Police Seize $10 Million in Fake IBM Boxes, Chips

Police this week confiscated an estimated $10 million in fake IBM computer cardboard boxes from a Lake Forest business in the biggest single seizure in the history of the computer manufacturer, authorities said Friday.

On Wednesday, police used search warrants to enter businesses in Irvine, Lake Forest and Corona and seized more than 28,000 boxes and about 1,000 computer memory chips, Sgt. Dwight Henninger said. The majority of the chips and the blue-and-white, palm-sized boxes were taken from Dynamite Data Systems of Lake Forest, police said.

Investigators said they believe the Lake Forest company sold the boxes containing low-quality chips to other computer dealers as if they were the genuine product.

“What’s interesting about this is the chips are not a big part” of the case, Henninger said. “Actually having a box that looks to be genuine is a valuable commodity” because it can fool consumers, he said.

Police said they have not made any arrests in connection with their investigation, which began in June, 1991.

The value of the boxes and chips was determined by calculating how much the real boxes and chips cost to produce and sell.

Investigators are trying to determine the origins of the computer memory chips, which do not bear serial numbers. Henninger said investigators believe Dynamite Data may have been selling the counterfeit boxes since 1988. They believe the company has sold the boxes with low-quality chips all over the United States and Europe. Dynamite Data officials could not be reached for comment on Friday.

Two other businesses--Thoro Packing of Corona and Conceptual Design Industries of Irvine--were also searched, police said. Henninger said police were unsure as to the two businesses’ degree of involvement in the production of the counterfeit boxes. Company officials had no comment Friday.