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Internet piracy crackdown leads to arrests, works worth $50 million

WASHINGTON—The Justice Department seized hundreds of computers and arrested four people in an international crackdown on Internet pirates illegally distributing copyrighted video games, software and first-run movies, such as the latest episode of "Star Wars."

Agents executed 90 search warrants in the United States and 10 other countries as part of Operation Site Down. The raids, which began Wednesday, shut down at least eight major online distributors and seized pirated works worth more than $50 million, authorities said.

At a news conference Thursday, Attorney General Alberto Gonzales credited the busts with "striking at the top of the copyright piracy supply chain." Gonzales said the piracy rings are responsible for providing "the vast majority of the illegal digital content now available online."

Online piracy rings are known as "warez," pronounced wares. They function as underground cyberspace co-ops, in which members swap the latest copyrighted material. Warez groups are notoriously difficult to penetrate. Many are based overseas, and users are tech-savvy, communicating in encrypted messages and requiring codes and passwords.

FBI agents infiltrated the secretive community by setting up servers and offering large amounts of computer space for members to store stolen material on, according to court papers filed in U.S. District Court in the Northern District of California.

Pirated material soon poured onto the FBI server, including "Batman Begins," "Bewitched" and "Star Wars Episode III: Revenge of the Sith," which arrived just hours after it opened in movie theaters across the country.

The federal operation targeted "first-providers," or those who provide the copyrighted work to the groups.

Arrested were: William Venya, 34, of Chatworth, Calif.; Chirayu Patel, 23, of Fremont, Calif.; Nate Lovell, 22, of Boulder, Colo.; and David Fish, 24, of Watertown, Conn. Criminal complaints charged each with copyright infringement and conspiracy to commit criminal copyright infringement.

The four have been ordered to appear July 14 before U.S. Magistrate Judge Howard R. Lloyd in San Jose, Calif.

The Motion Picture Association of America praised the arrests, which it said had dismantled some of most prolific and best-known online piracy networks in the world. It cited a Smith Barney study that estimated that the movie industry lost $5.4 billion this year to piracy.

While only four people were arrested, FBI investigators also identified more than 120 leading members of the organized online-piracy network. Authorities said the investigation was ongoing.

Outside the United States, searches took place in Canada, Israel, France, Belgium, Denmark, the Netherlands, the United Kingdom, Germany, Portugal and Australia.

Operation Site Down was the result of three FBI undercover investigations in Charlotte, N.C., Chicago and San Francisco.

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(c) 2005, Knight Ridder/Tribune Information Services.

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