...the 40 [Cisco 1841 routers] had been illegally modified to a Security (K9) bundle
That makes it sounds like someone did some hardware hacking to add the security module. It's a little less glamerous than that: Someone just copied the IOS from another 1841 router with the K9 feature set (or downloaded it from support.cisco.com)
I suspect that people illegally upgrading their devices software is a growing problem for Cisco. Devices are now starting to come with license keys which unlock IOS features.