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Capping what the head of the FBI's Chicago Office described as the agency's "most significant investigation of copyright infringement involving the use of the Internet," a U.S. grand jury indicted 17 people on Thursday for their role in posting pirated software valued at over $1 million (US$) on secret Web sites.
Twelve of the 17 were allegedly members of a global ring of Internet pirates who called themselves "Pirates with Attitudes," or "PWA." The secret Internet sites -- accessible only to fellow pirates who knew the password -- contained over 5,000 items, including applications software, operating systems, MP3 music files, and games.
The largest of the sites, known as Sentinel, operated off servers at the University of Sherbrooke in Quebec, Canada.
Cost of Membership
Members joined the group by providing copies of advanced programs that were not yet available online. One of the defendants was a Microsoft (Nasdaq: MSFT) employee who allegedly gave the group's ringleader access to Microsoft's internal network.
Once the software was delivered, group members stripped it of its embedded copy protection coding and posted it online for download by other pirates.
Among those indicted was the group's ringleader, Robin Rothberg, 32, of North Chelmsford, Massachusetts, who was arrested and charged in February with conspiring to violate the copyrights on thousands of computer programs.
Federal investigators infiltrated the PWA about a year ago, with the help of two former members of the group.
Hardware Exchange
Also in on the scheme were five employees of Intel (Nasdaq: INTC) Corporation. Four of the Intel employees, in a 1998 deal 
set up by the fifth, supplied the pirates with hardware capable of boosting the pirates' storage capability. In return, they and other Intel employees reportedly gained access to the pirated software.
According to U.S. Attorney Scott Lassar, even though the pirates seemed to be carrying on their activities for kicks rather than cash, they will face stiff penalties if convicted. The maximum sentence for conspiracy to infringe on copyrights is five years in prison, a $250,000 fine, and restitution.
Growing Problem
Due to the ease with which copyrighted work can be distributed over the Internet, copyright infringement is a growing problem. Last week, a U.S. court ruled that MP3.com was liable of copyright infringement for allowing users to share copyrighted music.
That ruling was the result of a suit brought by the Recording Industry Association of America (RIAA). Similar suits are still pending against Napster, the maker of popular online swapping software, by hard rock band Metallica, rapper Dr. Dre, and the RIAA.
Last month, a German court ruled that AOL Germany violated copyright law by taking no action to prevent subscribers from swapping pirated digital music files.
Also pending is a case by interactive entertainment powerhouses Sega America, Electronic Arts, and Nintendo of America against Yahoo!. The companies claim that Yahoo! knew that counterfeit video and computer games were being sold through Yahoo! Auctions and Yahoo! Stores.
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