A federal grand jury Thursday indicted three individuals in conjunction with two simultaneous actions involving 13 locations in California and Texas where individuals were involved in a network that was illegally manufacturing and distributing millions of pirated CDs and DVDs.
More than 500,000 CDs and over one million CD inserts were seized, along with thousands of DVDs and 3,300 'stampers' - the metal discs used to press multiple copies, making this combined operation the largest manufacturing raid in U.S. history.
"As a result of close cooperation at all levels, law enforcement agencies have successfully toppled a highly sophisticated pirate network capable of generating millions of dollars in illegal proceeds " a network all too typical of today's music piracy trade," said Mitch Bainwol, Chairman and CEO of the Recording Industry of America (RIAA).
Operations "Remaster" and "Buccaneer" were the result of joint efforts by the Rapid Enforcement Allied Computer Team (a task force administered by the Santa Clara County District Attorney's Office), the Federal Bureau of Investigation, the Sacramento Valley High Tech Task Force, the U.S. Secret Service, the RIAA and the MPAA. As part of these operations, raids were conducted on October 6th at several large-scale commercial mastering, replicating and packaging facilities in the Bay Area and Central Valley of California and in Austin, Texas.
Approximately 85 percent of the counterfeit CDs seized in these operations were of the Latin genre.
In addition, the Los Angeles Police Department's Organized Crime Vice Division (OCVD) yesterday executed a search warrant on two locations in Los Angeles County supplied by the facilities raided in Operations "Remaster" and "Buccaneer." In this action, 20,655 replicated CDs were seized from a telemarketing company offering counterfeit CDs to numerous Latin retailers and a connected storage facility.
A federal interagency report published in 2004 estimated that counterfeit and pirated goods, including those of copyrighted works, cost the American economy $250 billion a year. The MPAA estimates its member companies lost $3.5 billion last year due to piracy of hard goods alone, not including losses on the Internet. Working with law enforcement around the world, the MPAA seized more than 76 million illegal optical discs in 2004.
In 2004, the RIAA reported a 58 percent increase in U.S. seizure of counterfeit CDs, the authentic CD look-alikes with high-quality artwork and packaging that make the product appear legitimate. Working together, local law enforcement agencies and RIAA investigators seized 1.2 million counterfeit discs in the U.S. in 2004.