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Piracy Software The Almighty Buck The Courts

Man Who Sold $100 Million Worth of Pirated Software Gets 12 Years In Prison 304

Posted by Soulskill
from the go-big-or-go-home dept.
An anonymous reader sends this quote from Bloomberg: "A Chinese national was sentenced to 12 years in a U.S. prison for selling more than $100 million worth of software pirated from American companies, including Agilent Technologies Inc., from his home in China. Li and his wife, of Chengdu, China, were accused of running a website called 'Crack 99' that sold copies of software for which 'access-control mechanisms had been circumvented, the U.S. said in an unsealed 46-count indictment. The pair was charged with distributing more than 500 copyrighted works to more than 300 buyers in the U.S. and overseas from April 2008 to June 2011. The retail value of the products was more than $100 million, the government said. Li is the first Chinese citizen to be 'apprehended and prosecuted in the U.S. for cybercrimes he engaged in entirely from China,' prosecutors said in court filings."
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Man Who Sold $100 Million Worth of Pirated Software Gets 12 Years In Prison

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  • by TrollstonButterbeans (2914995) on Wednesday June 12, 2013 @05:17AM (#43982883)
    He should have done the transactions in bitcoin.
  • Good (Score:4, Insightful)

    by gigaherz (2653757) on Wednesday June 12, 2013 @05:20AM (#43982889)
    THIS is proper use of the copyright laws.
    • Re:Good (Score:4, Insightful)

      by Krneki (1192201) on Wednesday June 12, 2013 @05:24AM (#43982907)

      Is it ?

      I'm don't know about copyright laws in China, but unless you breach your country law, the US can fuck off.

      • Re:Good (Score:5, Insightful)

        by TrollstonButterbeans (2914995) on Wednesday June 12, 2013 @05:40AM (#43982983)
        He sold to US buyers establishing jurisdiction. If he did not sell to US buyers and to only -- as an example --- Chinese buyers, US courts would likely not have jurisdiction ....

        .... Although in this "new post-Megaupload Wikileaks kill people with drones NSA monitors all" world maybe the US government has no limits any longer as the US courts no longer are willing to rule that such limits exist.
        • Re: (Score:3, Insightful)

          by Anonymous Coward

          I think with all the drone strikes in the world you would realize the US has jurisdiction where ever it fucking feels like.

          • Re:Good (Score:5, Funny)

            by L4t3r4lu5 (1216702) on Wednesday June 12, 2013 @08:29AM (#43983759)
            They can damn well try! I'm behind seven proxi###&4%f2a664#NO CARRIER
          • Re:Good (Score:5, Informative)

            by 1s44c (552956) on Wednesday June 12, 2013 @09:53AM (#43984369)

            I think with all the drone strikes in the world you would realize the US has jurisdiction where ever it fucking feels like.

            The US has less legal constants outside the US than inside it. The US can imprison, torture, or kill without legal comeback in most of the world, but can't even detain people without trail in the US. That's the reason Gitmo is in Cuba not Texas.

        • Re:Good (Score:4, Interesting)

          by Anonymous Coward on Wednesday June 12, 2013 @06:09AM (#43983095)

          So if I sell to Chinese buyers I'm bound by Chinese law? You don't see how that might be a very bad thing?

          Can't have it both ways. If Chinese citizens are bound by US law then US citizens must be bound by Chinese law. For China to agree to extradite without tit for tat would make them very stupid.

          • Re:Good (Score:5, Informative)

            by bloodhawk (813939) on Wednesday June 12, 2013 @06:50AM (#43983261)
            If you are trading with chinese citizens on chinese soil then then yes you are bound by chinese laws for those dealings, actually in most circumstances you are bound by the laws of both countries. It is one of the reasons many of the big multinationals need so many friggen lawyers as every countries laws are slightly different and they are regularly bound by multiple countries laws when trading and selling goods.
          • Re: (Score:2, Informative)

            by Anonymous Coward

            For China to agree to extradite without tit for tat would make them very stupid.

