China, FBI Bust Pirate Software Gangs

The FBI and Chinese police busted two software piracy gangs and seized programs worth an estimated $500 million, officials said Tuesday.

Police arrested 25 people in the joint campaign that started in 2005, seizing 360,000 programs and property valued at $7.9 million, said Gao Feng, an official with the Ministry of Public Security.

The FBI's Los Angeles field office estimated the seized software's retail value to be $500 million. The gangs allegedly operated from Shanghai and Shenzhen, and targeted programs from Microsoft Corp. and Symantec Corp.

China has long been the world's leading source of illegally copied goods, including designer clothes, movies and music. It has been under pressure for years to crack down, and that's only grown in advance of next year's Summer Olympics in Beijing.

Gao said police discovered in 2005 that the Chinese gangs were colluding with suspects in the United States and notified the FBI's Beijing office.

The FBI Los Angeles office found that at least two Chinese men from Shenzhen were suspected of producing and selling pirated software in the United States, Gao said.

The FBI statement said it is believed that 70 percent of the pirated software was sold to the United States, with the rest going to other countries, including Canada, Australia and Britain.

"The majority of Chinese-based distributors advertised their products aggressively and recruited distributors via the Internet," the FBI said.

The statement said the suspects were in custody and had been charged with copyright violations.

Microsoft applauded the campaign.

"This case should serve as a wake-up call to counterfeiters," said Brad Smith, Microsoft's general counsel. "Customers around the world are turning you in, governments and law enforcement have had enough, and private companies will act decisively to protect intellectual property."