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Man Who Sold $100 Million Worth of Pirated Software Gets 12 Years In Prison

An anonymous reader sends this quote from Bloomberg: "A Chinese national was sentenced to 12 years in a U.S. prison for selling more than $100 million worth of software pirated from American companies, including Agilent Technologies Inc., from his home in China. Li and his wife, of Chengdu, China, were accused of running a website called 'Crack 99' that sold copies of software for which 'access-control mechanisms had been circumvented, the U.S. said in an unsealed 46-count indictment. The pair was charged with distributing more than 500 copyrighted works to more than 300 buyers in the U.S. and overseas from April 2008 to June 2011. The retail value of the products was more than $100 million, the government said. Li is the first Chinese citizen to be 'apprehended and prosecuted in the U.S. for cybercrimes he engaged in entirely from China,' prosecutors said in court filings."

30 of 304 comments (clear)

  1. His mistake is obvious by TrollstonButterbeans · · Score: 5, Funny

    He should have done the transactions in bitcoin.

    --
    Priest: "Universe from nothing, no laws of physics, sped up time"+ huge discrepancies. Creationism? No. Big Bang Theory
  2. Nuber not that impressive by mysidia · · Score: 4, Informative

    500 copyrighted works to more than 300 buyers in the U.S. and overseas

    The retail value of the products was more than $100 million, the government said.

    In other words... on average ~$200,000 per product, and ~$333 thousand per buyer

    This makes sense, when you are talking about companies like Agilent that sell overpriced products, that retail for probably approximately $500,000

    That's why the "pirated $100 million in software" is neither impressive, nor indicating a particularly outrageous pirate.

    The outrage, should be the pricing of Enterprise software, not the" inflated retail price " as some sort of metric of the pirate's activity.

    Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

    In simple economic terms... the high price places their product out of demand.

    By definition, they're worth what the buyer was willing to pay the pirate for the procureent.

    If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

    1. Re:Nuber not that impressive by Pubstar · · Score: 5, Interesting

      If you read TFA, you would have realized that most of the sales were to counties that have US trade embargoes imposed.

    2. Re:Nuber not that impressive by ranulf · · Score: 5, Insightful

      I wanted to make this point, but more so. The guy sold copyrighted material to 300 people. Let's say $100 a pop, which sounds high for someone to fork over for known pirated material. That's $30,000 which is by my reckoning about 4 months salary for the typical person in the US. But this was actually over a 3 year period.

      Piracy is bad, and I don't agree with it, and even more so because my livelihood comes from software development of things that are typical targets of piracy, but the punishment here seems massively out of proportion to the crime. 12 years in prison is in the same ballpark as a murder.

    3. Re:Nuber not that impressive by Registered+Coward+v2 · · Score: 5, Insightful

      500 copyrighted works to more than 300 buyers in the U.S. and overseas

      The retail value of the products was more than $100 million, the government said.

      In other words... on average ~$200,000 per product, and ~$333 thousand per buyer

      This makes sense, when you are talking about companies like Agilent that sell overpriced products, that retail for probably approximately $500,000

      That's why the "pirated $100 million in software" is neither impressive, nor indicating a particularly outrageous pirate.

      The outrage, should be the pricing of Enterprise software, not the" inflated retail price " as some sort of metric of the pirate's activity.

      Obviously, the buyers weren't willing to pay the price the maker wanted to sell the software at. Therefore, those sales by definition were not worth the retail price.

      In simple economic terms... the high price places their product out of demand.

      By definition, they're worth what the buyer was willing to pay the pirate for the procureent.

      If you're selling a $500,000 software product; going after pirates is not a winning business strategy -- it's figuring out, why the heck you can't pitch your product to legal buyers, and make your desired revenue there. Either the pricing is all wrong, or your marketing or product targetting is all wrong.

      Not really. While i you are correct about pricing a d demand your conclusions aren't. The software vendors chose to forgo more sales in favor of higher prices; probably figuring the margins were better since there would be fewer users to support and the higher price justified the required level of support. That's their choice and does not mean someone else has the right to pirate and sell at a lower price point. The buyers were simply not target customers despite their desire to have the software.

      --
      I'm a consultant - I convert gibberish into cash-flow.
    4. Re:Nuber not that impressive by king+neckbeard · · Score: 4, Funny

      So, the Chinese citizen is Prometheus and the US government is Zeus? Didn't they have anything better to do, like turn into swans and rape young women?

      --
      This is my signature. There are many like it, but this one is mine.
  3. Re:Good by Krneki · · Score: 4, Insightful

    Is it ?

    I'm don't know about copyright laws in China, but unless you breach your country law, the US can fuck off.

