Movie-Piracy Websites Shut Down in Raids by U.S.

U.S. customs officials began closing Web sites that offer pirated movies, fulfilling a promise to crack down on illegal downloads that Hollywood executives say cost the U.S. economy more than $20 billion a year.

The Homeland Security Department’s Immigration and Customs Enforcement arm announced Operation In Our Sites today at Walt Disney Studios in Burbank, California. Federal agents seized nine website domain names, and assets from 15 bank, Paypal, investment and advertising accounts. They also served search warrants on four residences.

Greater enforcement is a lobbying priority for the entertainment industry, which has lost sales as consumers gain access to free music and movies on the Web. The administration of President Barack Obama is intensifying efforts to rein in pirated movies and music, Victoria Espinel, the U.S. intellectual property enforcement officer, told the Senate Judiciary Committee on June 23, vowing to shut non-U.S. sites.

“We will go after the foreign-based websites and Web services that infringe our intellectual property rights,” Espinel told the panel.

The U.S. sought search warrants to retrieve data from the hard drives of servers in the U.S. that are used to deliver movies, a government employee with knowledge of the operation said before the announcement. Sites located off U.S. shores were to be blocked, with users re-directed to a U.S. government site, said the person, who wasn’t authorized to speak publicly on pending enforcement actions.

Domain Names

The targeted domain names include TVshack.net, movies- links.tv, now-movies.com, planetmoviez.com and filespump.com, according to a statement from Immigration and Customs.

Cases are expected to be referred to the U.S. Attorney’s office in southern New York and to another unidentified office, the person said.

Motion picture piracy costs the U.S. economy more than $20 billion annually, Barry Meyer, chief executive officer of Time Warner Inc.’s Warner Brothers unit, said in written testimony at the hearing. He estimated that there were more than 1.78 million illegal downloads of “Sherlock Holmes,” which starred Robert Downey Jr., in the 30 days following its December release.

The Hollywood crackdown is part of a larger push to halt traffic in pirated and counterfeit goods, including pharmaceuticals and software, that Espinel outlined in her testimony.

The federal action was announced by John Morton, Immigration & Customs assistant secretary, along with Walt Disney Studios President Alan Bergman and Frederick Huntsberry, chief operating officer at Paramount Pictures, a unit of New York-based Viacom Inc. Also attending were members of Directors Guild of America and other trade unions who argue that piracy harms jobs.

Walt Disney Co., the world’s largest media company, lost 33 cents to $31.97 at 2:29 p.m. in New York Stock Exchange composite trading. Viacom, controlled by Sumner Redstone, fell 38 cents to $31.69.

To contact the reporter on this story: Ronald Grover in Los Angeles at rgrover5@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net

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