A joint investigation conducted by the FBI and authorities with the People's Republic of China's (PRC) Ministry of Public Security (MPS) has resulted in multiple arrests and the seizure of more than a half billion dollars worth of counterfeit software. The operation, codenamed "Summer Solstice," began in 2005. This unprecedented cooperative effort led to the arrest of twenty five individuals, the search of multiple businesses and residential locations, asset seizures by the Chinese government worth over $7 million, and the seizure of over 290,000 counterfeit software CDs and COAs (certificates of authenticity) in China. The counterfeit software has an estimated retail value of $500 million. In addition, the FBI's Los Angeles Field Office executed 24 searches and asset seizure warrants, yielding approximately $2 million in counterfeit software products, in addition to assets seized by the U.S. government worth over $700,000.
Operation Summer Solstice encompasses multiple investigations currently being conducted by the FBI in Los Angeles and the MPS, Economic Crime Investigation Department (ECID), in which criminal organizations responsible for manufacturing and distributing counterfeit software have been identified in both Shanghai and Shenzhen; as were distributors located in the United States.
One such group, the MA Ke Pei organization, based in Shanghai, was allegedly responsible for supplying counterfeit goods to many of the distributors based in the United States, whose offices have since been subjected to search warrants executed by the FBI. In 2003, Ma, was indicted in New York for criminal copyright and trademark violations relating to the manufacture and distribution of counterfeit Microsoft products. Ma fled the United States and returned to China, where he allegedly continued his counterfeit operation.
MA Ke Pei was arrested and 10 of his co-conspirators were arrested. Chinese authorities froze over $500,000 and 5 real estate properties owned by Ma and seized equipment to manufacture counterfeit Symantec computer software products. Many of the American-based distributors where federal searches were executed were allegedly being supplied by the Ma's multinational criminal organization.
The MPS, ECID, in cooperation with the FBI and software industry investigators, identified more than fourteen major producers and/or distributors located in Shenzhen who allegedly produced high quality counterfeit software products that were subsequently distributed throughout the world. Industry experts believe that 70% of these counterfeit products were shipped to the United States and then sold to local distributors and retail customers; the remainder was sold to other countries around the world. The majority of Chinese-based distributors advertised their products aggressively and recruited distributors via the Internet. This cooperative effort led to fourteen arrests including WANG Wenhua and CHE Tingfeng and 12 of their co-conspirators. Several search warrants led to the dismantlement of 6 manufacturing and retail facilities, the seizure of 8 high quality counterfeit Microsoft master CD replication disks and the seizure of over 47,000 counterfeit Microsoft CDs in Shenzhen, China. The individuals arrested in China are charged with violations of the PRC criminal copyright law and remain in custody.
FBI Agents assigned to Los Angeles and the FBI's Legal Attache Office located in Beijing, China, provided information and substantial assistance in support of the investigation conducted by the MPS, ECID located in Beijing, Shanghai, and Shenzhen China. The FBI will continue their investigation into the criminal activity allegedly conducted by distributors based in the United States. (Source: FBI Los Angeles Division, Jul 23, 2007).