Under the predawn sky on June 29, 2005, federal agents armed with arrest warrants and Glock handguns banged on the door of the house at 38244 Hastings St. in Fremont, Calif. "FBI!" they shouted. Their target was a heavyset 24-year-old biker named Chirayu Patel, alleged to be a leader of the "Boozers" and a handful of other underground gangs that illegally copy and load onto the Internet blockbuster movies such as Star Wars: Episode III -- Revenge of the Sith and Batman Begins. Patel's dad answered the 6 a.m. wake-up call, FBI officials say. Ten agents swept the house, guns drawn. Patel was found in his bedroom, where he was cuffed and arrested.
In nearby San Francisco, FBI special agent Julia B. Jolie was pacing through the "op center," a 30-foot-by-30-foot room with photos and handwritten rap sheets pinned to the walls for Patel and 25 other digital pirates who were being arrested that morning. As head of the sting, dubbed Operation Copycat, Jolie had just given the "go" order to agents in the field. Video pirates, who are often clean-shaven and hold professional jobs, certainly don't look dangerous. But the manpower committed to the case demonstrates how seriously the feds take them. "Are these big bad mafia types? No," Jolie says later. "But this is a huge criminal activity."
Welcome to Hollywood's Napster moment. If movie studios hope to dodge the fate of the music industry, whose growth was cut short in part by illegal downloading, they need to come up with a solution to illegal copying. Part of that is to develop a model for legal movie downloads over the Net. Hollywood has taken baby steps in that direction. Studios have two Web sites, Movielink.com and CinemaNow.com, that offer movies via the Net. But downloads are slow, and the movies, which cost a few dollars to rent and $20 to own, can't be burned to a DVD. So studios also are prodding the feds to put some fear into pirates. The goal: stem the $6.1 billion that the industry estimates was lost to illegal copying in 2005. (Worldwide box-office sales were $23.5 billion.) Half of pirated material is in DVDs sold on street corners, but $3 billion comes from pirates stealing digital movies and posting them online. And stolen movies are also sent via the Net to facilities where the illicit DVDs are made. So, "the Internet is very much involved in all forms of piracy even if you're talking about street piracy," says Dan Glickman, CEO of the Motion Picture Association of America (MPAA).
That's why federal prosecutors and undercover sleuths have labored for the past two years to put some muscle behind the warning that's so familiar to home movie viewers ("Federal law provides severe civil and criminal penalties for the unauthorized reproduction, distribution or exhibition of copyrighted motion pictures..."). The California sting is part of a global investigation that is methodically targeting piracy rings from Chicago to Charlotte, N.C., to China. To date, the California investigation has won 24 convictions. Five more arraignments are expected in May, according to Assistant U.S. Attorney Mark Krotoski, who is prosecuting the case. Sentencing begins late this summer.
The picture that emerges from these investigations is of loosely knit cybergangs, driven more by competitive zeal than profit motive. A skilled "cammer," who records movies in a theater and sends them off for uploading to the Net, can make up to $2,000 per film. But most pirates, such as Patel, are in it for the thrill of proving their coding skills.
Think of piracy as a pyramid. The power sits at the top, where guys like Patel enable others to get content. By the time a movie shows up on peer-to-peer Internet networks, it can be downloaded, often for free, by anyone capable of typing "Mission: Impossible" into a search engine. That's why the feds zero in on the most sophisticated pirates and mostly ignore end users. "Targeting the top tier is a key way to catch these industry parasites," says intellectual property attorney Alan Fisch of Kaye Scholer LLP in Washington.
Video pirates aren't easily duped. It takes the FBI months to infiltrate groups. But they do have one vulnerability: All gangs need a place to store the massive amounts of media content they gather. (In the Copycat case, stolen movies, games, and other software grew to 27 terabytes of data, more than three times the contents of a typical video store.) That creates an opening for law enforcement.
The aspiring thief has to set up shop inside a powerful computer server, often inside a big company. Access might come from a disgruntled employee with authority to hand out passwords for remote or on-site access to the server. Once announced, the site operator becomes a magnet for specialists, granting access to "suppliers," who provide movies and computer parts, and "rippers," who crack copyright codes. Together, they make up what pirates call a "warez" (as in "softwares") group.
