said.

Agents seized computers two years ago, he said, and had three computers of their own working 24 hours a day, seven days a week for a year recording transactions.

Without the knowledge of the businesses, the servers used to distribute the software were based at the Bank of America in Boston; Verio Data Center in Sterling, Va.; Qwest Communications lab in Balston, Va.; a cable television company in Maryland; a computer communications company in Brandon, Fla.; an apartment at Tulane University in New Orleans; and the Nebraska Department of Highways.

Others were based at a North Easton, Mass., house and an Ames, Iowa, apartment.

Business or university computers generally are used, he said, because they have larger bandwidth, or Internet connectivity, and heavy Internet traffic is unlikely to be noticed or detected.

Seven people from at least four states have been charged. Six have pleaded guilty to violating federal copyright laws. Most were computer system operators at their companies, Huftalen said.

Three entered pleas this week: Jordan Zielin, 30, of Brooklyn, N.Y., a computer support employee at the Bank of America; John Neas, 49, of Holbrook, Mass.; and Kenneth Woods, 31, of Warrenton, Va., who worked at Verio Data.

Three others pleaded guilty previously, one is expected to plead next week, and dozens more may be arrested, he said. “We’re far from finished.”

Huftalen said operators steal an organization’s computer services and often convert their employer’s computer equipment to run the operation.

He said a New Hampshire resident who managed a piracy group began cooperating with the FBI in 2000. The witness had access to several sites and introduced undercover agents to them. The agents made other contacts and spread their links to more sites.

Huftalen said getting into a network was the easy part. The tedious examination of seized computers and their data lengthened the investigation.

Huftalen said the individual sites contained information ranging from enough to fill about 275,000 floppy discs to more than 700,000 floppy discs. Packed neatly, he reported, 700,000 discs would fill about three dump trucks.

Here’s how a system generally worked:

A pirate removed anti-copy protection from software and posted it on a private site.

“Once posted … and the cracking group or individual responsible takes its, or his bow, so to speak, for having been the first to crack it, the software is thereafter made available for distribution to other” sites, Huftalen said in his presentation.

“And so it goes, on and on, until the cracked software has been posted to hundreds, if not thousands” of sites, he said.

The networks are protected by security codes and connections that hide their addresses and only allow access from users with a password who use pre-registered computers.

AP-ES-01-24-04 1255EST