When semiconductor prices surge, companies across Irvine revel in the prospect of getting more for their chip products. But at the Irvine police department, higher chip prices mean a potential surge in high-tech crime.
Take last September’s earthquake in Taiwan, a big producer of semiconductors. Fears about a resulting chip shortage caused a spike in global prices for memory and other computer chips. And when chips become more expensive, they catch the eyes of thieves who can turn them into cash on the black market.
“It’s all a risk-and-reward proposition for the criminal,” said Sgt. Rick Handfield of the Irvine Police Department’s Investigative Bureau. “If something else is more lucrative, they’ll stop doing the less lucrative.”
Handfield heads a staff of five detectives who investigate fraud and embezzlement against businesses. They rely on companies to tell them what’s becoming hot in the marketplace.
Police contacts with businesses are part of a crime prevention program developed by Irvine, which has seen a number of big high-tech robberies.
Department officials conduct on-site inspection of businesses, examining everything from burglar alarms to the lighting to inventory on loading docks. The police then offer to help develop programs to prevent onsite violence or internal thefts.
Most companies are glad to open their doors to police.
“We actually give them an annual tour,” said Allen Banks, manager of security operations at Irvine-based Toshiba America Information Systems Inc.
Companies give police tours of their manufacturing lines so police can recognize key products like chips, Banks said.
“When the police make arrests and see chips lined up in the back of a car, it becomes a suspicious situation,” he said. “Before they wouldn’t know what the chips looked like. If you’re not trained to know what they’re look like, you don’t know what they are.”
Irvine police say cooperation is in the best interests of local businesses.
“I don’t think any company can feel safe and secure,” Handfield said. “Every company that has a computer on the secretary’s desk has a high value.”
Irvine has had a few highly profiled crimes,such as the case earlier this year of an attempted murder of an executive at medical technology startup Biofem. But overall, crime has gone down, including incidents against business. Commercial burglaries in Irvine were 481 in 1995, rose to 737 in 1997 but have since declined. Last year, there were 444. Business robberies have declined from 56 in 1995 to 19 in 1999. The only increase has been in vandalism against commercial properties, up from 55 in 1995 to 93 in 1999.
But that doesn’t mean the work has gone away. For high-tech cases and others, it takes hundreds of hours more to prepare cases for court than it did 15 years ago, officials said. And they said many business crimes are under-reported.
“Some business owners have the mentality that since it’s Irvine, it’s a nice place and my employees are not going to steal from me,” said Lt. Sam Allevato, who heads the Investigative Bureau. “They’re reluctant at times to report them.”
The nature of high-tech crimes has changed, police said. The trend has moved away from the armed takeovers of high-tech businesses that were highly publicized a few years ago. In one infamous case involving Centon Electronics Inc. in 1997, 11 armed men invaded the Irvine company, stealing $9 million.
“We’re seeing a big decrease in that, which is good,” Handfield said.
Instead, Handfield said, thieves are focusing on easier targets. Police are seeing a big increase in the pilfering of electronics and other tech products in shipment. Some thieves have taken to robbing delivery workers as they shuttle packages.
While companies are willing to work with the police, the extent of their cooperation ends there. They’re reluctant to share information with rivals, even if the industry overall becomes safer.
“People call us and tell us what’s happening around their particularly businesses,” Handfield said. “Unfortunately, it’s not enough. In the high-tech industry, we’ve talked to many of them separately, but together, they’re not willing to talk about their shortcomings. They’re direct competitors.”
High-Tech Sting
Toshiba America Information Systems, a unit of Japan’s Toshiba Corp., knows something about high-tech thefts. An employee in the shipping department was sending laptops to a false address. An accomplice then picked up the pricey computers.
Toshiba’s security got suspicious and brought in Irvine police. They set a trap for the employee.
“He was taken in custody,” said Allen Banks, manager of Toshiba’s security operations, referring to the suspected thief, who the company plans to fire. “It makes my job as security person easier when the company has no-tolerance level for theft.”
Toshiba’s plant in Irvine churns out about 75,000 laptops a month. It’s a tempting target for thieves. That’s why Toshiba has a security program with surveillance throughout the facility. There are also informants and an anonymous hotline. And Toshiba works closely with the Irvine police.
Banks said he’s seen an evolution in tech crime. Disk drives and chips used to be hot. Now it’s entire computers.
“The flavor of the month changes,” he said. “It depends on what the black market is looking for. One day is could be chips. Another day is hard drives. Another day it could be screens.”
Police Log
From sophisticated order scams to plain-old burglaries, here’s what Irvine police detectives say they are observing these days:
*Crooks call up companies to establish a line of credit and have products shipped to them before the business catches on.
“I’ve seen cases pretty routinely of $30,000 to $80,000,” Sgt. Rick Handfield said.
*Internal theft by employees is a continuing problem. It can be bookkeepers writing themselves checks or simple stealing. In one recent case, $30,000 was recovered from an employee, who was selling surplus equipment out of the business’s own back door.
*Inventory controls at many companies are too lax, police said. Detectives are seeing a lot of unaccounted inventory sitting on loading docks, waiting either to be stocked or shipped. These are prime targets for thieves, and they’re difficult for police to track.
“We’re often on a cold trail. This isn’t a broken window with a car leaving. The crime is often over a period of weeks,” said Handfield.
Companies often don’t catch on to the thefts until the amount tops $10,000.
“About 18 months ago, we recovered $300,000 worth of stolen property but the company didn’t even know it was stolen,” he said.
*Downsizing companies are particularly ripe for burglaries. Police have seen the person in charge of selling items like unneeded furniture pocket the proceeds.
*Workplace violence is a major topic, particularly against women by former boyfriends or husbands. Police said many businesses don’t know how to approach it and are ignoring it. The police said businesses should develop an assessment team to identify employees who could have potential problems.
Some gang violence has flared in the workplace. With businesses hiring more temporary workers, some companies run the risk of placing members of rival gangs next to each other. One such case resulted in violence. “Words were said back and forth. One pulled out a razor and a stabbing took place,” said Lt. Sam Allevato.
*A surprising number of smaller companies are dealing in cash, which the owners use to buy loads of products from vendors right from their receiving doors. The owners make routine inquiries to see if these products are stolen, which detectives said is often hard to determine.
