Saturday, May 1, 2010

Copyright Infringement Music Piracy Case - Part 3 (The Race to Plea)

Once the music piracy federal criminal conspiracy copyright infringement case began to move through the United States District Court for the Eastern District of Virginia, the "race to the plea line" began between the various defendants. They hoped to obtain a more lenient treatment in exchange to assisting the government in securing music piracy conspiracy copyright infringement convictions against the other defendants in federal court in Virginia. Only two people accused of allegedly being members of Rabid Neurosis (RNS) did not plead guilty. On of them was Domingo Rivera's client, Adil R. Cassim, who the Prosecution alleged was the leader of RNS.

After the guilty pleas of these defendants were accepted by the United States District Court for the Eastern District of Virginia, the defendants were scheduled for sentencing. As part of the sentencing process, the defendants and the government wrote various briefs with hope of persuading the Court to apply the version of the guidelines that they argue were applicable to the music piracy conspiracy copyright infringement case in the United States District Court for the Eastern District of Virginia.

The sentencing positions the the prosecution filed for the various music piracy cases were somewhat similar. The government's argument included:

As the Court is aware, the trial of the Defendant’s co-conspirators, which had been scheduled for November 4, 2009 in this District, was transferred by this Court to the Southern District of Texas, Houston Division, after the Court sua sponte invited a motion to transfer by the co-conspirators under Federal Rule of Criminal Procedure 21(b). That trial in Houston (which had originally been scheduled to start on January 19, 2010) has been delayed at the request of the defense, who has also re-filed all the pre-trial motions that it had previously submitted in this District. Due to a need to re-litigate these issues and possibly have additional evidentiary hearings, a new trial date has not yet been set but is expected in the next few months. The timing of the new trial is important since the government intends to call Defendant as a witness at trial. In the event he is called as a witness, the government is likely to file a Motion for a Downward Departure under Federal Rule of Criminal Procedure 35 when his truthful testimony is complete. Given that such a motion for a downward departure is likely to be requested, we would ask the Court to sentence the Defendant to the bottom of the properly calculated advisory sentencing guidelines range, which is 57 months of incarceration, and delay his surrender date until after he has had a chance to testify at the trial of his co-conspirators in March or early April of 2010.

As the above text demonstrates, the defendants who pleaded guilty in the Eastern District of Virginia during this conspiracy copyright infringement case. The government's argument continued:

As set forth in the Presentence Report and the Statement of Facts, the Defendant was a member of an Internet pre-release music group called “Rabid Neurosis” or “RNS.” The Defendant has acknowledged that he did willfully enter into an agreement with one or more individuals for the express purpose of unlawfully reproducing and distributing copyrighted materials via the Internet. Defendant also acknowledges that, through the acts of himself and others in the conspiracy, RNS caused the reproduction and distribution over the Internet of copyrighted works with a total infringement amount of more than $1,000,000 and less than $2,500,000. This Defendant was a particularly key member of the conspiracy, since for many years he provided the group with albums that were not yet commercially available. The Defendant worked at the North Carolina compact disc production facility that made the music CDs that the Defendant electronically provided to the leader of RNS. He trafficked in this stolen intellectual property, contrary to the express written agreement he had with his employer. In sum, the Defendant and his co-worker (who introduced him to RNS) were critical to the rise of RNS to the forefront of Internet music piracy that resulted in far more than $1,000,000 in loss.

Defendant pled guilty to a single count criminal information of conspiracy to commit copyright infringement, in violation of Title 18, United States Code, Section 371. On that date, the Court accepted the Defendant’s plea of guilty to the indictment. In this case, there was both an agreed-upon statement of facts and a plea agreement. In the statement of facts and before the Court, the Defendant admitted his unlawful conduct. Based on this record, the Presentence Report properly calculated that the Adjusted Offense Level for the Defendant’s conduct as 28: Sentencing Guideline 2B5.3(a) provides for an offense level of 8 for criminal copyright infringement; Guideline 2B5.3(b)(1)(I) provides an additional sixteen-level upward adjustment for an offense with an infringement amount greater than $1,000,000, but less than $2,500,000; Guideline 2B5.3(b)(3)(A) provides an additional two-level upward adjustment for an offense involving the uploading of infringed items; and Guideline 2B5.3(b)(2) provides an additional two-level upward adjustment for an offense involving the reproduction/distribution of at least one work being prepared for commercial distribution.

In the event that the government files a motion with the Court for a Section 3E1.1(b) one-level reduction and assuming the Defendant receives the two-level reduction for acceptance of responsibility, the Defendant will have an Offense Level Total of 25. The Presentence Report further calculates that the Defendant has a Criminal History Category of I. With an Offense Level Total of 25 and the Defendant’s Criminal History Category of I, the advisory Sentencing Guidelines range for the Defendant, in absence of credit for his cooperation, is properly calculated as 57-60 months.

