posted 04-23-2004 01:48 PM                       

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April 23, 2004

Pirates face world of hurt

By Brooks Boliek
WASHINGTON -- Undercover agents raided dozens of locations around the world during a 24-hour period in an effort to break the command-and-control structure of highly sophisticated Internet pirate rings known as the "warez" networks.

"Operation Fastlink" identified more than 100 people in the United States and abroad involved in the theft of more than $50 million worth of music, movies and software, U.S. Attorney General John Ashcroft announced Thursday. An Arizona public school system also was identified.

"Intellectual property theft is a global problem that hurts economies around the world," Ashcroft said. "To be effective, we must respond globally."

More than 120 searches were conducted Wednesday in 27 states and 10 countries in an effort to dismantle the so-called warez networks known by such names as Fairlight, Kalisto, Echelon, Class, Project X and APC, he said. More than 200 computers, including 30 that served as storage and distribution hubs, contained thousands of copies of pirated material. One server seized in the United States contained 65,000 separate pirated titles, authorities said.


"Warez networks exist solely to engage in theft," Ashcroft said. He called them "highly sophisticated" and "highly structured" organizations that "direct day-to-day operations."

FBI searches have been conducted in Belgium, Denmark, France, Germany, Hungary, Israel, the Netherlands, Singapore, Sweden and Great Britain. No arrests were announced, but Ashcroft said they were coming.

While people on the warez networks usually don't make money off of their workings, they are a central distribution point for illegal movies, sound recordings and software before they are released in the theaters or on store shelves. For a warez operator to be the first to post a movie that's not in the theaters, or the latest music titles, is a badge of honor, said agents who coordinated the raids.

"It's not a for-profit enterprise," one fed said. "That's how people in the warez scene improve their reputations. ... Profit is actually looked down upon."

The agents said that the community is made up of a wide range of people who often have families and good jobs and are extremely sophisticated and knowledgeable computer users. If convicted of violating the federal copyright law, they could face up to five years in jail.

While they might not be selling their ill-gotten gains, "they do profit in that they get the keys to the candy store," said another agent working on the ongoing investigation. "They do so knowing that it will be distributed widely."

The warez community might be made up of moms and pops all over the world, but that doesn't mean they are above the law, Ashcroft said.

"The individuals and organizations we are discussing use the Internet to steal and make available to a select group of individuals at little or no cost movies, games, music and computer software," he said. "In some cases, as with popular films or music, these online thieves illicitly procure and release movies online before the general public is able to see them in theaters or buy the CDs in the stores."

Ashcroft and the agents refused to say how they uncovered the suspects or how they stopped the computer-savvy warez community from telling everyone on the networks what was happening. But they said the cooperation of international police forces was indispensable.

"The synchronized efforts of law enforcement worldwide prevented the thieves from destroying the evidence or disappearing into cyberspace without detection," he said.

One agent said their techniques differ from the ones used by the music industry in catching P2P users who illegally share files. The MPA, the RIAA, the Entertainment Software Assn. and the Business Software Alliance also helped the department with the raids, Ashcroft said.

The raids, which were about two years in the making, are an example of the importance the Justice Department puts on intellectual property crimes, Ashcroft said.

"This is a priority for the Justice Department," he said. "We are committed to combating this theft and will pursue these thieves regardless of their location."

The department's aggressive action was welcomed by the copyright community.

"The actions taken today by the Department of Justice and FBI strike at the heart of the highly organized and technologically sophisticated groups that traffic in intellectual property theft on a global scale," MPA senior vp John Malcolm said. "We welcome the news today and commend the Department of Justice for committing the resources to go after these criminal syndicates that exist for the sole purpose of profiting from other people's creative works. Today, their illegal schemes have been exposed, and they will face the full weight of the law."

A spokesman for the Deer Valley (Ariz.) Unified School District said they were cooperating with the Justice Department's investigation. The raid on the school system doesn't involve students but focused on its back-shop operations where teachers' paychecks are written and other support operations occur, system spokesman Timothy Tait said.

"We're just as interested in figuring out what's going on and putting a stop to it as much as the FBI," he said.

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