A federal grand jury indicted three San Francisco-area men Wednesday for
their involvement in what the music industry calls the largest illegal CD
manufacturing seizure in the United States.
The indictments follow the arrests of five individuals and searches of 13
locations in California and Texas on Oct. 6 as part of the Department of
Justice’s (DoJ) “Operation Remaster.” The campaign targeted the large-scale
suppliers of pirated copyrighted music, software and movies.
Operation Remaster primarily focused on replicators, the companies or
individuals who use sophisticated machinery to create hundreds of thousands
of copies of copyrighted works that are then distributed around the country.
Ye Teng Wen (a.k.a. Michael Wen, 29) of Union City, Hao He (a.k.a. Kevin
He, 30) of Union City, and Yaobin Zhai (a.k.a. Ben Zhai, 33) of Fremont
were charged in two separate indictments with conspiracy to commit criminal
copyright infringement and traffic in counterfeit labels, criminal copyright
infringement, trafficking in counterfeit labels and aiding and abetting
counterfeiting.
Wen and He were charged in a 10-count indictment. Zhai was charged
separately in a seven-count indictment.
Zhai was released Wednesday on a $150,000 secured bond. Wen and He were
released on Oct. 6 on $75,000 secured bonds. Their next court appearance
is set for Oct. 27.
“These individuals are charged with affixing counterfeit labels on CDs to
create the appearance of legitimacy, including the FBI Anti-Piracy Warning
that stated ‘Unauthorized copying is punishable under federal law,'” U.S.
Attorney Kevin V. Ryan said in a statement.
According to court filings, music and software piracy conspiracies usually
involve geographically separate businesses that secretly handle different
stages of the process of pirating intellectual property. The chain involves
brokers, replicators, assemblers, packagers, printers, distributors and
retailers.
Brokers solicit the orders, while replicators have the equipment to
manufacture hundreds of thousands of CDs. Printers and packagers make the
infringed work appear legitimate by assembling the CD case, booklet and
artwork into a completed CD/DVD package that closely resembles the
copyrighted work.
According to DoJ affidavits, Wen and He have been involved in large-scale
replication of pirated music and software, including songs by numerous Latin
artists, as well as anti-virus software manufactured by Symantec.
Similarly, Zhai has been involved in large-scale replication of pirated
Latin music. All the counterfeited works at issue are copyrighted in the
United States.
Replicators use machines to reproduce the CDs. The Recording Industry
Association of America (RIAA) estimated one stamping machine has an
approximate value of $25,000.
Wen, He and Zhai are charged with using more
than 2,000 stampers with an estimated potential replicating value of
millions of dollars.
“The allegations of massive piracy of music and software reflect the
potential loss of millions of dollars to the artists and businesses who
legitimately own the copyrights on these works,” Ryan said. “We will
continue in our work to protect intellectual property rights and prosecute
those who pirate music, software and movies for their own enrichment.”
