Film Piracy, Organized Crime, and Terrorism presents the findings of research into the involvement of organized crime and terrorist groups in counterfeiting products ranging from watches to automobile parts, from pharmaceuticals to computer software.

It presents detailed case studies from around the globe in one area of counterfeiting, film piracy, to illustrate the broader problem of criminal — and perhaps terrorist — groups finding a new and not-much-discussed way of funding their activities. Piracy is high in payoff and low in risk, often taking place under the radar of law enforcement.

The case studies provide compelling evidence of a broad, geographically dispersed, and continuing connection between film piracy and organized crime, as well as evidence that terrorist groups have used the proceeds of film piracy to finance their activities.

Counterfeiting is a threat not only to the global information economy, but also to public safety and national security. Cooperation among law enforcement and governments around the world is needed in the battle against intellectual-property theft, and meaningful progress will require increased political will, strong legislation, consistent enforcement, deterrent sentencing, and innovative solutions. The report lays out an agenda of measures.

Increased global intelligence-gathering and sharing is needed to further illuminate the scope and nature of the connections between piracy and organized crime, and policymakers and law enforcement worldwide should reexamine the common but erroneous assumption that counterfeiting is a victimless crime.

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Gregory F. Treverton, Carl Matthies, Karla J. Cunningham, Jeremiah Goulka, Greg Ridgeway, Anny Wong
SAFETY AND JUSTICE PROGRAM and the GLOBAL RISK AND SECURITY CENTER

SUMMARY

• In Italy, a former Mafia boss turned government witness outlined how the Camorra, at times working in cooperation with Chinese and Taiwanese triads, generated millions of dollars from counterfeiting, including film piracy.
• In Malaysia, the Ang Bin Hoey triad has engaged in turf battles to maintain control over lucrative piracy markets, battles that resulted in knife and spear fights; robberies of bystanders, including families at bus stops; and assassinations of rival gang leaders.
• In Britain, 21 illegal Chinese immigrants drowned in the rising tide of Morecambe Bay while harvesting shellfish at night in treacherous waters. The victims had been forced into servitude by a slavemaster whose accomplice was found to have 4,000 counterfeit DVDs, copiers, and other equipment used for film piracy.
• The tri-border area of Brazil, Argentina, and Paraguay has emerged as the most important financing center for Islamic terrorism outside the Middle East, channeling $20 million annually to Hezbollah. At least one transfer of $3.5 million was donated by known DVD pirate Assad Ahmad Barakat, who received a thank-you note from the Hezbollah leader. Barakat was labeled a “specially designated global terrorist” by the U.S. government in 2004.
• In Russia, pirate syndicates are routinely tipped off by corrupt police officials prior to raids and have been permitted to run their businesses on government property and even from prison. Organized-crime figures involved in piracy have been known to resort to violence against rivals. Alleged pirates Ayrat Sharipov and Yevgeny Ladik and antipiracy investigators were murdered, and an attempt was made on the life of the head of the Russian Anti-Piracy Organization.

As these cases indicate, DVD piracy, which has a higher profit margin than narcotics and minimal risks of enforcement, is attractive around the world as an element of criminal portfolios that also include drugs, money laundering, extortion, and human smuggling. The 14 case studies in this report provide compelling evidence of a broad, geographically dispersed, and continuing connection between film piracy and organized crime. ...

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