Headline Archives

Six Indicted in $50 Million CD Counterfeiting Operation


Protecting Intellectual Property GraphicIt's an age-old crime--stealing. But it’s not about picking a pocket or holding up a bank. It's robbing people of their ideas, ingenuity, and creative expressions—what’s called intellectual property, or IP.

What does IP include? Things like music, movies, books, software, video games, even designer clothes and perfume.

How important is IP to our economy? Consider this: IP is the single largest sector of the American economy, accounting for nearly 5% of the country's GDP, according to the International Intellectual Property Alliance. The U.S. leads the world in creating and exporting IP and IP-related products.

How big is the IP piracy problem? Big, and getting bigger all the time, thanks to electronic technologies like broadband, CD/DVD burners, MP3 recorders, and P2P digital file swapping networks on the Internet. And to add to the challenge, much of the theft takes place overseas, where laws are often lax and enforcement more difficult.

All told, IP theft costs U.S. businesses upwards of $250 billion a year. And it robs the nation of hundreds of thousands of jobs and as much as a billion dollars a year in lost tax revenues.

That’s why the FBI, an international organization with agents stationed around the world, takes its responsibility to protect intellectual property very seriously.

Case in point, literally. Recently, the FBI teamed with several Metro Atlanta Police Departments to shut down what has been called the largest counterfeit and pirated music CD operation in the southeast U.S. and the largest such ring ever broken up by law enforcement.

Six defendants, arrested in October, have been charged with churning out 60,000 illegal CDs a week—well over 3 million in all. Who got burned? Some of the biggest recording artists around, including Britney Spears, Santana, Lenny Kravitz, Pink, and the Beastie Boys.

Headquartered in Atlanta, the operation allegedly included nine production plants, seven label production plants, a business office, and three storefronts in Macon and the Atlanta metro area. Once manufactured and packaged, the CDs were sold in bulk to wholesalers/dealers for $2 each and then sold to the public for around $5 at flea markets and other retail locations. The total cost of the illegal CDs: about $50 million.

You can help. To report an IP violation or theft, contact the National Intellectual Property Rights Coordination Center, an interagency clearinghouse for combating IP crime run jointly by the FBI and Immigration and Customs Enforcement. You can fill out a complaint online at www.ice.gov/graphics/enforce/ipr/iprform.htm or call (202) 927-0810.

For more information: See the FBI's Intellectual Property Crimes website and the DOJ press release on the CD bootlegging investigation.