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Arcade Game Pack Counterfeiters Indicted In UltraCade Case
by Leigh Alexander
    July 10, 2009  

The former owner of UltraCade Technologies has been indicted on charges that he counterfeited game packs for his classic arcade game business following its sale to Global VR, and sold them for his personal profit.

According to a report in the San Francisco Chronicle, David Russell Foley and Michael Daddona, who allegedly bought the stolen software from Foley, were named in a 35-count indictment including charges of conspiracy, trafficking in counterfeit goods and theft of trade secrets, among other fraud charges.

San Jose-based UltraCade created an officially licensed classic arcade game product line, including game packs. Foley sold the company and its IP in 2006 to fellow San Jose company -- and one of the major remaining arcade firms -- Global VR (Justice League Heroes United).

A version of the UltraCade classic arcade technology continues to be sold by Global VR under the Global Arcade Classics brand, including licensed games from Konami (Frogger), Atari (Asteroids), and many more.

However, Foley is accused of secretly manufacturing and selling counterfeit game packs for the system following the sale to Global VR, in association with Daddona, after secretly retaining the technology that allows game packs to be made.

Daddona is owner of Connecticut arcade company Automated Services, and is accused of knowingly advertising the counterfeit packs on eBay at lower prices than the official ones -- as well as selling them as if they were official Global VR packs.

Gamasutra has obtained a copy of the full indictment in the case -- which also reveals that the duo were selling games not even licensed by Global VR from companies such as Nintendo, Namco, and Taito -- and will be following up with a more detailed story in the near future.

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.

E-mail Henry K. Lee at hlee@sfchronicle.com.

This article appeared on page D - 4 of the San Francisco Chronicle