    --
    Love many, trust a few, do harm to none.
  4. Re:Good by TrollstonButterbeans · · Score: 5, Insightful

    He sold to US buyers establishing jurisdiction. If he did not sell to US buyers and to only -- as an example --- Chinese buyers, US courts would likely not have jurisdiction ....

    .... Although in this "new post-Megaupload Wikileaks kill people with drones NSA monitors all" world maybe the US government has no limits any longer as the US courts no longer are willing to rule that such limits exist.

    --
    Priest: "Universe from nothing, no laws of physics, sped up time"+ huge discrepancies. Creationism? No. Big Bang Theory
  5. Re:Good by ranulf · · Score: 5, Interesting

    He was on US soil, so he can be arrested for actions illegal under US law. This is a fairly common precedent when the law was broken in the US but they have since left. This is newsworthy because the crimes occurred outside the US but he was still considered to have broken US law.

  6. So, an action only in one country is a crime ... by magic+maverick+ · · Score: 4, Insightful

    Let's pretend I host a website that allows you to download hundreds of novels and other works. These are all still under copyright in the USA. But I, and my website, are located in a place where all these works are in the public domain (e.g. Australia, and Russia).
    If I then (perhaps I'm a masochist) visit the USA, can I be arrested and charged? Probably not actually.

    But, if I suddenly allow you to download novels etc. that are not in the public domain in the country I operate in, I suddenly can be charged in the USA? Even though I never visited that country, nor had any dealings there?

    Why the fuck do countries have laws that allow them to prosecute people who are did their criminal activity in another jurisdiction?

    --
    HELP MY ACCOUNT HAS BEEN HACKED BY AN ILLIBERAL ART STUDENT SET TO DESTROY THE INTERWEBZ!
  7. Re:Good by Malc · · Score: 5, Informative

    He went to Saipan where he tried to sell software and data to US agents pretending to be business men. Isn't Saipan US territory? Perhaps you should try RTFA before sounding of like a dickhead.

  8. Re:Good by xelah · · Score: 5, Interesting

    An interesting parallel would be people in the US who allow seditious comments harmful to public order in China (or so they'll say) to be posted on their websites, which are then accessed by Chinese people. Will China now feel a whole lot happier about arresting Americans for this should they go anywhere where China has enough influence, or have their flights diverted? Or, indeed, just accuse Americans of stuff to keep them out or stop them selling stuff there.

  9. Moral of the story... by Wickedpygmy · · Score: 5, Informative

    Don't travel to U.S territories if you're wanted for U.S crimes.

  10. Re:Good by Anonymous Coward · · Score: 4, Interesting

    So if I sell to Chinese buyers I'm bound by Chinese law? You don't see how that might be a very bad thing?

    Can't have it both ways. If Chinese citizens are bound by US law then US citizens must be bound by Chinese law. For China to agree to extradite without tit for tat would make them very stupid.

  11. Re:Good by mrbester · · Score: 4, Interesting

    I like how he got less than someone who *doesn't* sell what they pirate can get. There's a lesson there...

    --
    "Wait. Something's happening. It's opening up! My God, it's full of apricots!"
  12. Re:Good by bloodhawk · · Score: 5, Informative

    If you are trading with chinese citizens on chinese soil then then yes you are bound by chinese laws for those dealings, actually in most circumstances you are bound by the laws of both countries. It is one of the reasons many of the big multinationals need so many friggen lawyers as every countries laws are slightly different and they are regularly bound by multiple countries laws when trading and selling goods.

  13. Re:It is, however, definitely appropriate. by stanIyb · · Score: 4, Insightful

    If you made $100M (really that, not RIAA funny-math $100M, mind) then that is $100M that the original owners could have made.

    Except when you consider that the prices official sources charge are usually much more. People most likely bought software from him because he was selling it at a cheaper price. Would they have bought it otherwise? Who knows? But why should we assume they would have?

  14. Re:Good by Anonymous Coward · · Score: 5, Insightful

    I really have trouble understanding your mindset and others like you that believe it is A-OK for someone to illegally acquire commercial software (or movies or music or books) and sell it. These "resellers" are not taking expensive software and giving it away in the spirit of communal sharing, they are taking that software and selling it to make a profit for themselves. They made no contributions to the development of the software, they have no stake in the company that hires staff and takes financial risk to produce said software. These people are parasites. It is disheartening that you believe it is worthwhile to defend them.

    I defend them when the accusers claim that their retail value is $200,000 dollars a copy and the penalty for copying some CDs is 12 years. Rapists and murderers rarely get 12 years. If you can't see that the motivation behind this is pure greed - as opposed to actual justice - then I pity you.

  15. Re:Good by julesh · · Score: 4, Informative

    Depends where the servers were located, if they were in China, then the only one to blame are the US citizens that bought the goods.

    It's the same if you go to a foreign country and buy drugs not allowed in your country. The seller there can't be persecuted.

