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Chinese residents charged with selling $100M worth of pirated software

The defendants operated websites selling pirated software at discount prices, the indictment alleges

A U.S. grand jury has charged two residents of China with 46 criminal counts, including infringing software copyrights and illegally exporting technology to China, for allegedly operating a website that sold pirated software with a commercial value of more than US$100 million.

Xiang Li, 35, and Chun Yan Li, 33, of Chengdu, China, are accused of operating websites, including Crack99.com, that sold allegedly pirated copies of software. The two defendants sold pirated products from 150 software companies between April 2008 and June 2011, according to the U.S. Immigration and Customs Enforcement's Homeland Security Investigations (HSI).

Xiang Li was arrested by HSI agents in June in Saipan, Northern Mariana Islands. Chun Yan Li remains at large. The defendants face charges in U.S. District Court for the District of Delaware.

In a related case, a former employee of NASA has pleaded guilty to conspiracy to commit criminal copyright infringement, HSI said in a press release. Cosburn Wedderburn, 38, of Windsor Mill, Maryland, purchased pirated software worth more than $1 million from Xiang Li, the agency said. Wedderburn faces up to five years in prison and a $250,000 fine, or twice the loss from this case.

Xiang Li "believed he could commit these crimes without being held accountable for his actions," ICE Director John Morton said in a statement. "Li thought he was safe from the long arm of U.S. law enforcement, hiding half way around the world in cyberspace anonymity. He was sorely mistaken."

Xiang Li's lawyer wasn't immediately available for a comment on the charges.

Crack99.com and other websites allegedly operated by the defendants sold pirated copies of software in which the access control mechanisms had been cracked, or circumvented, HSI said.

The websites advertised more 2,000 cracked software products for sale at deep discounts from their retail prices, HSI said. The advertised pirated software, most of which was developed by U.S. companies, is used in several fields, including engineering, manufacturing, space exploration, aerospace simulation and design, mathematics and storm water management, HSI said.

The prices listed for the pirated software on the websites range from $20 to $1,200, while the retail value of these products ranged from several hundred dollars to over $1 million dollars.

The indictment charges that between April 2008 and June 2011, Xiang Li distributed more 500 pirated copyrighted works to about 325 customers across the U.S. and in 60 foreign countries.

Xiang Li faces up to 20 years in federal prison and a $500,000 fine, or twice the loss from this case, per charge.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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