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Los Angeles police this week arrested a pair of men charged with running one of the most organized and profitable counterfeit software rings on record through the popular online classified site Craigslist.
Duong Tran, 29, and Huy Nguyen, 27, are accused of downloading thousands of software applications from Demonoid.com, a rogue Web site and BitTorrent tracker.
After downloading knock-off applications from vendors, such as Adobe Systems (NASDAQ: ADBE), Autodesk (NASDAQ: ADSK), Rosetta Stone, SolidWorks and others, the duo allegedly would create cracked serial keys and burn the apps onto recordable CDs, according to police and representatives from the Software and Information Industry Association (SIIA).
Working out of an apartment near Chinatown in Los Angeles, the men would then market the counterfeit applications on Craigslist at below-market prices. They even designed authentic-looking CD sleeves and offered frequent customer coupons to buyers who repeatedly purchased the stolen goods.
They also included "very detailed" installation instructions along with the burned CD and the cracked key upon completion of the order.
"Tran and Nguyen probably thought Craigslist was an easy way to sell their illegal software, but now theyre in jail and facing huge financial penalties," Keith Kupferschmid, the SIIA's senior vice president for intellectual property policy and enforcement, said in a statement. "These arrests should serve as a warning to anyone distributing software on Craigslist -- the next person you sell to could be a police officer or one of our investigators."
The SIIA, a trade association and antipiracy watchdog representing roughly 500 software and digital content companies, has been on a crusade to eliminate or at least reduce the rampant sale of stolen or counterfeit software on popular e-commerce sites -- most notably eBay.
The organization's efforts have led to a number of high-profile counterfeiting busts in recent years as it fights to stem what IDC estimates is a $53 billion illicit industry.
At the time of the arrest, the LAPD seized software and hardware from the pair valued at more than $36,000. Investigators say the accused men held at least three PayPal accounts and collected more than $40,000 in ill-gotten revenue through PayPal alone in the past year.