            You mean just like the stupid UK ?

          • Re:Good (Score:4, Interesting)

            by 1s44c (552956) on Wednesday June 12, 2013 @10:06AM (#43984503)

            Unless I'm thinking of the wrong person China didn't extradite. US agents lied about some huge deal to get the guy to go to a US territory of his own free will. Once there he was arrested.

            But generally speaking the US considers US law to be global but everyone else's law to be local to them.

        • by Krneki (1192201)

          Depends where the servers were located, if they were in China, then the only one to blame are the US citizens that bought the goods.

          It's the same if you go to a foreign country and buy drugs not allowed in your country. The seller there can't be persecuted.

          • Re:Good (Score:5, Informative)

            by julesh (229690) on Wednesday June 12, 2013 @07:50AM (#43983539)

            Depends where the servers were located, if they were in China, then the only one to blame are the US citizens that bought the goods.

            It's the same if you go to a foreign country and buy drugs not allowed in your country. The seller there can't be persecuted.

            Your argument makes good logical sense. Unfortunately, it is not the approach courts have taken to deciding questions of this kind. The courts have instead asked where the was customer when he made the purchase, and used this as the basis of deciding what laws apply to the sale. The original reason for this was to make things easier for consumers, who shouldn't be expected to have to know the laws of the countries of sellers they deal with (particularly as they may not even have any way of knowing where the seller is), but it has been extended since then into areas where this justification makes no sense.

        • by Hatta (162192)

          He sold to US buyers establishing jurisdiction. If he did not sell to US buyers and to only -- as an example --- Chinese buyers, US courts would likely not have jurisdiction ....

          By that argument, me saying "the Thai king is an ignorant malodorous halfbreed" to citizens of Thailand would grant Thailand jursidiction to prosecute me for lese majeste.

      • Re:Good (Score:5, Interesting)

        by ranulf (182665) on Wednesday June 12, 2013 @05:40AM (#43982987)
        He was on US soil, so he can be arrested for actions illegal under US law. This is a fairly common precedent when the law was broken in the US but they have since left. This is newsworthy because the crimes occurred outside the US but he was still considered to have broken US law.
        • Re:Good (Score:5, Interesting)

          by xelah (176252) on Wednesday June 12, 2013 @06:05AM (#43983075)
          An interesting parallel would be people in the US who allow seditious comments harmful to public order in China (or so they'll say) to be posted on their websites, which are then accessed by Chinese people. Will China now feel a whole lot happier about arresting Americans for this should they go anywhere where China has enough influence, or have their flights diverted? Or, indeed, just accuse Americans of stuff to keep them out or stop them selling stuff there.
          • Re:Good (Score:5, Informative)

            by devman (1163205) on Wednesday June 12, 2013 @09:04AM (#43984007)
            This happened in Thailand not to long ago. Some dude (from the UK I believe) made fun of the king of thailand on his blog, went on vacation to Thailand months later and was arrested for it.
            • Re:Good (Score:4, Interesting)

              by rahvin112 (446269) on Wednesday June 12, 2013 @12:13PM (#43985767)

              There have been several arrested in China. The Chinese tend to limit these arrests to those you speak and write in a Chinese dialect though which is frequently expat's. I believe there is an American expat doing 10 years in hard labor right now for comments he posted while in America.

          • by rvw (755107)

            An interesting parallel would be people in the US who allow seditious comments harmful to public order in China (or so they'll say) to be posted on their websites, which are then accessed by Chinese people. Will China now feel a whole lot happier about arresting Americans for this should they go anywhere where China has enough influence, or have their flights diverted? Or, indeed, just accuse Americans of stuff to keep them out or stop them selling stuff there.

            For Americans this does not apply. EU citizens probably not as well. It will result in too much (international) political problems for the Chinese. But take an average Zambesian guy, and he might be not so lucky.

