Man pleads guilty to selling $100 million worth of pirated software

The Chinese man and his partner sold cracked software on their websites
  • (IDG News Service)
  • — 08 January, 2013 16:44

A Chinese man has pleaded guilty in a U.S. court to selling pirated software used in defense, space and other industries with a retail value of more than US$100 million.

Xiang Li, 36, and a partner sold cracked copies of software from more than 150 vendors on websites including Crack99.com and Cad100.com between April 2008 and November 2010, according to court documents from the U.S. District Court for the District of Delaware. Many of the software packages they sold had retail values of $10,000 or more.

The software packages Li sold are used in defense, engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, and explosive simulation, U.S. Immigration and Customs Enforcement (ICE) said in a press release.

Li, of Chengdu, China, has agreed to plead guilty to one count of conspiracy to commit copyright infringement and one count of conspiracy to commit wire fraud, the U.S. Department of Justice and ICE announced Tuesday. Officials called the case "one of the most significant" copyright cases ever uncovered by ICE's Homeland Security Investigations unit.

"Li mistakenly thought he was safe from the long arm of HSI, hiding halfway around the world in cyberspace anonymity," ICE Director John Morton said in a statement. "Fast forward to today, where he is now being held accountable in Delaware for illegally stealing, distributing and ultimately exploiting American ingenuity and creativity at a loss of at least $100 million to U.S. companies."

Li and his partner sold software packages for between $20 and $1,200, while the retail value of some of the software packages was up to $1 million, according to court documents. In two and a half years, the two sold about 500 software packages to customers in the U.S. and about 60 other countries, the court documents said.

Through emails sent to customers, Li described himself as being part of "an international organization created to crack" software, ICE said in a press release.

Li sold 12 cracked software programs worth over $1.2 million to Cosburn Wedderburn, who was then a NASA electronics engineer working at NASA's Goddard Space Flight Center in Maryland, ICE said. Li also sold 10 cracked software programs worth over $600,000 to Wronald Best, who was chief scientist at a Kentucky-based government contractor selling microwave technology, vacuum tubes and other products used in military equipment.

Both Wedderburn and Best have pleaded guilty to conspiracy to commit criminal copyright infringement and are awaiting sentencing in Delaware, ICE said.

Li and his partner made about $60,000 from the sale of the pirated software, court documents said.

Between January 2010 and June 2011, undercover ICE special agents purchased hundreds of thousands of dollars worth of software from Crack99.com, ICE said. The investigation led to a face-to-face meeting between Li and undercover agents on the island of Saipan in June 2011. Li agreed to travel from China to Saipan to deliver pirated software, design packaging and 20GBs of proprietary data from a U.S. software company to undercover agents posing as U.S. businessmen, ICE said.

Li was indicted in Delaware in November 2010.

The criminal copyright infringement charge has a maximum penalty of five years in prison, a $250,000 fine, or twice the gain or loss from the criminal act. The wire fraud charge has a maximum penalty of 20 years in prison and a $250,000 fine.

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Grant Gross

IDG News Service
Topics: U.S. Department of Justice, Wronald Best, John Morton, copyright, intellectual property, legal, Xiang Li, Cosburn Wedderburn, U.S. Immigration and Customs Enforcemen, Criminal, U.S. District Court for the District of Delaware
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