U.S. Department of Justice - CyberCrime.gov Archived

Copyright Cases - U.S. v. Soares (Peterman, Leung, Morada, McAleer) (N.D. Cal.) (Operation Site Down; Operation Copycat)

April 6, 2006
U.S. Department of Justice
Northern District of California
United States Attorney
11th Floor, Federal Building
450 Golden Gate Ave., Box 36055
San Francisco, California 94102
Contact: (415) 436-7200
FAX: (415) 436-7234

Five Additional Defendants Charged with Violating Copyright Laws as Part of Operation Copycat

20 Defendants Convicted Thus Far, including Three Site Operators

32 Defendants Charged to Date in Ongoing Investigation

SAN JOSE -- United States Attorney Kevin V. Ryan announced that as part of the ongoing prosecution arising out of Operation Copycat, a federal grand jury in San Jose returned a four-count indictment charging five additional individuals with violations of federal copyright laws. To date, 32 individuals have been criminally charged as part of the ongoing investigation into online warez" sites, and 20 of those have been convicted since September 26, 2005.

Based on today's indictment, the following five persons were each charged with Conspiracy to commit criminal copyright infringement:

Defendants Soares, Leung and Morada were also charged with violating the No Electronic Theft Act (known as the "NET Act") for copyright infringement by electronic means over the Internet. The indictment also contains forfeiture allegations against defendants Leung and Morada to forfeit computer and other equipment used to violate the criminal copyright laws. The equipment was seized during the execution of federal search warrants executed on June 29, 2005.

A substantial amount of equipment used in the copyright violations is being forfeited to the government. As part of each plea agreement, each defendant has agreed to forfeit any right, title and interest they have in computer and other equipment that was seized during the federal search warrants executed on June 29, 2005. The Forfeiture Section of the U.S. Attorney's Office has assisted on the forfeiture of the following materials to date:

The defendants will be arraigned on the indictment on May 11, 2006 at 2:00 p.m. before United Magistrate Judge Richard Seeborg in San Jose.

Description of Warez Sites:

The charges stem from the undercover investigation targeting online "warez" groups illegally distributing newly-released movies, games, software and music. "Warez groups" are the "first-providers" of copyrighted works to the warez underground - the so-called "release" groups that operate as the original sources for a majority of the pirated works distributed and downloaded via the Internet.

Once a warez release group prepares a stolen work for distribution, the material is distributed in minutes to secure, top-level warez servers throughout the world. From there, within a matter of hours, the pirated works are distributed globally, filtering down to peer-to-peer and other public file sharing networks accessible to anyone with Internet access.

Higher level members of the warez groups, known as site operators or "SiteOps," administered and maintained the site and controlled access to the site by use of security measures such as usernames and passwords. Others serve as "equipment suppliers" (providing hardware (such as hard drives, computer parts, and computer servers) to the warez site), "encoders" or "crackers" (those defeating copy protection devices); "scripters" (creating, programming, and helping build the warez site); "brokers" (who found groups to participate on the warez site). Lower level members included "suppliers" (providing an unauthorized copyrighted movie, game or software), "cammers" (those making unauthorized camcorder recordings in movie theaters), "couriers."

20 Guilty Pleas To Date:

Since September 2005, the following individuals have been convicted as part of Operation Copycat, including:

The following persons have pleaded guilty to conspiring to commit criminal copyright infringement and to violating the NET Act and aiding and abetting with the date of conviction noted:

The following persons have pleaded guilty to violating the NET Act and aiding and abetting with the date of conviction noted:

The maximum penalties for conspiring to violated federal copyright law, in violation of 18 U.S.C. § 371, are five years in prison and three years of supervised release. The maximum penalties for violating the NET Act, in violation of 17 U.S.C. § 506(a)(1)(B), and 18 U.S.C. § 2319(c)(1), are three years in prison and two years of supervised release. A maximum fine of $250,000 applies to each offense, and a mandatory special assessment of $100 applies for each conviction. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553. An indictment only contains allegations and these defendants, as with all defendants, must be presumed innocent unless and until convicted.

Mark L. Krotoski is the Assistant U.S. Attorney from the CHIP Unit who is prosecuting the case, along with the assistance of Legal Assistants Mimi Lam and Lauri Gomez. Stephanie M. Hinds is the Assistant U.S. Attorney, along with Alicia Chin, paralegal, assisting with the asset forfeiture matters on the case.

Further Information:

More information on Operation Copycat may be found at: http://www.usdoj.gov/usao/can/press/html/2005_07_14_copycat_indictment.html.

More information on Operation Site Down may be found at: http://www.cybercrime.gov/OperationSiteDown.htm

A copy of this press release and related court filings may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney's Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.


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