50,000 Counterfeit DVDs Seized In Stockton

Federal authorities arrested five Northern California residents Thursday on charges of producing and selling pirated music and movie discs that made their way into retail stores across the country, according to the U.S. Attorney's offices in San Francisco and Sacramento.

Three of the suspects -- Ye Teng Wen, 29 and Hao He, 30, both of Union City, and Yaobin Zhai, 33, of Fremont -- were accused of making counterfeit CDs and DVDs after federal agents seized the molds for hundreds of pirated titles.

Meanwhile in a separate sweep, investigators took into custody a Stockton couple, Jesus Becerra Huerta, 48, and Rosa Isela Huerta, 39, that was allegedly selling more than 50,000 illegal movies and CDs at storefronts in San Jose and Stockton. Some of the items were allegedly sold to undercover agents.

Many of the movies are still playing in theaters and have not been released for home use, including "The 40-year-old Virgin," "Hustle & Flow," "Transporter 2" and "The Wedding Crashers."

All five of those arrested face charges including criminal copyright infringement, conspiracy and trademark infringement.

The cases, which resulted from a two-year investigation, are still under review and it is not clear if the two operations are related and exactly how big a piracy ring was uncovered, said Luke Macaulay, spokesman for the U.S. Attorney's Northern District office.

Over 100 federal, state and local law enforcement officers served search and arrest warrants at a dozen places in California and Texas on Thursday as part of the ongoing probe.

Authorities alleged Wen and He, co-owners of Media Art Technology in Hayward and Union City, operated a large-scale disc production facility that made illegal copies of more than 400 titles of pirated music, movies and anti-virus software. Many of music titles were by Latin music performers.

Zhai, co-owner of Magic Media and BDG Publishing in Hayward, allegedly had molds for at least 130 CDs and DVDs.

Macaulay said authorities could not estimate the value of the merchandise, but said that so-called "replicators" often use equipment capable of manufacturing tens of thousands of illegal copies worth tens of millions of dollars.

The information that led to their arrests came from an informant with a previous piracy conviction, according to court documents. That person recorded conversations and did business with Wen and He at the government's direction.

A counterfeit CD discovered at a retail store in Chicago was allegedly traced to their operation, according to court documents.

Copyright protection has emerged as a huge issue for Hollywood producers and theater owners as technology improvements allow counterfeiters to make illegal copies quickly and to shuttle them to markets all over the world.

The motion picture industry estimates that more than $3 billion annually is lost in potential worldwide revenue due to piracy.

After the Huertas appeared before a federal judge on Thursday, Jesus Huerta was released on a $100,000 bond and Rosa Huerta let go on her own recognizance.

Zhai was in custody and scheduled for a court appearance Friday. Wen and He each posted $75,000 bond and were released.