        • Re:Good (Score:5, Interesting)

          by mrbester (200927) on Wednesday June 12, 2013 @06:09AM (#43983101) Homepage

          I like how he got less than someone who *doesn't* sell what they pirate can get. There's a lesson there...

        • by gl4ss (559668)

          He was on US soil, so he can be arrested for actions illegal under US law. This is a fairly common precedent when the law was broken in the US but they have since left. This is newsworthy because the crimes occurred outside the US but he was still considered to have broken US law.

          Sorry, but there's nothing newsworthy about that!

      • Re:Good (Score:5, Informative)

        by Malc (1751) on Wednesday June 12, 2013 @05:55AM (#43983039)

        He went to Saipan where he tried to sell software and data to US agents pretending to be business men. Isn't Saipan US territory? Perhaps you should try RTFA before sounding of like a dickhead.

        • Re: (Score:2, Interesting)

          by AK Marc (707885)
          Yes, he was entrapped in Saipan, and prosecuted for crimes he didn't commit while in the US. His mistake was not equating Saipan with Washington DC. He might as well have been on the lawn of the White House selling bootlegs. At least it's good to know that entrapment is legal again.
          • Re: (Score:2, Insightful)

            by Anonymous Coward
            Luring someone to where you can arrest them has always been legal. How is this any different from the old tactic of police sending messages saying "Come to this address, you've won a boat!" to people who have warrants out against them?
            • Re: (Score:3, Insightful)

              by Anonymous Coward

              However, you need to have committed a crime in that country before you can lure them into your country.

              You cannot, for example, lure someone on to your land then shoot them for trespassing.

              • Wrong. You have to do something you wouldn't normally do for it to be entrapment. Law enforcement can pretend to offer to do illegal business to catch a copyright infringer just as sure as they can leave cars unlocked to catch car thieves or send a minor to buy cigarrettes or alcohol to catch cashiers that don't check ID or offer to have sex with you for money.. It's only entrapment if they force you to do it.
          • Re: (Score:3, Informative)

            by thebigmacd (545973)

            You have no idea what entrapment is, do you? Entrapment by nature cannot be performed by undercover police pretending to be something else.

            Entrapment is when a police officer *who identifies themselves as a police officer* orders or asks someone to do something illegal and the person complies *because they are a police officer*. They then proceed to arrest the person for committing a crime they told them to do. THAT is entrapment.

            Police have the authority to direct you to do something illegal such as drive

            • Re:Good (Score:4, Informative)

              by Anonymous Coward on Wednesday June 12, 2013 @08:16AM (#43983673)

              Not entirely correct. Your description matches one of two tests, but is narrower.

              from Wiki

              Two competing tests exist for determining whether entrapment has taken place, known as the "subjective" and "objective" tests. The "subjective" test looks at the defendant's state of mind; entrapment can be claimed if the defendant had no "predisposition" to commit the crime. The "objective" test looks instead at the government's conduct; entrapment occurs when the actions of government officers would have caused a normally law-abiding person to commit a crime.

              A non-uniformed government agent can indeed entrap someone. Asking if you'll sell them pot isn't entrapment. Haranguing them until the finally agree to sell you pot is.

            • by ATMAvatar (648864)
              Entrapment [wikipedia.org] has no requirement that the officer identify him- or herself as such. Rather, the primary definition of entrapment deals more with the idea that the otherwise law-abiding individual committed the crime due to the officer's actions, identified or not. If self-identification of the officer were a component, then there would never be any question of entrapment by undercover officers.
            • Re:Good (Score:4, Informative)

              by sribe (304414) on Wednesday June 12, 2013 @09:24AM (#43984153)

              You have no idea what entrapment is, do you? Entrapment by nature cannot be performed by undercover police pretending to be something else.

              That is simply not true. Current definition of entrapment is greatly influenced by John DeLorean's case (where he agreed to deal drugs because undercover FBI officers threatened his life and his family).

