Chinese cybercriminal pleads guilty to $100 million worth of software piracy

In an undercover sting operation, U.S. agents arrested Chinese Xiang Li after luring him into the country. Yesterday in federal court, Li pled guilty to pirating, cracking and selling amounts of software valued at over $100 million, according to Reuters.

The U.S. Department of Homeland Security pinned Li in June 2011 when agents learned he was the leader of an online piracy hub that sold software stolen from Microsoft, Oracle, Agilent Technologies, Rockwell Automation, Siemens and more. The software was used for defense, space and engineering purposes.

U.S. law enforcement was relentless in their approach to take down this cybercrime giant.

“Li thought he was safe from the long arm of U.S. law enforcement, hiding halfway around the world in cyberspace anonymity. He was sorely mistaken,” John Morton, U.S. Immigration and Customs Enforcement Director, said last year. “Whether in China or cyberspace, this arrest is proof that Homeland Security Investigations and our partners at the National Intellectual Property Rights Coordination Center are committed to identifying, infiltrating and disrupting these criminal enterprises wherever they exist.”

Allegedly, 200 U.S. manufacturers were victims of Li’s crimes between 2008 and 2011. He sold the software in 61 foreign countries on websites like crack99.com and others under his ownership. Prices listed for pirated software on the sites ranged from $20 to $1,200, according to National Intellectual Property Rights Coordination Center (IPR Center), but actual retail cost ranges from several hundred dollars to over one million dollars. Prosecutors estimate the total retail price of the software was more than $100 million.

The sting operation started when U.S. agents worked undercover, buying over $150,000 retailed value of software from Li over an 18 month period, according to Reuters. It was the agents’ proposal of a phony joint illegal business venture in Saipan, a U.S. territory near Guam, that led to the software pirate’s demise.

Li faces up to 20 years in federal prison and a $500,000 fine for pleading guilty to two counts of conspiracy to commit criminal copyright violations and wire fraud, although he was originally charged with 46 counts. His sentencing is set for May 3.

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