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8/7/2007
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Two Men Sentenced In Largest U.S. CD, DVD Pirating Case

Federal agents seized nearly 500,000 CDs and 6,135 stampers capable of producing more than 300 million disks of pirated and counterfeit software.

Two men were sentenced Monday in what the government is calling the largest CD and DVD pirating scheme to be prosecuted in the United States.

Ye Teng Wen, also known as Michael Wen, 31, and Hao He, who is sometimes called Kevin He, 32, both of Union City, Calif., were each sentenced to 37 months in federal prison, three years of supervised release, a $125,000 fine, and a $500 mandatory special assessment. On June 4, a third conspirator, Yaobin Zhai, also known as Ben Zhai, 34, of Fremont, Calif., received the same sentence but also was ordered to pay $6.9 million in restitution.

The arrests came as part of an undercover operation -- called Operation Remaster -- run by the FBI and the Rapid Enforcement Allied Computer Team (REACT) Task Force. On Oct. 6, 2005, federal investigators executed search warrants at 13 locations in California and Texas, including the offices of Media Art Technology, Magic Media, and BDG Publishing. According to a Department of Justice release, agents seized about 494,000 pirated music, software, and movie CDs, and DVDs, and more than 6,135 stampers, which are used to manufacture the CDs and DVDs.

The government estimated that that amount of equipment could reproduce more than 300 million pirated CDs and DVDs.

"These indictments reflect the historic nature of this particular piracy operation," said Brad Buckles, executive VP for anti-piracy at the Recording Industry Association of America, in a written statement. "This case was the largest-ever manufacturing case in U.S. history, involving massive quantities of commercially duplicated counterfeits that closely resemble authentic CDs. The level of sophistication and scale involved was unprecedented. It is precisely this kind of illegal product that has the greatest potential for deceiving the consumer and displacing legitimate sales."

Prosecutors reported that the copyright and trademark violations involved Spanish-language music, as well as Adobe Photoshop CS and Symantec anti-virus software, including pcAnywhere.

In court proceedings, the defendants admitted infringing on trademarks and using counterfeit labels with the FBI Anti-Piracy Seal on pirated music to trick consumers into thinking they were buying legitimate products.

"It cannot be understated how significant it has been for law enforcement agencies, such as the FBI and the Rapid Enforcement Allied Computer Team (REACT) Task Force and the U.S. Attorney's Office to devote the resources, time, and manpower to bring this case to full closure," said Scott Minden, director of the Symantec Legal department, in a written statement. "This case cuts across several industries, including movies, music, and software. An untold number of consumers have been protected from being ripped off by these pirates, and we congratulate the FBI and the U.S. Attorney's office for the service they have rendered to the public at large."

This past June, the man, known as the Bandido and described by U.S. prosecutors as the leader of one of the oldest and most renowned Internet software piracy groups, was sentenced to 51 months in prison.

Hew Raymond Griffiths, 44, a British national living in Bateau Bay, Australia, was sentenced based on one count of conspiracy to commit criminal copyright infringement in U.S. District Court in Alexandria, Va. He was extradited to the U.S. this past February. Griffiths had spent nearly three years incarcerated at a detention center in Australia while fighting his extradition in Australian court.

And in March, Italian authorities closed down a peer-to-peer site and seized servers they said shared more than 600,000 pirated music tracks daily, contributing to $1 million (U.S.) worth of losses.

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