Arcade-Game Software Theft Alleged - Former Owner of UltraCade Technologies Indicted

The San Francisco Chronicle is reporting that two men have been indicted by a federal grand jury on charges that they stole arcade-game software belonging to a San Jose company.

David Russell Foley of Los Gatos and Michael Daddona were named in a 35-count indictment unsealed this week. The indictment, handed up July 1 by a grand jury in San Jose, includes charges of conspiracy, trafficking in counterfeit goods, theft of trade secrets, mail and wire fraud, conspiracy to commit money laundering and bank fraud.

Foley pleaded not guilty Wednesday and was released on $100,000 bond.

Foley owned UltraCade Technologies in San Jose, which produced game packs, collections of video games that could be loaded onto arcade video-game machines. Foley sold his company and its intellectual property to Global VR of San Jose in June 2006.

But just before he sold UltraCade, Foley made game packs at his home using a burner stolen from UltraCade, the indictment said.

Foley was fired from the company, but for the next two years, he kept the proprietary code and trade secrets now belonging to Global VR and "secretly manufactured and sold game packs with counterfeit markings belonging to Global VR for his own financial benefit," the indictment said.

In doing so, Foley stole the code that enabled consumers to play Global VR games - as well as those licensed to other companies including Namco, Nintendo and Taito - on video-arcade game platforms belonging to Global VR, authorities said.

Foley sold the game packs he made to Automated Services, a Connecticut arcade-game company owned by Daddona, the indictment said. Daddona advertised the game packs on eBay at a lower price and sold them to customers across the country, authorities said.

Foley also sold a burner to Daddona, enabling Daddona to make game packs, the indictment said.