The U.S. Department of Justice (DoJ) bagged its first-ever criminal convictions for peer-to-peer (P2P) copyright theft Tuesday when two men arrested in last summer's Operation Digital Gridlock pleaded guilty.

William R. Towbridge, 50, of Johnson City, N.Y., and Michael Chicoine, 47, of San Antonio each pleaded guilty to one count of conspiracy to commit felony criminal copyright infringement. The maximum penalties for a first-time offender are five years in prison, a fine of $250,000 and restitution to the victims.

In addition, Towbridge and Chicoine will be required to destroy all infringing copies and all equipment used to make the infringing copies. Sentencing is scheduled for April 29.

The operation targeted the illegal file sharing of copyrighted materials over five P2P networks that belonged to a group known as the Underground Network. According to the DoJ, the networks required users to share a minimum of 1GB to 100GB of computer files with other users on the network.

"Like the defendants who pleaded guilty today, those who steal the work of others over the Internet stand to face serious consequences," Kenneth L. Wainstein, the U.S. attorney for the District of Columbia, said in a statement.

According to court documents, Towbridge and Chicoine owned, maintained and moderated two Direct Connect hubs offering computer software, games, music and movies worth millions. The networks required their users to share computer files with other network users, all of whom could download each others' shared files.

During the investigation, first announced by Attorney General John Ashcroft in August, government agents downloaded more than 70 copyrighted works worth approximately $20,000 from Towbridge's hub and 35 works from Chicoine's site valued at nearly $5,000.

According to an FBI affidavit in support of the search warrants, the Underground Network Web site is hosted on a server located in San Antonio. The hubs on the network are located both in the United States and abroad. The affidavit claims the network has 55 staff positions including hub operators and moderators and network administrators.

Users access the site by downloading Direct Connect software and then connecting to the Underground Network. There is no fee to join the network and members are provided with access to a list of hub sites on the network. The DoJ stressed that NeoModus, which develops the Direct Connect P2P software, is not a target of the investigation.

During the August press conference, Ashcroft said search warrants were executed in Texas, New York and Wisconsin in raids on five residences and an Internet service provider. During the raids, federal agents seized computers, software and computer-related equipment.

Ashcroft said the raids "disrupted an extensive peer-to-peer network suspected of enabling users to traffic illegally in music, films, software and published works."

"As today's pleas demonstrate, those who steal copyrighted material will be caught, even when they use the tools of technology to commit their crimes," Ashcroft said in a statement issued late Tuesday afternoon. "The Department of Justice is committed to pursuing and bringing to justice those who commit intellectual property theft."

The FBI, the Office of the U.S. Attorney for the District of Columbia and the Justice Department's Computer Crime and Intellectual Property Section, is conducting the ongoing investigation. The DoJ says theft through the illegal reproduction and distribution of movies, software, games and music is estimated to annually cost U.S. industries $19 billion worldwide.