Feds tout software piracy bust, guilty plea

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Photo -   U.S. Attorney Charles Oberly speaks during a news conference in Wilmington, Del., Tuesday, Jan. 8, 2013, to announce that one of two Chinese nationals charged in an international software piracy scheme has pleaded guilty to conspiracy. The case involved a website called "Crack 99" that sold pirated software in which access control mechanisms had been "cracked," or circumvented. (AP Photo/Patrick Semansky)
U.S. Attorney Charles Oberly speaks during a news conference in Wilmington, Del., Tuesday, Jan. 8, 2013, to announce that one of two Chinese nationals charged in an international software piracy scheme has pleaded guilty to conspiracy. The case involved a website called "Crack 99" that sold pirated software in which access control mechanisms had been "cracked," or circumvented. (AP Photo/Patrick Semansky)
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WILMINGTON, Del. (AP) — A guilty plea from a Chinese national involved in an international software piracy scheme serves as a reminder that the U.S. government takes software piracy seriously, federal law enforcement officials said Tuesday.

Xiang Li, 36, of Chengdu, China, pleaded guilty Monday in U.S. District Court in Wilmington to conspiracy to commit copyright infringement and conspiracy to commit wire fraud. He faces up to 25 years in prison when he is sentenced on May 3. Prosecutors agreed to drop more than 40 other counts against Li in exchange for his guilty pleas.

Authorities last year charged Xiang Li and a co-defendant, Chun Yan Li, with conspiracy, copyright infringement, smuggling, wire fraud, interstate transportation of stolen goods and other crimes.

The charges involve a website called "Crack 99" that sold pirated software, designed for high-tech industrial applications in which the access control mechanisms had been "cracked," or circumvented.

Chun Yan Li is still in China and has not been arrested, said Assistant U.S. Attorney David Hall. Mingli Chen, an attorney for Xiang Li, said all remaining charges against his client as well as those against Chun Yan Li will be dismissed as a result of the plea bargain.

Prosecutors said the defendants reproduced and distributed copyrighted software produced by more than 150 manufacturers before Xiang Li was arrested after traveling to Saipan in 2011 to meet with undercover agents posing as customers.

Authorities released video clips from the undercover operation at a news conference Tuesday.

"This was a very important case. This was big-time crime," said John Morton, director of U.S. Immigrations and Customs Enforcement.

While Morton said he was not aware of any specific threat to national security arising from the piracy scheme, authorities said the case involved more than 550 copyrighted software titles valued at more than $100 million. Prosecutors said the pirated software was sold at a fraction of normal prices to at least 325 purchasers in at least 28 states and more than 60 foreign countries.

"This is organized crime, pure and simple," said Morton, who described Xiang Li as a middleman for the people who actually cracked the software programs. The programs are used in a variety of applications, including defense, manufacturing, engineering, aerospace simulation, explosive simulation and space exploration.

Morton said the counterfeiting and piracy of such programs is "an assault on American industry."

Hall said Xiang Li would send customers hyperlinks to servers where the pirated software titles were stored after they sent him money, usually through Western Union.

Authorities have obtained guilty pleas from two of Xiang Li's biggest American customers.

Officials said Xiang Li sold 12 cracked software programs worth more than $1.2 million to Cosburn Wedderburn, who was then an electronics engineer at NASA's Goddard Space Flight Center, in Greenbelt, Md.

Xiang Li also allegedly sold 10 cracked software programs worth more than $600,000 to Wronald Best, described as chief scientist at a Kentucky-based government contractor that services the U.S. and foreign militaries and law enforcement with a variety of applications such as radio transmissions, radar usage, microwave technology and vacuum tubes used in military helicopters.

Wedderburn and Best, who once worked at the Naval Surface Warfare Center, both pleaded guilty to conspiracy to commit criminal copyright infringement and are awaiting sentencing.

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