SAN JOSE - United States Attorney Kevin V. Ryan announced that Maksym Vysochanskyy, a/k/a Maksym Kovalchuk, 27, of Ternopil, Ukraine, pleaded guilty late yesterday afternoon in federal court in San Jose to charges of criminal copyright infringement, trafficking in counterfeit goods, and prohibited monetary transactions stemming from his global distribution of counterfeit computer software over the Internet from December 2000 to May 2003. The case is one of the first to involve an extradition in a prosecution alleging intellectual property offenses.
The guilty plea follows defendant's extradition from Thailand, where he was arrested in May 2003 on a provisional arrest warrant by the Royal Thai Police with the assistance of law enforcement agents from the U.S. Secret Service and U.S. Postal Inspection Service. A criminal complaint filed at the time showed that Mr. Vyschanskyy's overseas arrest was made possible when U.S. agents monitoring his email traffic observed him make travel plans from Ukraine to Thailand, and flew to Bangkok to meet him. After contested proceedings, Mr. Vysochanskyy was extradited to San Jose to face federal charges in March 2004. He has been held in custody as a flight risk since his arrival in the United States.
United States Attorney Kevin V. Ryan stated: "This ground-breaking case demonstrates the resolve of this office and its pioneering CHIP Unit to combat the theft of the nation's intellectual property, whether the threat arises at home or from abroad. It also serves as an example to individuals abroad who seek to profit from the theft of our nation's intellectual property that the Department of Justice will vigorously seek their extradition to the United States to achieve justice."
According to the plea agreement and court records, from December 2000 to May 2003, Mr. Vysochanskyy sold counterfeit software programs on eBay and by operating numerous Web sites, including cdservice.org, bigcds.net and gold-cds.com. The counterfeit software programs included titles owned by Adobe, Autodesk, Borland and Microsoft. Under the plea agreement, Mr. Vysochanskyy admitted that he engaged in much of this activity from Ukraine and that his intended loss under the U.S. Sentencing Guidelines for his conduct was valued between $400,000 to $1 million.
Secret Service Special Agent in Charge Paul Morrissey added, "No one agency can effectively combat these types of global electronic crimes on their own. To be successful, as we were in this case, law enforcement needs to pool their expertise and resources across agency, private sector and international lines. The San Francisco Electronic Crimes Task Force is the perfect vehicle to combat cases that are routinely international in scope and technology intensive."
To field and respond to purchase orders for software programs, Mr. Vysochanskyy created online aliases, such as "Patricia Brekles" and "Kevin McGuigan," and communicated using Web-based email accounts. Mr. Vysochanskyy also used an email account of a California-based educational company and a remote email application to further disguise his true identity. To receive payment for his counterfeit software, Mr. Vysochanskyy relied on intermediaries in the United States and elsewhere, as well as online payment processors, to forward him funds, including over $20,000 that was sent to him via wire transfers to a bank account in Lithuania.
Mr. Vysochankyy pleaded guilty to a three-count superseding information charging him with criminal copyright infringement in violation of 18 U.S.C. ß 2319(a); trafficking in counterfeit goods in violation of 18 U.S.C. ß 2320(a); and engaging in monetary transactions in property derived from specified unlawful activity in violation of 18 U.S.C. ß 1957(a). The maximum statutory penalties are 5 years' imprisonment and a fine of $250,000 for the copyright offense; 10 years' imprisonment and a $2 million fine for the counterfeiting offense; and 10 years' imprisonment and a $250,000 fine for the monetary transactions offense. However, the defendant's sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. ß 3553.
Mr. Vysochanskyy is scheduled to be sentenced by U.S. District Judge James Ware on February 13, 2006 at 1:30 p.m. in federal court in San Jose.
The prosecution is the result of a two-year investigation by agents from the San Francisco Electronic Crimes Task Force (SFECTF), which includes agents from the United States Secret Service, the United States Postal Inspection Service and the Internal Revenue Service-Criminal Investigation. The United States Embassy in Thailand and the authorities from Thailand, including the Royal Thai Police, also substantially assisted in the apprehension and extradition of Kovalchuk. Authorities from Canada, Lithuania, and Ukraine also substantially assisted in the investigation.
The investigation was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the United States Attorney's Office. Christopher P. Sonderby, Chief of the CHIP Unit, is the Assistant United States Attorney who is prosecuting the case. Trial Attorneys True Rowan and Rex Young from the Department of Justice's Office of International Affairs also substantially assisted in the prosecution.
A copy of this press release and related court filings may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov (click on the link for "to retrieve documents from the court").
Judges' calendars with schedules for upcoming court hearings can be viewed on the court's website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Christopher P. Sonderby, Chief of the CHIP Unit, at (408) 535-5037, or Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.
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