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Five Additional Defendants Charged with Violating Copyright Laws

SAN JOSE � United States Attorney Kevin V. Ryan announced that as part of the ongoing prosecution arising out of Operation Copycat, a federal grand jury in San Jose returned a four-count indictment charging five additional individuals with violations of federal copyright laws. To date, 32 individuals have been criminally charged as part of the ongoing investigation into online �warez� sites, and 20 of those have been convicted since September 26, 2005.

Based on today�s indictment, the following five persons were each charged with Conspiracy to commit criminal copyright infringement:

• Allen Soares, 19, of Pleasanton, California
• Shon Peterman, 33, of Wichita, Kansas
• Tom Leung, 53, of Cupertino, California
• Ray Morada, 32, of Washington, D.C.
• Josh McAleer, 19, of San Juan Capistrano, California

Defendants Soares, Leung and Morada were also charged with violating the No Electronic Theft Act (known as the "NET Act") for copyright infringement by electronic means over the Internet. The indictment also contains forfeiture allegations against defendants Leung and Morada to forfeit computer and other equipment used to violate the criminal copyright laws. The equipment was seized during the execution of federal search warrants executed on June 29, 2005.

A substantial amount of equipment used in the copyright violations is being forfeited to the government. As part of each plea agreement, each defendant has agreed to forfeit any right, title and interest they have in computer and other equipment that was seized during the federal search warrants executed on June 29, 2005. The Forfeiture Section of the U.S. Attorney�s Office has assisted on the forfeiture of the following materials to date:

• 118 computers;
• 13 laptops;
• 4,567 infringed CDs and DVDs;
• 413 VHS tapes and floppies;
• 28 key boards and monitors;
• 5 digital cameras;
• 28 PlayStation Players/Xbox;
• 7 computer towers; and
• a Plasma TV, cell phones, speakers, an MP3 player, and a DSL player.

The defendants will be arraigned on the indictment on May 11, 2006 at 2:00 p.m. before United Magistrate Judge Richard Seeborg in San Jose.

Description of Warez Sites:

The charges stem from the undercover investigation targeting online "warez" groups illegally distributing newly-released movies, games, software and music. "Warez groups" are the "first-providers" of copyrighted works to the warez underground - the so-called "release" groups that operate as the original sources for a majority of the pirated works distributed and downloaded via the Internet.

Once a warez release group prepares a stolen work for distribution, the material is distributed in minutes to secure, top-level warez servers throughout the world. From there, within a matter of hours, the pirated works are distributed globally, filtering down to peer-to-peer and other public file sharing networks accessible to anyone with Internet access.

Higher level members of the warez groups, known as site operators or "SiteOps," administered and maintained the site and controlled access to the site by use of security measures such as usernames and passwords. Others serve as "equipment suppliers" (providing hardware (such as hard drives, computer parts, and computer servers) to the warez site), "encoders" or "crackers" (those defeating copy protection devices); "scripters" (creating, programming, and helping build the warez site); "brokers" (who found groups to participate on the warez site). Lower level members included "suppliers" (providing an unauthorized copyrighted movie, game or software), "cammers" (those making unauthorized camcorder recordings in movie theaters), "couriers."

20 Guilty Pleas To Date:

Since September 2005, the following individuals have been convicted as part of Operation Copycat, including:

• February 27, 2006: David M. Fish, 24, of Watertown, Connecticut, a site operator and scripter, equipment supplier, broker, leech, and encoder for the warez sites, pleaded guilty to conspiring to commit criminal copyright infringement and to violating the NET Act and aiding and abetting, and copyright infringement by electronic means and aiding and abetting; two violations of the Digital Millennium Copyright Act, including distribution of technology primarily designed to circumvent encryption technology protecting a right of a copyright owner; and circumventing a technological measure that protects a copyright work.

• September 26, 2005: Curtis Salisbury, 19, of St. Charles, Missouri, pleaded guilty to two charges under the recently enacted "Family Entertainment and Copyright Act of 2005," including the first convictions in the country under new statutes for using recording equipment to make copies of movies in movie theaters, and for making a commercially distributed movie available on a computer network accessible to members of the public.

• March 13, 2006: Matthew Fong, 19, of Miami, Florida , pleaded guilty to conspiring to commit criminal copyright infringement and to violating the NET Act and aiding and abetting, and criminal copyright infringement by distributing a copyrighted work on a computer network, and aiding and abetting.

• December 12, 2005: Mark G. Carter, II, 28, of Azusa, California, pleaded guilty to one count of violating the NET Act and to one count of conspiracy to commit offenses against the United States.

The following persons have pleaded guilty to conspiring to commit criminal copyright infringement and to violating the NET Act and aiding and abetting with the date of conviction noted:

• April 3, 2006: Donovan Kargenian, 31, of El Cajon, California

• April 3, 2006: David Siloac, 27, of Denver, Colorado, and formerly of Clinton Township, Michigan

• April 3, 2006:Matthew Thompson, 22, of Lubbock, Texas

• March 13, 2006:Eric Rolfe, 22, of Columbia, Missouri

• March 13, 2006:Stephen Brown, 36, of Indianapolis, Indiana

• March 13, 2006:Moises Nunez, 33, of Glendale, California

• February 27, 2006:Deston Evans, 21, of Galax, Virginia

• February 27, 2006:Oscar Martinez, 25, of San Diego, California

• January 9, 2006:Paul Aleman, 25, of Menafee, California

• November 30, 2005:Nathaniel Lovell, 22, of Boulder, Colorado, an equipment supplier for the warez sites

• November 14, 2005:Chirayu Patel, 23, of Fremont, California, and one of the site operators for the warez site

• October 11, 2005: William Veyna, 34, of Chatworth, California, another site operator

The following persons have pleaded guilty to violating the NET Act and aiding and abetting with the date of conviction noted:

• January 9, 2006: Philip Kang, 22, of Wayne, New Jersey

• December 12, 2005: Jonathan Stanley Golenbock, 22, of Ithaca, New York

• November 14, 2005: Daniel Van Horn, 32, of Wantagh, New York

• October 3, 2005: Ryan Zeman, 23, of Rohnert Park, California

The maximum penalties for conspiring to violated federal copyright law, in violation of 18 U.S.C. � 371, are five years in prison and three years of supervised release. The maximum penalties for violating the NET Act, in violation of 17 U.S.C. � 506(a)(1)(B), and 18 U.S.C. � 2319(c)(1), are three years in prison and two years of supervised release. A maximum fine of $250,000 applies to each offense, and a mandatory special assessment of $100 applies for each conviction. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. � 3553. An indictment only contains allegations and these defendants, as with all defendants, must be presumed innocent unless and until convicted.

Mark L. Krotoski is the Assistant U.S. Attorney from the CHIP Unit who is prosecuting the case, along with the assistance of Legal Assistants Mimi Lam and Lauri Gomez. Stephanie M. Hinds is the Assistant U.S. Attorney, along with Alicia Chin, paralegal, assisting with the asset forfeiture matters on the case.

Further Information:

More information on Operation Copycat.

More information on Operation Site Down

A copy of this press release and related court filings may be found on the U.S. Attorney�s Office�s website.

Electronic court filings and further procedural and docket information are available here.

Judges� calendars with schedules for upcoming court hearings can be viewed on the court�s website.

All press inquiries to the U.S. Attorney's Office should be directed to Luke Macaulay at (415) 436-6757 or by email.

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