The Silicon Valley sting centered around a server that was leased by agents from an Internet service provider in the Bay Area. Agent Jolie's real coup, though, was in recruiting a thirtysomething Oakland agent (initials A.J.) who used to work in the computer industry. He proved to be a quick study. Shortly after interviewing with Jolie, A.J. discovered that warez groups used Linux server coding, which he learned in one night. "He can teach himself anything," Jolie says.
To slip into the pirate scene, A.J. became "Griffen" and started popping up in chat rooms. Several months later he hooked up with Patel and another bandit, David Fish. Once alerted to the available server, warez members swarmed in. One set up the computer for piracy, but group members judged the job so sloppy that they sought out Fish, whose scripting skills were legendary. Fish, 24, lived 3,000 miles away in Watertown, Conn. His day job was with a computer network company. In late March, 2004, court documents show, he began programming the server so his pals could send movies straight from their e-mail accounts. He set up a competition, pitting members against one another to see who could upload the fastest.
By spring of 2004, Fish and Griffen were busily loading movies -- 68 in all, including Hotel Rwanda, Blade: Trinity, and Monster-in-Law, plus hot new PlayStation 2 and Xbox video games. For example, in July, Fish -- going by the nickname x000x -- told Griffen to put a PlayStation 2 game into the server's DVD player, and explained what was necessary to encode it. A July 2 chat gave Griffen a sense of what was to come:
x000x: interested in ps2 games?
griffen: u bet, funny, just decided to get a ps2, played socom2 and loved it!
x000x: cool, well ur gonna be hooked up lol.
The chatter, sounding like two pre-teens trading instant messages, belied Fish's sophisticated skills. In November, Fish told A.J. to install a disk drive into the server and copy a programming file to it. That updated the flash memory, allowing Fish to read Xbox games remotely and copy them to the main drive.
griffen: ok, it's all ready...let her rip.
x000x: burnin. hopefully this works.
griffen: s--t, u the man, works great!
Meantime, Griffen was building trust with Patel, the Fremont pirate. Patel liked to show off. In late April, 2004, according to court documents, he boasted to Griffen about a TV news report on piracy that included a shot from a film he was stealing.
Of course, all the technological prowess is worthless without a steady supply of movies. Most come from inside the industry, prosecutors say. Sources include studio projectionists and workers at disc-stamping plants, where an estimated 15% of DVDs are discarded as defective. Even movie critics who get early copies sometimes pass them along.
Not every movie can be lifted before its release. That's where people like Curtis Salisbury come in. Salisbury, 20, worked in the box office at the Des Peres Cinema 14 in St. Louis. Last June he agreed to record The Perfect Man and load it onto the server for a warez group, court documents say. One night after the theater had closed, he used camcorder equipment to record copies of Bewitched and The Perfect Man from the projection booth.
With the help of friends, documents say, Salisbury connected his gear to the projector sound board to record. Later, he used his home computer to sync the audio. Salisbury sent a copy of The Perfect Man off to Griffen, who removed copyright watermarks (tiny, randomly placed security dots that identify the print). But first Griffen made a copy with the marks and shot it off to the MPAA. Technicolor, the film-print company, was able to determine that the copies came from the Des Peres. A month later, on July 27, the FBI showed up at Salisbury's door.
Today, Salisbury, Patel, and Fish have all been convicted on counts of criminal copyright infringement after pleading guilty. Salisbury, expected to be sentenced in June, is facing a maximum of eight years in prison but could get off with probation. Patel and Fish await sentencing in August. Patel faces up to eight years, Fish up to 23 years. Each could be ordered to pay from $4,000 to $1 million in fines. (Calls to attorneys for the three were not returned.)
Jolie claims the busts slowed pirate activity. But she recognizes that victory is elusive. "You have to liken it to a gang war," Jolie says. "We try to make an effective dent and glean more intelligence for the next takedown."
By Roger O. Crockett