Operation Digital Pirates Turns Out 26 Arrests for Counterfeiting

In May 2007, U.S. Immigration and Customs Enforcement (ICE) agents, working in conjunction with U.S. Secret Service (USSS), the Puerto Rico Bureau of Special Investigations, and officials of the Motion Picture Association of America (MPAA) and the Recording Industry of America (RIAA), launched the first phase of an operation dubbed Operation Digital Pirates.^[1] The first phase of the operation, which was launched in several flea markets throughout Puerto Rico, led to the seizure of more than 53,000 counterfeit music CDs and DVDs.^[2]

December 18, as part of Operation Digital Pirates, ICE agents teamed up with other federal and local law enforcement officers and arrested 21 individuals indicted by a federal grand jury in November 2007 for violations to federal intellectual property rights statutes.^[3] According to the indictment, the defendants infringed copyright laws by reproducing and distributing works such as music CDs and DVDs, for the purpose of commercial advantage or private financial gain.^[4]

''The growth in IPR violations in our jurisdiction is definitely one of our concerns as the enormous profits realized from the sale of counterfeit goods are used by international organized crime groups to bankroll other criminal activities, such as the trafficking in illegal drugs, weapons, and other contraband…We will continue conducting this type of operation with the assistance of our partners in the MPAA and RIAA in our efforts to dissuade those who contemplate to engage in this lucrative but criminal enterprise.'' said Manuel Oyola Torres, special agent in charge of ICE Office of Investigations in Puerto Rico.^[5]

In fiscal year 2006, U.S. Customs and Border Protection (CBP) and ICE marked an 83 percent increase in the number of IPR seizures, including 14,675 seizures of counterfeit goods worth more than $155 million, a 67 percent increase from the year before.^[6] ICE investigations resulted in 219 arrests, 134 indictments and 170 convictions in intellectual property rights violations.^[7]

Between fiscal years 2002 and 2006, ICE agents arrested more than 700 individuals for IPR violations and dismantled several large scale criminal organizations that distributed counterfeit merchandise to nations around the globe; at the same time, ICE investigations into these networks resulted in 449 criminal indictments and 425 convictions.^[8] Together, ICE and CBP seized more than $750 million worth of counterfeit goods from fiscal year 1998 through fiscal year 2006.^[9]The 26 individuals have been arrested for violations to 17 U.S.C. §§ 506(a)(1) & (b); 18 U.S.C. § 2319 (b)(1).

Willful copyright infringement
17 U.S.C. § 506(a)(1) In general states that any person who willfully infringes a copyright shall be punished as provided under section 2319 of title 18, if the infringement was committed A) for purposes of commercial advantage or private financial gain;
B) by the reproduction or distribution, including by electronic means, during any 180–day period, of 1 or more copies or phonorecords of 1 or more copyrighted works, which have a total retail value of more than $1,000; or C) by the distribution of a work being prepared for commercial distribution, by making it available on a computer network accessible to members of the public, if such person knew or should have known that the work was intended for commercial distribution.^[10]

Forfeiture and Destruction.— When any person is convicted of any violation of subsection (a), the court in its judgment of conviction shall, in addition to the penalty therein prescribed, order the forfeiture and destruction or other disposition of all infringing copies or phonorecords and all implements, devices, or equipment used in the manufacture of such infringing copies or phonorecords.^[11]

Criminal infringement of a copyright is covered under 18 U.S.C. § 2319 (b)(1), wherein it states that any person who commits an offense under section 506 (a)(1) of title 17, 1) shall be imprisoned not more than 5 years, or fined in the amount set forth in this title, or both, if the offense consists of the reproduction or distribution, including by electronic means, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, which have a total retail value of more than $2,500; 2) shall be imprisoned not more than 10 years, or fined in the amount set forth in this title, or both, if the offense is a second or subsequent offense under paragraph 1); and 3) shall be imprisoned not more than 1 year, or fined in the amount set forth in this title, or both, in any other case.^[12]

The criminal infringement of a copyright has a penalty up to five years imprisonment if it is a first offense, and ten years imprisonment if the offense is a second or subsequent offense, a fine up to $250,000, and a supervised release term. Trafficking in counterfeit labels affixed to the illegal copies of the motion picture DVDs or music CDs has a penalty of up to five years imprisonment.

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^[1] Lymarie V. Llovet-Ayala of the Office of United States Attorney Rosa Emilia Rodriguez-Velez, District of Puerto Rico, Twenty-Six Arrest Orders Issued Today for Copyright Violations, PRNewswire-USNewswire, December 18, 2007, available at http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=ORSENMUS.story&STORY=/www/story/12-18-2007/0004725204&EDATE=TUE+Dec+18+2007,+06:58+PM (last visited December 22, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] Id.
^[10] 17 U.S.C. § 506(a)(1)(2007).
^[11] Id. at 506(b).
^[12] 18 U.S.C. § 2319 (b)(1)(2007).