"This group is one of the oldest and most sophisticated networks of software pirates anywhere in the world," Mr. Lassar said, adding that "these defendants are accused of illegally reproducing copyrighted software and distributing it over the Internet."  According to the complaint filed against Rothberg in February, previous software piracy investigations that have focused on smaller sites have turned up numerous copyrighted software files bearing annotations reflecting that the files were supplied to the sites through PWA.

"This is the most significant investigation of copyright infringement involving the use of the Internet conducted to date by the FBI," said Ms. McChesney.  "It demonstrates the FBI's ability to successfully investigate very sophisticated on-line criminal activity."

All 17 defendants were charged with one count of conspiracy to infringe copyrights.  Rothberg has been free on bond since he was arrested Feb. 3.  He and the other defendants will be summoned to appear for arraignment in U.S. District Court in Chicago.  A complete list of defendants is attached.

In July 1999, the Justice Department announced the establishment of a law enforcement initiative aimed at combating the growing challenge of piracy and counterfeiting of intellectual property, both domestically and abroad.  "Prosecuting intellectual property crime is a serious priority at the Justice Department and this case and others like it across the country show that our efforts are working," said James K. Robinson, Assistant Attorney General for the Criminal Division.
 
According to the indictment, the PWA members held various designations within the organization and were promoted based on their contributions to the group's unlawful objectives.  Many members of the organization devoted substantial time and resources to PWA activities.  As part of the alleged conspiracy, PWA members and leaders communicated with each other in real time on private Internet Relay Chat (IRC) channels known as "#tude" and "#pwa."

PWA allegedly maintained numerous File Transfer Protocol (FTP) sites configured for the transfer of software files and stored libraries of pirated software on each of these sites.  The FTP site known as "Sentinel" was PWA's longest-running site, from late 1995 until January 2000, and was one of its first sites on the Internet.  According to the previously filed complaint, FBI agents in Chicago identified "Sentinel," also known as a "WAREZ" site, which is an Internet site that distributes pirated software.  The site was not accessible to the general public, but instead was configured  so that it was accessible only to authorized users entering through known Internet Protocol addresses.

Rothberg allegedly controlled access to Sentinel and, while it was operating, he instructed two individuals to add more than 100 users to the site.  Those individuals, identified as Person A and Person B, were affiliated with the University of Sherbrooke in Sherbrooke, Quebec, where the hardware supporting the Sentinel site was located.  Persons A and B became involved with PWA after meeting Rothberg on IRC in 1995 and participated in the conspiracy until March 1999, when they began cooperating with law enforcement authorities, according to the indictment.  On Jan. 13, the FBI and Canadian authorities took possession of the computer that supported the Sentinel site.
 
As part of the conspiracy, each defendant had access to an active account on Sentinel.  To maintain access, members had to "upload," or provide files, including copyrighted software files obtained from other sources and, in turn, were permitted to "download," or copy files provided by other users.  At various times between January 1998 and January 2000, the indictment alleges, more than 5,000 copyrighted computer software programs were available for downloading on the site, in violation of copyrights.  The programs included operating systems, utilities, applications such as word processing and data analysis programs, and games and MP3 music files, including, for example, programs published by Microsoft, Adobe, Norton, Oracle, IBM, Lotus and Novell.  While Sentinel was operating, more than 1,200 gigabytes of software were uploaded and more than 4,300 gigabytes were downloaded.

The indictment alleges that PWA's members were assigned specific roles, including, for example, "crackers," who stripped away the copy protection that often is embedded in commercially-released software; "couriers," who transferred software to PWA, "packagers," who tested and prepared programs for release by couriers, and "suppliers" who funneled programs from major software companies to the group.  One defendant, Justin Robbins, of Charlotte, N.C., was an employee of Microsoft Corp., and allegedly supplied Microsoft programs to PWA and the Sentinel site.  Robbins also allegedly allowed Rothberg access to Microsoft's internal network, using Robbins' identification and password.

Also as part of the conspiracy, the indictment alleges that defendants Brian Riley, Tyrone  Augustine, Brian Boyanovsky and John Geissberger, all Intel Corp. employees, arranged in December 1998 to supply hardware for the operation of Sentinel.  At that time, Sentinel's storage capacity was limited and Boyanovsky allegedly told Rothberg that he could provide substantial storage capacity for a piracy site.  Rothberg, Boyanovsky, Riley and Augustine allegedly agreed that Intel employees would be given access to the software available on Sentinel in exchange for sending Intel hardware to the site operators in Canada to expand Sentinel's storage capacity.  Without Intel's knowledge or consent, Augustine allegedly assembled the hardware and shipped it in December 1998, at Intel's expense, to Canada, and Geissberger allegedly assisted with clearing the shipment through Canadian customs.  Once Sentinel was operating with its expanded storage capacity, the Intel defendants obtained accounts that allowed them to access pirated software and defendant Gene Tacy allegedly configured and servers within Intel to make the software available to other employees.

Mr. Lassar and Ms. McChesney commended the cooperation of the Canadian government, the Royal Canadian Mounted Police, and the University of Sherbrooke.  The government is being represented by Assistant U.S. Attorney Lisa Griffin.

If convicted, conspiracy to infringe a copyright carries a maximum penalty of five years in prison and a $250,000 fine, or, as an alternative, the Court may impose a fine totaling twice the gross gain to any defendant or twice the gross loss to any victim, whichever is greater.  Restitution is mandatory.  The Court, however, would determine the appropriate sentence to be imposed under the United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.