
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, September 29, 1993                   TAG: 9309290099
SECTION: BUSINESS                    PAGE: B7   EDITION: METRO 
SOURCE: The Washington Post
DATELINE:                                 LENGTH: Short

FBI `STING' FINDS MASSIVE THEFT AT IBM

IBM has secretly been working with the FBI since 1991 on a "sting" operation aimed at uncovering theft and fraud that may have cost the faltering computer company hundreds of millions of dollars.

Law enforcement officials and an IBM executive confirmed that a computer parts trader named John Patterson bought and sold IBM parts and equipment in the huge market for used computer products. Hundreds of deals were captured on audio and video tape.

Because of lax management or theft, Patterson said, valuable IBM products were stacked in a scrap yard in Lexington, Ky. He said he once paid 10 cents apiece for 6,000 printer components in their original boxes and resold them for $6 to $20 each. Patterson has been given immunity from prosecution.

The sting sheds some new light on the financial crisis gripping IBM and suggests that during the late 1980s, the $60 billion company lost control over excess parts and discontinued products in its Lexington depot, which stored IBM surplus goods from all over the country.

"All across the United States, people would fly in, bid on the equipment," said Gary Pollmann, a Lexington police detective who spent almost two months working with Patterson in the guise of a scrap-yard employee. ". . . You'd have one guy coming in with holes in his pants, the next guy in a three-piece suit."

by CNB