            • Re:Good (Score:4, Informative)

              by Warhawke (1312723) on Wednesday June 12, 2013 @09:49AM (#43984329)

              You are mistaken.

              The legal definition of entrapment varies from country to country, but the basic definition is that entrapment occurs when a law enforcement agent induces a person to commit a crime that he or she otherwise would not have committed. Knowledge that the person is a law enforcement officer is not required. See, e.g. Jacobson v. United States, 503 U.S. 540 (1992). What is required is some form of but-for causation -- that but for the law enforcement officer's conduct, the defendant would not have committed the crime. Whether the defendant knows the officer is a law enforcement agent goes to objective / subjective state of mind standards regarding whether the defendant was likely to commit the crime -- i.e. inducement is harder to prove if the defendant did not know the facilitator was a figure of legal authority, because there is less of an indication of compulsion. In Jacobson, the government targeted the defendant with a child pornography mail subscription and arrested him upon his receipt and opening. The Supreme Court overturned his conviction on the grounds that the defendant did not have a predisposition towards purchasing child pornography (as no other child pornography was found in his home), and therefore but for the post office inspectors' actions, Jacobson would not have committed a crime.

              What you may be referring to is entrapment by estoppel. That "applies when, acting with actual or apparent authority, a government official affirmatively assures the defendant that certain conduct is legal and the defendant reasonably believes that official." United States v. Howell 37 F.3d 1197, 1204 (7th Cir. 1994).

          • Re:Good (Score:4, Informative)

            by Cassini2 (956052) on Wednesday June 12, 2013 @09:54AM (#43984391)

            The US will arrest people on US territory or in international waters using whatever methods they can. For instance, in Operation Goldenrod [homestead.com] a suspect was lured onto a yacht, and then taken to international waters. He was interrogated aboard US Navy ships, and returned to the US via an aircraft carrier.

            Additionally, under the Ker-Frisbie doctrine [wikipedia.org] people can be prosecuted regardless of the legality of the method of their extradition. For example, the DEA hired Trent Tompkins (a private citizen) to kidnap Alvarez-Machain [wikipedia.org] in Mexico and return him to the United States, where he was later tried over Mexico's objections.

            Finally, state police can act outside of their home state to arrest someone and bring them to trial. In the case of Shirley Collins [historycommons.org], the accused was kidnapped in Chicago (illegally) by Michigan police, brought to trial and convicted.

          • Re:Good (Score:4, Funny)

            by Main Gauche (881147) on Wednesday June 12, 2013 @10:09AM (#43984525)

            Yes, he was entrapped in Saipan, and prosecuted for crimes he didn't commit while in the US.

            2. Promptly escape through the Los Angeles underground.
            3. Work as soldier of fortune.
            4. Profit!

        • by Krneki (1192201)

          That is why I put a question mark in my sentence and I used a hypothetical situation.

      • I suggest you read up on US citizen Gary Lauck and see how Europeans handle something similar........

        "Lauck was arrested in Denmark in 1995, leading to a far right campaign in the USA against plans to extradite him to Germany, where he was wanted for distributing neo-Nazi propaganda. Nevertheless Lauck was deported to Hamburg where he was tried and found guilty of distributing neo-Nazi pamphlets. He was sentenced to four years imprisonment."

        http://en.wikipedia.org/wiki/Gary_Lauck [wikipedia.org]

      • by 1s44c (552956)

        Is it ?

        I'm don't know about copyright laws in China, but unless you breach your country law, the US can fuck off.

        This Chinese man was silly enough to enter a US territory of his own free will. US agents lied to him about a business deal but even so he should have had some idea that maybe the US wanted him.

