Intellectual Property News

First Guilty Pleas By Members Of Pre-Release Music Groups From Operation FastLink

WASHINGTON, D.C.— The first guilty pleas involving members of pre-release music piracy groups from Operation FastLink, a major Department of Justice initiative against online piracy worldwide, were announced today by Assistant Attorney General Alice S. Fisher of the U.S. Justice Department’s Criminal Division and U.S. Attorney Paul J. McNulty of the Eastern District of Virginia. Derek A. Borchardt, age 21, of Charlotte, North Carolina; Matthew B. Howard, age 24, of Longmont, Colorado; and Aaron O. Jones, age 31, of Hillsboro, Oregon, each pled guilty today to one count of conspiracy to commit copyright infringement for their involvement in the pre-release music group “Apocalypse Crew” or “APC.” George S. Hayes, age 31, of Danville, Virginia, previously pled guilty to one count of criminal copyright infringement related to his involvement in another pre-release music group called “Chromance” or “CHR.” The three conspiracy pleas were entered before United States District Judge Claude M. Hilton this morning. Sentencing for the three co-conspirators is scheduled for May 19, 2006 at 9:00 AM. The fourth plea of George Hayes was previously entered before United States District Judge Leonie M. Brinkema on February 13, 2006. Sentencing for Hayes is scheduled for May 19, 2006 at 10:00 AM. Each of the four defendants face up to five years of imprisonment, a fine of $250,000, and three years of supervised release.

These are the first federal criminal convictions of members of pre-release music groups from Operation FastLink, an ongoing federal crackdown against the organized piracy groups responsible for most of the initial illegal distribution of copyrighted movies, software, games and music on the Internet. Operation FastLink has resulted, to date, in more than 120 search warrants executed in 12 countries; the confiscation of hundreds of computers and illegal online distribution hubs; and the removal of more than 50 million dollars worth of illegally-copied copyrighted software, games, movies, and music from illicit distribution channels. As of today, Operation FastLink has yielded felony convictions for 27 individuals. Operation FastLink is the culmination of multiple FBI undercover investigations including an investigation into pre-release music groups led by FBI agents from the Washington Field Office (WFO). These are the first convictions to arise from the FBI-WFO investigation. “By stealing the creative product of talented people, this form of piracy deprives artists of the rewards they deserve,” said U.S. Attorney McNulty. “If left unchecked, such crime would drain the incentive to create that enriches our lives.” The defendants convicted today were leading members of pre-release music groups. As detailed in the statements of facts filed with the four plea agreements, these individuals were active members of pre-release groups; that is, groups that acted as "first-providers" of copyrighted works to the Internet – the so-called "release" groups that are the original sources for a majority of the pirated works distributed and downloaded via the Internet.

As leading members of the pre-release music groups Apocalypse Crew and Chromance, these defendants sought to acquire digital copies of songs and albums before their commercial release in the United States. The supply of pre-release music was often provided by music industry insiders, such as radio DJs, employees of music magazine publishers, or workers at compact disc manufacturing plants and retailers, who frequently receive advance copies of music prior to its commercial release. Once a group prepared a stolen work for distribution, the material was distributed in minutes to secure computer servers throughout the world. From there, within a matter of hours, the pirated works are distributed globally, filtering down to peer-to-peer and other public file sharing networks accessible to anyone with Internet access and potentially appearing for sale around the world.The Recording Industry Association of America (“RIAA”) and several of its member companies provided substantial assistance to the FBI in its investigation of the pre-release music scene. RIAA is the trade group that represents the U.S. recording industry; RIAA members create, manufacture, and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.Jay V. Prabhu, trial attorney for the U.S. Justice Department’s Computer Crime and Intellectual Property Section and currently a Special Assistant U.S. Attorney in the Eastern District of Virginia, prosecuted the case on behalf of the government.

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