China jails two Americans for piracy

Two Americans have been sentenced to jail in Shanghai for selling pirated DVDs over the Internet, China’s state-run media reported Wednesday.

Randolph Hobson Guthrie III, Cody Abram Thrush and two Chinese accomplices were charged with selling pirated DVDs for US$3 per disc over eBay Inc.’s auction Web site and another site, called Three Dollar DVD, according to the official China Daily newspaper.

Police had estimated the group had sold 180,000 DVDs worth roughly 7 million renminbi (US$845,000) between November 2003 and July 2004, the report said.

However, the judge who presided over the case at the Shanghai No. 2 Intermediate People’s Court said evidence presented by police showed the group had sold 133,000 pirated DVDs worth around 3.3 million renminbi to customers in more than 20 countries, including the U.S., the U.K., Canada and Australia, it said.

Based on the evidence presented, the group’s profit from these sales was found to be almost 1 million renminbi, it said.

DVD piracy is rampant in China, and pirated discs can be found for sale in shops and on the street in many Chinese cities, including Shanghai and Beijing. The Chinese government has announced efforts to crack down on pirated DVD sales but these efforts so far appear to have had little impact.

Guthrie — who was described in the report as the “prime culprit” — was sentenced to 30 months in jail and fined 500,000 renminbi while Thrush and the two Chinese accomplices, Wu Dong and Wu Shibiao, were given sentences up to 10 months and fined between 10,000 renminbi and 30,000 renminbi, China Daily reported. Guthrie and Thrush will be deported from China when their sentences have been completed, it said.

According to the U.S. Department of Homeland Security (DOHS), which jointly investigated the case, codenamed Operation Spring, with Chinese law enforcement officials, Guthrie and five other individuals were arrested in Shanghai on July 1, 2004. The arrests were made by officers from China’s Ministry of Public Security and the Shanghai Public Security Bureau.

At the same time, Chinese police also seized 210,000 pirated DVDs and $67,000 and 222,000 renminbi in cash, DOHS said.

Guthrie appears to not have tried very hard to hide his activities. A check of whois records for the domain name lists an address in Shanghai, a Shanghai telephone number, and a Yahoo Inc. e-mail address with the user name “randyguthrie.”

The DOHS investigation was launched in Sept. 2003 by the department’s Immigration and Customs Enforcement offices in Gulfport, Mississippi, and Houston, the department said. American officials approached their Chinese counterparts in April 2004 to assist with the investigation, it said.

DOHS also credited the Motion Picture Association of America (MPAA), an industry group, with providing “crucial assistance and information” to law enforcement officials in the U.S. and China. MPAA estimated U.S. film companies lose over $3.5 billion in potential worldwide sales due to piracy, DOHS said.

(Martyn Williams, in Tokyo, contributed to this report.)

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