Bloomberg News

Chinese National Pleads Guilty to Software Piracy in U.S.

January 08, 2013

Chinese National Pleads Guilty in U.S. Software Piracy Scheme

Customers use computers at an Internet cafe in Shanghai, China. Photographer: Qilai Shen/Bloomberg

A Chinese national pleaded guilty to selling software pirated from American companies including Agilent Technologies Inc. (A:US)

Xiang Li, 36, entered pleas yesterday in federal court in Wilmington, Delaware, to one count each of conspiring to commit criminal copyright infringement and conspiring to commit wire fraud, according to court records. The case was handled by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations unit.

“Li mistakenly thought he was safe from the long arm of HSI, hiding halfway around the world in cyberspace anonymity,” ICE Director John Morton said today in a statement released with U.S. Attorney Charles Oberly in Wilmington. “HSI is committed more than ever to protecting American industry and U.S. jobs from criminals like him.”

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 April when a 46-count indictment against them was unsealed. The pair were charged with distributing more than 500 copyrighted works to more than 300 purchasers 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 in a Jan. 4 court filing.

Li, who was lured from China and arrested in 2011, faces as long as 25 years in prison at his sentencing, which is set for May 3 before U.S. District Judge Leonard Stark.

Prison Term

Mingli Chen, a lawyer representing Li, said in a phone interview that Li already has spent 1 1/2 years incarcerated and that he will ask the judge to rule that is enough. He said the judge may impose a term of five to eight years.

Chen said the government agreed to dismiss all charges against Li’s wife, Chun Yan Li, who Chen said is in China.

Charges against Chun Yan Li haven’t yet been dropped, Edward McAndrew, an assistant U.S. attorney prosecuting the case, said today in a phone interview. Prosecutors are independently evaluating the case against her in light of Li’s plea and the minor role she played, McAndrew said. It’s anticipated that charges against her will be dismissed, he said.

Xiang Li was arrested by federal agents in June 2011 in Saipan, an island about 120 miles (193 kilometers) northeast of Guam in the western Pacific Ocean, on an earlier indictment in the case.

Undercover Agents

Li agreed to travel there from China to deliver pirated software and 20 gigabytes of proprietary data from a U.S. software company to undercover HSI agents posing as businessmen, according to Morton’s statement.

In April, the U.S. said Chun Yan Li was a fugitive. Chen disputed that yesterday. McAndrew said today there is no warrant for her arrest.

The software includes programs made by Santa Clara, California-based Agilent and Canonsburg, Pennsylvania-based Ansys (ANSS:US) Inc., according to the indictment.

An Agilent product intended to speed the design process for electronic equipment was among the software illegally copied by the couple, according to the indictment. The SystemVue 2009 program sells for $45,000.

Xiang Li’s websites listed prices of $20 to $1,200 for products with retail values of several hundred dollars to $3 million, according to the government.

More than one-third of the illegal purchases were made by people in the U.S. including small-business owners, government contractors, students and engineers, Oberly said in a statement.

Related Charge

In connection with the charges, a former National Aeronautics and Space Administration engineer, Cosburn Wedderburn, pleaded guilty to conspiracy to commit criminal copyright infringement.

Government agents said Wedderburn bought more than $1 million in pirated software from the couple’s website.

Wronald Best, a scientist at a Kentucky-based government contractor, also pleaded guilty to purchasing 10 software programs worth more than $600,000, according to the statement.

The case is U.S. v. Li, 10-cr-112, U.S. District Court, District of Delaware (Wilmington).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Sophia Pearson in Philadelphia at spearson3@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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Companies Mentioned

  • A
    (Agilent Technologies Inc)
    • $56.08 USD
    • -0.21
    • -0.37%
  • ANSS
    (ANSYS Inc)
    • $78.0 USD
    • 0.61
    • 0.78%
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