Fremont couple gets 5 years in fraud case

Oakland Tribune, Oct 26, 2007

FREMONT -- A Fremont couple were sentenced Wednesday to five years in jail and ordered to pay more than $25 million for their role in a scheme to defraud Microsoft.

Mirza Ali, 60, and his wife, Sameena Ali, 53, were convicted in federal court last year of 30 counts of conspiracy, mail fraud and money laundering for obtaining discounted software under false pretenses.

The scheme involved purchasing more than $29 million of Microsoft software at deeply discounted prices reserved for academic institutions and then selling the software to nonacademic entities, according to federal prosecutors.

The couple, which netted more than $5 million from the scheme, illegally used the proceeds to buy property in the name of their college-age son and wire $300,000 to Pakistan, federal prosecutors said.

In addition to the jail sentence, U.S. District Court Judge Claudia Wilken ordered the couple to forfeit more than $5.1 million and pay Microsoft $20 million.

The couple's business partner, Keith Griffen, 56, of Oregon City, Ore., was sentenced to 33 months in prison and also ordered to pay Microsoft $20 million. A fourth participant in the scheme, William Glushenko, 66, of Alameda, was sentenced to one year of probation and 100 hours of community service.

During the trial, prosecutors presented evidence that the Alis and Griffen formed several corporations and purchased other corporations authorized to buy Microsoft software at steeply discounted prices for resale to academic institutions.

In 1996, when Microsoft removed the Alis from the discount program, the couple formed new corporations to disguise their identity from Microsoft and re-enter the program, federal prosecutors said.

When Microsoft stopped accepting program applications from new companies, prosecutors said, the Alis and Griffen bought small nonoperational companies throughout the country that already held licenses to participate in the Microsoft discount program.

The convictions resulted from "Operation Cyberstorm," a two-year FBI investigation into software piracy and related crimes.