Chinese man with ties to Ky. gets 12 years in prison for software piracy

Bloomberg NewsJune 12, 2013 

WILMINGTON, Del. — A Chinese national was sentenced to 12 years in a U.S. prison for selling more than $100 million worth of software pirated from American companies, including Agilent Technologies Inc., from his home in China. One of his top clients was a man in Western Kentucky, according to the federal government.

Xiang Li, 36, was sentenced Tuesday in federal court in Wilmington, Del., after pleading guilty to copyright fraud and wire fraud conspiracy charges in connection with software sales from his China-based website, prosecutors said in a news release.

Li and his wife, of Chengdu, China, were accused of running a website called "Crack 99" that sold copies of software for which "access-control mechanisms" had been circumvented, the United States said in an unsealed 46-count indictment. The couple were charged with distributing more than 500 copyrighted works to more than 300 buyers in the United States and overseas from April 2008 to June 2011. The retail value of the products was more than $100 million, the government said.

Among Li's clients was Wronald Best, 55, of Owensboro, who was sentenced in March to one year in prison and three years of supervised release, and was ordered to pay a $6,000 fine, according to a news release from U.S. Immigration and Customs Enforcement. Best obtained more than $2.3 million in stolen software from Chinese and Russian cyber criminals, the government said.

Best was "chief scientist" at Owensboro-based MPD Inc., a government contractor that services the U.S. and foreign militaries and law enforcement agencies.

Best paid more than $6,000 to obtain pirated software worth more than $2.3 million from Li and others, the government said.

Li is the first Chinese citizen to be "apprehended and prosecuted in the U.S. for cybercrimes he engaged in entirely from China," prosecutors said in court filings.

Mingli Chen, Li's lawyer, said in a telephone interview that "it was hard for me to accept that Mr. Li deserved" a 12-year sentence.

Li was arrested by federal agents in June 2011 in Saipan, an island about 120 miles northeast of Guam in the western Pacific Ocean, according to court filings.

Li agreed to travel there from his home in southwest China to deliver pirated software and 20 gigabytes of proprietary data from a U.S. software company to undercover agents posing as businessmen, according to court filings.

The pirated software included programs made by Santa Clara, Calif.-based Agilent and Canonsburg, Penn.-based Ansys Inc., prosecutors said.

An Agilent product intended to speed the design process for electronic equipment was among the software illegally copied by the couple, according to the indictment. The SystemVue 2009 program sells for $45,000.

Xiang Li's websites listed prices of $20 to $1,200 for products that had retail values ranging from several hundred dollars to $3 million, according to the government. He engaged in more than 700 sales of pirated software, prosecutors contended.

Prosecutors had asked U.S. District Judge Leonard Stark to sentence Li to more than 17 years in prison. Li will be deported to China once he serves his prison term, the government said in a statement.

Herald-Leader staff contributed to this report.

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