IP Democracy: Moles Inside the Hollywood Hacker Community

Business Week Online has this fascinating look inside how the FBI investigates and busts “warez” groups, rings of smart computer programmers that filch movies and put them online. With colorful descriptions, the piece walks through a sting operation called “Operation Copycat” that went down last summer.

This FBI operation was a massive net that ensnared quite a few top players in the growing field of unauthorized film distribution.

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.

Unlike the record industry, Hollywood is aiming its legal ammunition at the big boys, and not at individual users.

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.

The term “boys” is right for film thieves — most are in their early twenties and are in the unauthorized film distribution business for the thrill of it all. To trap the warez groups, the FBI has to fight fire with fire. The federal law enforcement agency has hired its own computer programming talent to infiltrate the macho groups.

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.

Posted by Cynthia Brumfield on May 15, 2006 8:32 AM to IP Democracy