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Chinese national pleads guilty to role in $100 million software piracy scheme

08 January 2013

Xiang Li yesterday pleaded guilty to two federal charges relating to the sale of ‘cracked’ sophisticated software sometimes at less than 1/1000th of its retail price. Sentencing is scheduled for May 3.

Xiang Li operated websites such as crack99, cad100 and dongle-crack-download from where high end software could be purchased for low end prices. “The prices listed for these software products on the Subject Websites,” says the indictment, “ranged from $20 to $1,200.  The actual retail value of these products ranged from several hundred dollars to over one million dollars.”

The software on sale was typical of that used in “engineering, manufacturing, space exploration, aerospace simulation and design, mathematics, storm water management, explosive simulation, and manufacturing plant design,” and numbered up to 2000 different products. In each case the license and access control features had been circumvented.

The Immigration and Customs Enforcement (ICE) agency of the DHS started investigating after an unnamed US manufacturer spotted its software for sale on crack99.com. Agents started undercover investigation in early 2010, and made numerous purchases from Xiang Li’s sites. The agents developed a sting operation that would involve them ‘distributing’ Xiang Li’s pirated software in the US. In June 2011, Xiang Li met with ICE agents in Saipan, a US territory in the Pacific Mariana Islands. 

“The purpose of the meeting,” says the indictment, “was for Defendant XIANG LI to transfer the pirated software, design packaging and STK software and proprietary data paid for by the undercover agent in January 2011.” Once on US territory he was arrested. This is the first time a suspect has been successfully lured out of China and arrested.

Li was originally charged on 46 counts. On Monday he pleaded guilty to single counts of conspiracy to commit criminal copyright violations and wire fraud. “Video from the undercover meeting in Saipan, filed as evidence in court, is expected to be made public during a press conference Tuesday by John Morton,” reports Reuters. Details of any plea agreement are also expected to be disclosed at that time.

This article is featured in:
Internet and Network Security

 

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