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Copyright Cases - U.S. v. Ponce de Leon (D.D.C.)

June 23, 2005

Department Of Justice
U.S. AttorneyDistrict of Columbia
Judiciary Center
(213) 894-6947
555 Fourth Street, NWWashington, D.C. 20530
Public Affairs
Channing Phillips (202) 514-6933

Texas man pleads guilty to felony copyright infringement for selling more than $1 million of copyright protected software and video games over the Internet

Washington, D.C. - United States Attorney Kenneth L. Wainstein, Acting Assistant Attorney General John C. Richter, U.S. Department of Justice, Criminal Division, Assistant Director in Charge Michael A. Mason, FBI Washington Field Office, and Special Agent in Charge Allan Doody, U.S. Department of Homeland Security, Immigration and Customs Enforcement, announced that Dashiell Ponce de Leon, 26, of Richmond, Texas, pleaded guilty yesterday before the Honorable Gladys Kessler, United States District Court Judge, to a one-count Information charging Criminal Copyright Infringement, in violation of 18 U.S.C. § 2319(b)(1) and 17 U.S.C. § 506(a)(1) and (b), in connection with his illegal Internet sales of over $1 million of copyright protected software and video games from web sites he owned and operated. Ponce de Leon faces a statutory maximum sentence of 5 years incarceration, a $250,000.00 fine, a three-year term of supervised release, and an order to pay restitution. Under the federal sentencing guidelines, the defendant faces a likely sentencing range of 46 to 57 months of incarceration. In addition, a provision of the plea agreement in this case requires Ponce de Leon to forfeit to the United States all of his computer equipment, peripherals, and all digital media containing infringing copies of copyright protected works which were seized by federal agents from residences and his business pursuant to duly authorized search warrants. Sentencing is scheduled for October 6, 2005.

According to information presented to the Court by Assistant U.S. Attorney Sherri L. Schornstein, from approximately December 1, 2002, through May 2003, Ponce De Leon owned and operated the web sites: "Powerbackups Ultimate Software Backup Resource " ("www.Powerbackups.com") and "Softworks #1 Software Backup Service" ("www.Softworks.com"). From these web sites, he advertised for sale at prices far below the manufacturers' suggested retail prices, over 200 software and video game titles, all of which were protected by copyright. Legitimate copies of the software programs and games listed for sale on the two web sites had retail values ranging from $30.00 to over $26,000.00 per copy.

Neither defendant Ponce De Leon nor any one doing business under the named web sites were authorized by the copyright owners to reproduce, sell or distribute the software or video game titles advertised for sale on the web sites. Ponce de Leon obtained illegal copies of the software programs offered for sale on his web sites by downloading the illegal, "pirated" software programs from various "warez" web sites. Warez web sites are Internet locations that offer software and other programs which have been illegally manipulated to defeat or bypass copyright protection programming.

Ponce de Leon advertised on his web sites that the only difference for a purchaser buying software from his web sites versus in a store was that the purchaser would not receive the box and the manual. Both web sites instructed purchasers that payment for the software programs should be made through PayPal. Once an order was received, Ponce De Leon reproduced the pirated software programs and video games, packaged the CDs for distribution, and mailed them to the customers. Numerous titles were purchased by a Special Agent of the Federal Bureau of Investigation, acting in an undercover capacity, and shipped by Ponce de Leon to the District of Columbia and elsewhere, including Macromedia Flash MX (retail value $499.00), Microsoft Office XP Premium (retail value $579.00), and Microsoft Windows XP Pro (retail value $299.00), Adobe Photoshop 7 (retail value $609.00), Autodesk Building Systems (retail value $4,016.65), Lightwave 6 (retail value $2,495.00), MS Office XP Premium (retail value $579.00), and NBA Live 2003 (retail value $39.99), Adobe Golive 6 (retail value $399.00), Lightwave 6 (retail value $2,495.00), Mastercam 8 (retail value $12,900.00), Macromedia Studio MX (retail value $899.00), and Macromedia Flash 5 (retail value $499.00),Autodesk Autocad 2004 (retail value $3,750.00), Harry Potter 2 (retail value $34.99), Lightwave 7 (retail value $795.00), MS Windows 2K Datacenter (retail value $26,000.00), and MS Office XP 2003 (retail value $579.00).

From approximately January 2002 through May 2003, Ponce De Leon received via Paypal and converted to his own benefit approximately $192,000.00 in payments from persons purchasing the pirated software and video games, described above. The total retail value of all pirated sales for the titles reflected in the undercover purchases and other identical title sales as documented in customer payment records totaled $1,154,395.85.

In announcing the guilty plea, U.S. Attorney Wainstein, Acting Assistant Attorney General Richter, Assistant Director in Charge Mason, and Special Agent in Charge Doody commended the work of FBI Special Agent Stephen K. Schmidt and Supervisory Special Agent Christopher W. Hinkle, ICE Senior Special Agent Michael R. Godfrey and Special Agent Dawn Gabel, and the staff of the U.S. Attorney's Office, including Legal Assistant Lisa Robinson and Assistant U.S. Attorney Sherri L. Schornstein and Christopher Merriam, Trial Attorney, U.S. Department of Justice Computer Crime and Intellectual Property Section, who are prosecuting the case. They also thanked the following industry trade associations for their assistance: Business Software Alliance, Entertainment Software Association, and the Software and Information Industry Association.



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