February 25, 2008

DVD pirate sentenced following ICE investigation
ICE agents and Chinese authorities use "Operation Spring" to nab DVD pirate

HATTIESBURG, Miss. - A local DVD pirate was sentenced here Friday to 48 months incarceration, three years supervised release, and ordered to repay restitution to the Motion Picture Association of America in the amount of $878,793 following an undercover U.S. Immigration and Customs Enforcement (ICE) investigation worked jointly with Chinese authorities.

Thomas Irving Davis Jr., a co-conspirator of Randolph Hobson Guthrie III, was identified as a result of a lengthy investigation that was the first joint Intellectual Property Rights (IPR) investigation by ICE agents and Chinese authorities, and the very first joint Sino-American undercover investigation.

The restitution to the Motion Picture Association of America is to be repaid jointly with Davis' co-conspirator.

Davis admitted his role in a wide-ranging conspiracy that involved the commission of various offenses against the United States, including infringing on copyrights for purposes of commercial advantage and private financial gain, trafficking in goods and using counterfeit marks on and in connection with such goods, and fraudulently and knowingly importing unauthorized reproductions of U.S. copyrighted motion pictures stored on digital versatile discs into the United States contrary to law.

The investigation began in Mississippi when undercover ICE agents purchased counterfeit DVDs with significant contributions having been made by Chinese authorities. The investigation has already led to the conviction in China of a global distributor of counterfeit products.

"This landmark case represents the latest success of ICE in targeting IPR violators around the globe," said Michael A. Holt, special agent-in-charge of the ICE Office of Investigations in New Orleans. "As the largest investigative arm of the Department of Homeland Security, ICE plays a leading role in targeting criminal organizations responsible for producing, smuggling, and distributing counterfeit products."

U.S. Attorney Dunn Lampton said, "What began with counterfeit DVDs being sold at a Harrison County Flea Market resulted in not only the first joint Intellectual Property Rights investigation between the U.S. and China, but also the first full undercover law enforcement investigation between the U.S. and Peoples Republic of China. This investigation and prosecution demonstrates what cooperation between law enforcement agencies in the United States and China can achieve in order to counter the enormous adverse economic consequences to the United States of intellectual property drain in China and around the globe."

"The sentence handed down today sends a clear message that our legal system has no tolerance for rampant copyright theft and that those engaged in these illegal activities will be prosecuted to the fullest extent of the law," said Dan Glickman, chairman and CEO of the Motion Picture Association of America. "We applaud the U.S. Attorney for the Southern District of Mississippi, U.S. Immigration and Customs Enforcement and the Chinese authorities for their diligent and sustained efforts over the last three years to break-up this far-reaching conspiracy."

The indictment in this case was the product of a joint effort between ICE agents and Chinese law enforcement called "Operation Spring." Launched in Sept. 2003 by the ICE Resident Agent-in-Charge office in Gulfport, Mississippi, the investigation grew to include the ICE Attaché in Beijing, China, the ICE Special Agent-in-Charge office in Houston, the National Intellectual Property Rights Center, and the Internal Revenue Service, Criminal Investigations.

In April 2004, agents assigned to the ICE Attaché in Beijing reached out to Chinese authorities and began sharing information on the investigation. The Economic Crime Investigation Department of the Chinese MPS assigned the Shanghai Public Security bureau to work with ICE on the case. After months of joint investigation with ICE, Chinese authorities were able to develop sufficient evidence against Randolph Hobson Guthrie III to make an arrest.

On July 1, 2004, officers from the Economic Crime Investigation Department of the Chinese MPS and the Shanghai Public Security Bureau carried out enforcement actions in China that resulted in the arrest of six individuals, including two U.S. citizens, one being Guthrie. Guthrie had lived in Shanghai for nearly ten years and also listed addresses in New York, Miami Beach and Palm Beach, Fla.

In addition, the enforcement actions in China led to the seizure of more than 210,000 counterfeit motion picture DVDs and approximately $67,000 in U.S. currency as well as 222,000 in Chinese Renminibi (RNB) currency. Chinese authorities also located and destroyed three warehouses that were being used to store counterfeit motion picture DVDs for distribution around the globe, including the United States.

According to facts presented at Thomas Davis' guilty plea hearing, he participated in the conspiracy by establishing or assisting in the establishment of various accounts on web-based services such as WorldPay and Ebay to facilitate the sale of pirated DVDs. Davis additionally traveled within the state of Florida delivering pirated DVDs and accepting payments from customers. During the conspiracy, Davis collected more than $50,000 in payments for the pirated DVDs operating out of an office located at 240 Worth Ave., Palm Beach, Fla.

U.S. Attorney Lampton expressed his appreciation to Assistant U.S. Attorney Jay Golden, ICE Resident Agent-in-Charge Steve Thomas, who has since become the ICE attaché in Beijing, case agent Alan Prejean, and ICE undercover agents for their dedicated efforts. He also thanked officials of the U.S. Department of State and ICE Intellectual Property National Program Coordinator Nancy Sherman of the National Intellectual Property Rights Center in Washington, D.C.

ICE investigations in FY 2007 resulted in 241 arrests, 149 indictments, and 134 criminal convictions on intellectual property rights violations.

-- ICE --

U.S. Immigration and Customs Enforcement (ICE) was established in March 2003 as the largest investigative arm of the Department of Homeland Security. ICE is comprised of five integrated divisions that form a 21st century law enforcement agency with broad responsibilities for a number of key homeland security priorities.

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