Nationwide piracy operation hits Rogue Valley

A local investigative cyber-crime agency is building a case against at least four Oregon residents they suspect of selling pirated computer software and DVDs to unsuspecting customers all over the country, including in the Rogue Valley.

The Southern Oregon High-Tech Crimes Task Force, made up of officers from several Rogue Valley agencies, has been investigating the alleged piracy operation for more than a year, task force commander Lt. Josh Moulin said. Officials believe at least four people - three from Eugene, one from Salem - have been importing counterfeit computer programs and movies from other countries to sell them for a higher price on Internet sites such as Craigslist and eBay.

Similarly imported goods have been traced back as revenue streams potentially funding foreign terrorist organizations.

"The funding from this can fuel larger criminal enterprises," Moulin said.

Task force members already have acquired transaction receipts from West Coast states, Florida, Kentucky and Tennessee.

Several Rogue Valley residents reported fraudulent online transactions to task force members before they started their investigation. Officers believe the pirated goods have been sold to customers in Ashland, Talent, Medford, Central Point and Grants Pass. Customers in Eugene, Bend, Hood River, Salem and Portland also have purchased the products, police said.

Most of the Oregon transactions involved face-to-face interaction during pickup and payment, typically in large shopping center parking lots. They were typically cash payments.

Moulin estimated at least $40,000 worth of transactions among at least 100 customers have taken place in Oregon alone.

"I believe it's going to be much more than that," Moulin said. "We should have a better picture of stuff in a week or two. We've just got a lot of stuff to sift through."

Items include the Rosetta Stone software program, intended to teach users other languages, and Microsoft Office software. Counterfeit DVDs of TV shows such as "NCIS," "Family Guy" and "Bones" also have been sold.

The software doesn't work. During installation, the program will ask the user to enter a licensing number found in the package, which a pirated version does not have. The DVD copies of television shows usually work, Moulin added.

No arrests have been made yet, as evidence is still being compiled. Task force members have gone undercover and met with sellers to purchase the pirated media, Moulin said. They also have run surveillance operations, executed search warrants at the suspects' homes and compiled a list of the Craigslist and eBay ads for the merchandise.

It's difficult to tell the counterfeit goods from store-bought ones, Moulin said. They are shrinkwrapped professionally and are sold at near-retail price.

"It's surprisingly good (quality)," Moulin said. "These were professionally made. People just have to be very cautious."

Legitimate products have anti-piracy seals and official sticker seals.

The task force received a $196,000 grant from the U.S. Department of Justice this year so it could devote more time and resources to the case. Grant dollars are being used for overtime, travel and other resources.

Task force members are working with state and federal prosecutors on the case. If the suspects are indicted, their charges could include several counts of identity theft, computer crime and copyright infringement. If convicted, their jail time will depend on prior criminal histories and whether they are tried in state or federal court.

"The federal system is much more severe," Moulin said, adding each suspect could face up to five years in prison and up to $250,000 in fines if convicted.