Chinese Pirate Admits Selling Software Worth $100M

Max 'Beast from the East' Smolaks covers open source, public sector, startups and technology of the future at TechWeekEurope. If you find him looking lost on the streets of London, feed him coffee and sugar.

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Xiang Li sold software that retails for thousands of dollars for as little as $20

On Monday, a Chinese businessman pleaded guilty to selling $100 million worth of pirated software, in a federal court in Delaware, US.

Xiang Li, a 36-year-old resident of Chengdu, China, is accused of stealing computer programs, including specialist software used in defence and engineering industries, from around 200 US-based companies, and selling them illegally in 61 countries around the world.

Li is facing 25 years in prison and a $500,000 fine. US officials have called this case the first of its kind.

Crime doesn’t pay

According to Reuters, Li was arrested in June 2011, as part of the sting operation conducted by the US Department of Homeland Security. He was lured out of Chinato, the Pacific island of Saipan, which is under US jurisdiction, where he was taken into custody by undercover agents.

 Piracy, pirate © StacieStauffSmith Photos Shutterstock 2012“Li thought he was safe from the long arm of US law enforcement, hiding halfway around the world in cyberspace anonymity. He was sorely mistaken,” said John Morton, the director of the US Immigration and Customs Enforcement, in a statement after the arrest.

Li allegedly operated his shady business since 2008, with clients including a NASA engineer (who has since pleaded guilty to conspiracy to commit criminal copyright infringement) and employees of the US defence industries. He would find software with illegally ‘cracked’ licences, advertise it on his website and sell it online, delivering files through cloud hosting services and email.

The ‘victims’ of this enterprise include Microsoft, Oracle, Rockwell Automation, Agilent Technologies, Siemens, Delcam, Altera and SAP.

Li pleaded guilty to single counts of conspiracy to commit criminal copyright violations and wire fraud. “I want to tell the court that what I did was wrong and illegal and I want to say I’m sorry,” he told the judge.

Prosecution has estimated the value of stolen software to be around $100 million, but Li disputes this figure. He claimed to have sold programs worth several thousand dollars for as little as $20, and will provide his own estimate when he is sentenced in May.

Li’s lawyer Mingli Chen told Bloomberg that she will argue for a reduced jail term, since he has already has spent 1.5 years incarcerated.

US authorities have been gradually stepping up their fight against online piracy. Last year, as part of an international investigation, the US Department of Justice had issued seizure orders against three websites selling pirate Android apps.

Kim Dotcom, the man behind the infamous Megaupload file hosting service, is currently awaiting trial that will determine whether he will be extradited to the US, where he is accused of copyright theft, money laundering and racketeering fraud.

Meanwhile in the UK, the Pirate Party was recently forced to take down its Pirate Bay proxy server, after being threatened with legal action by the British Phonographic Industry group.

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