San Francisco Electronic Crimes Task Force Agents in Bangkok, Thailand The United States Attorney’s Office for the Northern District of California and the San Francisco Electronic Crimes Task Force, led by agents from the United States Secret Service and U.S. Postal Inspection Service, announced that Maksym Kovalchuk, 25, of Ternopil, Ukraine, was arrested Tuesday evening in Bangkok, Thailand, on a criminal complaint filed in San Jose charging him with criminal copyright infringement in violation of 18 U.S.C. § 2319(a); trafficking in counterfeit goods in violation of 18 U.S.C. § 2320; money laundering in violation of 18 U.S.C. § 1956; and possession of unauthorized credit card information in violation of 18 U.S.C. § 1029. The maximum statutory penalty for each violation of 18 U.S.C. § 2319(a) is 5 years imprisonment and a fine of $250,000; 10 years imprisonment and a $2 million fine for each violation of 18 U.S.C. § 2320; 10 years imprisonment and a $250,000 fine for each violation of 18 U.S.C. § 1029; and 20 years imprisonment and a $500,000 fine for each violation of 18 U.S.C. § 1956. The Royal Thai Police, with the assistance of Secret Service agents and Postal Inspectors, arrested Kovalchuk as he snacked at an ice cream parlor in downtown Bangkok. Agents had tracked Kovalchuk to Bangkok from his native Ukraine. A criminal complaint alleges that, since at least December 2000, Kovalchuk marketed and sold counterfeit software through websites such as cdservice.org, your-cds.org, gold-cds.org, and neocds.com, as well as through eBay auctions. Products offered in this manner included valuable software titles owned by companies such as Autodesk, Microsoft Corporation, and Macromedia, which were generally offered for sale at a mere fraction of their actual retail values. Kovalchuk allegedly shipped some counterfeit software bearing counterfeit trademarks and logos of the software products, while shipping other products simply as CDs without any manuals, registration papers, or other documentation. The retail value of the infringed products allegedly exceeds $3 million dollars.
To field and respond to orders for pirated products, Kovalchuk allegedly communicated with buyers under the guise of Web-based email accounts in the names of online aliases. Kovalchuk then caused payments for the counterfeit software to be made to numerous intermediaries in the United States and Eastern Europe -- including both individuals and online credit card processing services . who allegedly forwarded a portion of the sale proceeds to Mr. Kovalchuk.
A complaint simply contains allegations against an individual and, as with all defendants, Kovalchuk must be presumed innocent unless and until convicted.
The United States Department of Justice has initiated formal extradition proceedings against Kovalchuk in Thailand. The prosecution is the result of a two-year investigation by agents from the San Francisco Electronic Crimes Task Force. More information concerning the SFECTF can be found at www.ectaskforce.org. The United States Embassy in Thailand and the authorities from Thailand, including the Royal Thai Police, also substantially assisted in the apprehension of Mr. Kovalchuk. The investigation was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the United States Attorney’s Office. Christopher P. Sonderby is the Assistant United States Attorney in the CHIP unit who is prosecuting the case. A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can. All press inquiries to the U.S. Attorney’s Office should be directed to Assistant U.S. Attorney Ross Nadel, Chief of the CHIP unit, at (408) 535-5035, or Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.
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