    • Re:Good (Score:5, Interesting)

      by loonycyborg (1262242) on Wednesday June 12, 2013 @08:14AM (#43983659)
      Really? 12 years in prison just for possibly decreasing someone's profits? That's definitely cruel and unusual punishment.Such terms should be reserved for murderers and what-not.
      • By that standard, Jeffrey Skilling (Enron) should get off because he was *only* decreasing someone else's retirement account.
        • He ended up serving about the same term anyway, while scale of his actions were an order of magnitude more than that of some pirate that even doesn't ripoff any retirees or other people in need of government assistance.
  • by mysidia (191772) on Wednesday June 12, 2013 @05:21AM (#43982899)

    500 copyrighted works to more than 300 buyers in the U.S. and overseas

    The retail value of the products was more than $100 million, the government said.

    In other words... on average ~$200,000 per product, and ~$333 thousand per buyer

    This makes sense, when you are talking about companies like Agilent that sell overpriced products, that retail for probably approximately $500,000

    That's why the "pirated $100 million in software" is neither impressive, nor indicating a particularly outrageous pirate.

    The outrage, should be the pricing of Enterprise software, not the" inflated retail price " as some sort of metric of the pirate's activity.

    Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

    In simple economic terms... the high price places their product out of demand.

    By definition, they're worth what the buyer was willing to pay the pirate for the procureent.

    If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

    • by Pubstar (2525396) on Wednesday June 12, 2013 @05:31AM (#43982945)
      If you read TFA, you would have realized that most of the sales were to counties that have US trade embargoes imposed.
    • by ranulf (182665) on Wednesday June 12, 2013 @05:36AM (#43982971)

      I wanted to make this point, but more so. The guy sold copyrighted material to 300 people. Let's say $100 a pop, which sounds high for someone to fork over for known pirated material. That's $30,000 which is by my reckoning about 4 months salary for the typical person in the US. But this was actually over a 3 year period.

      Piracy is bad, and I don't agree with it, and even more so because my livelihood comes from software development of things that are typical targets of piracy, but the punishment here seems massively out of proportion to the crime. 12 years in prison is in the same ballpark as a murder.

      • I'd just like to point out that the median personal income in the US in 2012 was 42,693 USD.

        I don't know where you're living, but I'd like to live there if the typical personal income is 90k.
        • by Grishnakh (216268)

          I don't know where you're living, but I'd like to live there if the typical personal income is 90k.

          Maybe he lives in Manhattan or Silicon Valley. With typical rents being $3k/month and up, someone making $43k would never be able to afford to live there.

      • A typical person in the US makes $90,000 a year? What?

        • by rockout (1039072)

          On the Upper East Side of Manhattan, per capita income is over $90,000/year, and well over $100K/household on average.

          But yes, in most other parts of the country, he's way off. Perhaps he lives in Manhattan and has a skewed sense of what people make.

          • by ranulf (182665)
            Actually, I live in the UK and what little I know about US wages comes from friends working in tech jobs in CA. But regardless of the actual figures, even if the average salary is double or half of what I said, the point was that 12 years in prison is an unfair punishment compared to the actual crime.
        • They also own a yacht and have oil wells. I saw it on an episode of Dallas.
      • The corporations that build and operate our prisons demand a minimum occupancy, and by god, they're gonna get it, if we have to lock up the whole country.

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      ...If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

      Legal trade embargoes obviously cast aside for a moment, I'd say you truly don't understand how difficult it might be to price certain types of software. A product used in engineering and design that costs $100,000 and $10,000 per person per year to maintain sounds like it might be priced fairly when talking about using it to design our next-generation communication satellites or Mars space rover. That investment in design might make you the preferred vendor generating millions in revenue.

      But the instant

    • by Registered Coward v2 (447531) on Wednesday June 12, 2013 @07:13AM (#43983359)

      500 copyrighted works to more than 300 buyers in the U.S. and overseas

      The retail value of the products was more than $100 million, the government said.

      In other words... on average ~$200,000 per product, and ~$333 thousand per buyer

      This makes sense, when you are talking about companies like Agilent that sell overpriced products, that retail for probably approximately $500,000

      That's why the "pirated $100 million in software" is neither impressive, nor indicating a particularly outrageous pirate.

      The outrage, should be the pricing of Enterprise software, not the" inflated retail price " as some sort of metric of the pirate's activity.

      Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

      In simple economic terms... the high price places their product out of demand.

      By definition, they're worth what the buyer was willing to pay the pirate for the procureent.

      If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

      Not really. While i you are correct about pricing a d demand your conclusions aren't. The software vendors chose to forgo more sales in favor of higher prices; probably figuring the margins were better since there would be fewer users to support and the higher price justified the required level of support. That's their choice and does not mean someone else has the right to pirate and sell at a lower price point. The buyers were simply not target customers despite their desire to have the software.

  • by magic maverick (2615475) on Wednesday June 12, 2013 @05:43AM (#43982995) Homepage Journal

    Let's pretend I host a website that allows you to download hundreds of novels and other works. These are all still under copyright in the USA. But I, and my website, are located in a place where all these works are in the public domain (e.g. Australia, and Russia).
    If I then (perhaps I'm a masochist) visit the USA, can I be arrested and charged? Probably not actually.

    But, if I suddenly allow you to download novels etc. that are not in the public domain in the country I operate in, I suddenly can be charged in the USA? Even though I never visited that country, nor had any dealings there?

    Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Obviously because so many crimes cross international borders. He sold illegal product to US citizens over the internet, and was then dumb enough to make a delivery on US soil. There's no room for outrage here unless you're the kind of edgy guy that thinks anarchy would be cool.

      • Yeah. I am kinda of edgy. I do kinda think that a bit of anarchy and fucking freedom would be sweet. You know, no fucking laws and shit holding us down! Fuck the man!

        Also, we have enough production capability in the world that we could easily be living in a post-scarcity communist society by now. No state, no classes, no government. Just good old fashioned help your neighbor and take only what you need. Don't want to work? Hell if I care, come smoke a joint with me. There's enough to go around even if we al

    • by Grishnakh (216268)

      Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

      Because they want to, and because they can. Why wouldn't they want to do so? If you're allowing US residents to download novels from your Russian website, you're causing the US publishers to lose money. Since the US government is a government by the corporations, and for the corporations, obviously they're going to be very interested in shutting you down.

    • Because they would probably never get prosecuted there, sometimes because there are no laws, other times because there is no effective system to apply the law, (even international law).

      Whilst this tactic is of course open to abuse, and recently has been, it's also good for cases of war crimes etc.

      Anyway, I think you're missing the point here; if you are party to/enable a 'crime' to be committed in a certain country, then they can go after you.
      Seems fair enough. Remember, ignorance of the law is no defense.

    • Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

      Many EU countries have such laws. Your post is mostly anti-US, but many EU countries assert legal authority over actions that never happened in their countries. I hate to resort to Godwin's Law but it does provide a great example. For instance, in the USA it is quite legal to own and sell Nazi memorabilia. Such violates French law. In fact, if it were up to the French they would prevent everybody in the world from doing this. They've sued Ebay in the past and other companies to force them to not show

  • by Wickedpygmy (907341) on Wednesday June 12, 2013 @06:05AM (#43983079)
    Don't travel to U.S territories if you're wanted for U.S crimes.
  • Was this software "worth" $100M in the same way a single MP3 you could buy for $0.99 is "worth" tens of thousands of dollars when it comes to copyright claims?

  • Stop calling it piracy, damn it. Did he sail the high seas then rape and pillage? No, he sold cracked software. It's called "commercial copyright infringement," but that doesn't sound so sexy, does it?

    Every time you call it piracy, you let the corporatists win.

    • Re: (Score:2, Troll)

      by geekoid (135745)

      Piracy is correct. The term goes back 400 years regarding copyright violation. Know the history of what you speak before bitching about it.

      To be clear: In this matter, you are wrong.

  • Hmmm (Score:3, Insightful)

    by Anonymous Coward on Wednesday June 12, 2013 @08:23AM (#43983715)

    100 million for 12 years in prison... Might be worth it...

  • what copyright law is supposed to do.

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