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Star Tribune's article on 
the bust of Cloud 9 Elite.
Re-typed by 
Drowning Child on 11-13-94
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Minneapolis Star Tribune
11-12-1994

'U' student accepts fines in software piracy suit
By Mike Meyers
National Economics Correspondent

University of Minnesota student Aaron Y.
Chung used to be on Cloud 9.  Now he's
taken a fall and, in a way, so have his
countless coustomers.

Cloud 9 was a computer bulletin board
run by Chung, who is accused by Micro-
soft and Novell, both software publishers,
of being a major software pirate.  The
bulletin board has been shut down by a
civil action in federal court after serving as
a source of more than 7,000 bootleg
programs.

Customers across the nation, with such
colorful code names as Mac the Hac, To-
bocop and Cybernetic Samurai, no longer
will be able to dial Chung's Minneapolis
apartment to trade illicit software.

And Chung himself is under a cloud.

In a civil settlement reached this week, he
agreed to pay more than $29,000 in fines,
forfeit an estimated $25,000 in computer
gear and give up a cache of counterfeit
software valued at more than $1 million
and perhaps as much as $5 million.   He
also agreed to stay out of the bulletin
board business for 10 years.

"My client was faced between the choice
of paying enormous defense fees or set-
tling the case," said Steven Klearman, a
Reno, Nev., lawyer representing Chung.
"He chose the latter."

"In the agreement, he does not admit any
of the allegations contained in that docu-
ment," Klearman said.

Software continued on page 9A

The Sept. 21 shutdown of the Cloud
9 bulletin board was the first involv-
ing software piracy in the Twin Cit-
ies, but the problem of illegal soft-
ware duplication is widespread.  Na-
tionwide, software publishers esti-
mate that more than $12 billion is
lost every year involving business
programs alone because of piracy.

Chung has not been charged with any
criminal offenses, although the U.S.
Attorney's office is investigating.

A federal marshal shut down Cloud 9
in response to a federal court order
after investigators for Microsoft and
Novell gathered evidence that
Chung's bulletin board was trading
copyrighted software with customers
who dialed in.

In some cases, customers paid small
cash "donations" in return for getting
over-the-phone, unauthorized copies
of software such as Microsoft's
"Works for Windows" and Novell's
"Netware 3.12."  An undercover FBI
agent reportedly paid $100 for an
illict copy of such software.

Chung told investigators that he con-
sidered Cloud 9 a hobby, one he
started a few years ago in St. Louis as
a high school student.  He moved to
Minneapolis to enroll as a pre-med
student at the University of Minne-
sota.

"We went in with incredibly detailed
information about this bulletin
board," said Felicia Boyd, a Faegre &
Benson attorney hired by Microsoft
and Novell.  "We felt it was a signifi-
cant operation."

But the lawyers were astonished by
the extent of what they found when
they and the federal marshal entered
Chung's apartment at 1400 S. 2nd St.

"What we expected to find was may-
be two computers, a couple of phone
lines and some software," Boyd said.

Instead, the apartment's bedroom
was crammed with six computers,
tape backup drives and hard drives
with 22 gigabytes of software.  A giga-
byte is the equivalent of 500,000
pages of printed text.

Cloud 9 computers not only had du-
plicates of commercial software that
costs hundereds of dollars to copy
when purchased in stores but also
contained duplicates of Microsoft
software not yet released for com-
mercial sale.  One of those programs
was Windows/95, the long-awaited
new version of the popular Windows
software.

Windows/95 is scheduled to be un-
veiled next year, but Microsoft has
distributed as many as 20,000 copies
for testing by companies and soft-
ware experts around the country.

-Retyped by Drowning Child
-11/13/94

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