    Your argument makes good logical sense. Unfortunately, it is not the approach courts have taken to deciding questions of this kind. The courts have instead asked where the was customer when he made the purchase, and used this as the basis of deciding what laws apply to the sale. The original reason for this was to make things easier for consumers, who shouldn't be expected to have to know the laws of the countries of sellers they deal with (particularly as they may not even have any way of knowing where the seller is), but it has been extended since then into areas where this justification makes no sense.

  16. Re:Good by pantaril · · Score: 4, Funny

    You don't know the meaning of the word "entrap", you stupid fuck.

    And you obviously lack few slaps from your parents which would tech you good manners.

  17. Re:Good by loonycyborg · · Score: 4, Interesting

    Really? 12 years in prison just for possibly decreasing someone's profits? That's definitely cruel and unusual punishment.Such terms should be reserved for murderers and what-not.

  18. Re:Good by Anonymous Coward · · Score: 4, Informative

    Not entirely correct. Your description matches one of two tests, but is narrower.

    from Wiki

    Two competing tests exist for determining whether entrapment has taken place, known as the "subjective" and "objective" tests. The "subjective" test looks at the defendant's state of mind; entrapment can be claimed if the defendant had no "predisposition" to commit the crime. The "objective" test looks instead at the government's conduct; entrapment occurs when the actions of government officers would have caused a normally law-abiding person to commit a crime.

    A non-uniformed government agent can indeed entrap someone. Asking if you'll sell them pot isn't entrapment. Haranguing them until the finally agree to sell you pot is.

  19. Re:Good by Savage-Rabbit · · Score: 5, Insightful

    I really have trouble understanding your mindset and others like you that believe it is A-OK for someone to illegally acquire commercial software (or movies or music or books) and sell it. These "resellers" are not taking expensive software and giving it away in the spirit of communal sharing, they are taking that software and selling it to make a profit for themselves. They made no contributions to the development of the software, they have no stake in the company that hires staff and takes financial risk to produce said software. These people are parasites. It is disheartening that you believe it is worthwhile to defend them.

    I defend them when the accusers claim that their retail value is $200,000 dollars a copy and the penalty for copying some CDs is 12 years. Rapists and murderers rarely get 12 years. If you can't see that the motivation behind this is pure greed - as opposed to actual justice - then I pity you.

    That price tag has less to do with any real belief that a CD is worth 200 grand a copy and a lot more to do with the unshakable American belief in the effectiveness of the brand of 'come down on them like a ton-o-bricks' justice that has filled your jails with hoards of people doing rediculously long mandatory minimum sentences for things that are misdemeanours in most other countries.

    --
    Only to idiots, are orders laws.
    -- Henning von Tresckow
  20. Re:Good by L4t3r4lu5 · · Score: 5, Funny

    They can damn well try! I'm behind seven proxi###&4%f2a664#NO CARRIER

    --
    Finally had enough. Come see us over at https://soylentnews.org/
  21. Re:Good by Sponge+Bath · · Score: 4, Funny

    ...and then there were no remaining AOL users.

  22. Re:Good by devman · · Score: 5, Informative

    This happened in Thailand not to long ago. Some dude (from the UK I believe) made fun of the king of thailand on his blog, went on vacation to Thailand months later and was arrested for it.

  23. Re:Good by 1s44c · · Score: 4, Informative

    I think with all the drone strikes in the world you would realize the US has jurisdiction where ever it fucking feels like.

    The US has less legal constants outside the US than inside it. The US can imprison, torture, or kill without legal comeback in most of the world, but can't even detain people without trail in the US. That's the reason Gitmo is in Cuba not Texas.

  24. Re:Good by Known+Nutter · · Score: 4, Insightful

    NO CARRIER

    It won't be too much longer now before there is no one left who gets this joke.

    --
    Beware of the Leopard.
  25. Re:Good by dcollins · · Score: 4, Informative

    "The US... can't even detain people without trail in the US."

    NDAA-2013, signed into law the first of this year, says otherwise.

    http://www.huffingtonpost.com/2013/01/03/ndaa-obama-indefinite-detention_n_2402601.html

    --
    We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
  26. Read the article.... by FilmedInNoir · · Score: 4, Informative

    He was arrested in June 2011 by U.S. agents when they lured him to a meeting in Saipan where he believed he was delivering 20 gigabytes of data to the representatives of U.S. businessmen. Saipan, an island in the middle of the Pacific Ocean, is part of the Commonwealth of the Northern Mariana Islands and like the Atlantic island of Puerto Rico is a commonwealth of the U.S., giving American authorities jurisdiction.
    No Navy Seals or government conspiracies, just an old fashioned luring operation.

    --
    Sig. Sig. Sputnik