The Supreme Court has declared that “[a]s a matter of administration and to secure nationwide consistency, the Guidelines should be the starting point and the initial benchmark.” Gall v. United States, 128 S. Ct. 586, 596 (2007). The advisory Sentencing Guidelines, therefore, remain an indispensable resource for assuring appropriate and uniform punishment for federal criminal offenses. This Court must also consider all of the sentencing considerations set forth in Section 3553(a). Those factors include: (1) the nature and circumstances of the offense and the history and characteristics of the Defendant; (2) the need for the sentence imposed to reflect the seriousness of the offense, to promote respect for the law, and to provide just punishment for the offense; (3) the need to afford adequate deterrence to criminal conduct, and to protect the public from further crimes of the Defendant; (4) the need to provide the Defendant with educational or vocational training, medical care, or other correctional treatment in the most effective manner; (5) the guidelines and policy statements issued by the Sentencing Commission; (6) the need to avoid unwarranted sentence disparities among defendants with similar records who have been found guilty of similar conduct; and (7) the need to provide restitution to any victims of the offense. 18 U.S.C. § 3553(a). B. A Sentence at the Bottom of the Sentencing Guidelines Would Be Reasonable and Appropriate in Light of Recent Supreme Court Rulings. The government’s recommendation of a bottom of the advisory sentencing guidelines range is based in part on the fact that such a sentence properly reflects the accumulated wisdom and expertise of the Sentencing Commission, and serves the vital goal of uniformity and fairness in sentencing. While, to be sure, “[i]n accord with 18 U.S.C. § 3553(a), the Guidelines, formerly mandatory, now serve as one factor among several courts must consider in determining an appropriate sentence,” Kimbrough v. United States, 128 S. Ct. 558, 574 (2007), it remains the case that “the Commission fills an important institutional role: it has the capacity courts lack to ‘base its determinations on empirical data and national experience, guided by a professional staff with appropriate expertise,’” id. at 574 (quoting United States v. Pruitt, 502 F.3d 1154, 1171 (10th Cir. 2007) (McConnell, J., concurring)). Thus, the Supreme Court recently stated that “[w]e have accordingly recognized that, in the ordinary case, the Commission’s recommendation of a sentencing range will ‘reflect a rough approximation of sentences that might achieve § 3553(a)’s objectives.” Kimbrough, 128 S. Ct. at 574 (quoting Rita v. United States, 127 S. Ct. 2456, 2465 (2007)). C. A Sentence at the Bottom of the Sentencing Guidelines is Reasonable In Light Of the Serious Nature Of Defendant’s Criminal Conduct. There can be no question that the Defendant engaged in serious crimes that harmed individuals and businesses (including his former employer); in fact, the total infringement amount attributable to the conspiracy of which the Defendant was a member is well over $1,000,000 (the parties have agreed to cap the amount at $2,500,000). In particular, the Defendant violated the trust of his former employer, the plant that printed compact discs for several music labels; he traded the intellectual property that was entrusted to his employer in order to get access to thousands and thousands of other copyrighted works. His breach at a time when no legitimate copies of the works he traded were available harmed the music industry in incalculable ways. Given the nature of the Defendant’s criminal conduct and the impact and the harm to the public, the United States believes that an appropriate sentence at this time would fall at the low end of the advisory Sentencing Guidelines. RNS was the most infamous and successful Internet music piracy group in history. It procured thousands of albums and made them available illegally on the Internet. It procured albums from production plants, from radio stations, and from retail establishments prior to their commercial release.

RNS utilized serious security measures and took other steps to avoid detection by law enforcement, including using encryption on their chat sessions, locating many of its servers overseas, using a referral system that reduced the chances of infiltration, breaking of copyright protections on encoded discs, timing events to reduce the chances of exposing group members, and comparmentalizing tasks within a hierarchal organization. Rather than operating as a group of friends interested in music, it operated as a business, and, rather than money, that business was designed to get access for its members of every copyrighted work that ever existed. While individual infringement may be of limited harm (such as making a copy of an album for a next door neighbor), the collective effect of RNS’s activities were felt around the world. News of a single album by an artist being released on the Internet in digitally-perfect form prior to its commercial release resulted in hundreds of thousands of downloads by the public, and a potential loss of millions to the artist and the recording label. Simply put, the actions of the group were not a hobby; it was a group of thieves on a massive scale.

The activities of this group had such a wide ranging impact on the recording industry that, eventually, the music labels started discussing the likely impact of illegal RNS releases of their commercial albums prior to their actual theft.

The vastness of the impact of the harm makes it nearly impossible for the government or the Court to determine all the victims of RNS’s conduct and to calculate restitution for them. As such, the government has not sought restitution from the Defendant and his co-conspirators. It is worth noting, however, that it is because the harm is so large that such a calculation of restitution is daunting, rather than it being a factor to be consider in the defendants’ favor. The conduct of the Defendant, his co-conspirators, and intellectual property thieves around the world must be deterred. A sentence at the bottom end of the advisory Sentencing Guidelines would provide that deterrence. To depart below the guidelines range would send a clear message that the Court does not take the massive theft of copyrighted works seriously enough, since RNS was the most pervasive and infamous Internet piracy group in history. It 1 should make no difference from a sentencing perspective that this theft took primarily took place over the Internet, rather than a physical space. Theft is theft.

With respect to 18 U.S.C. § 3553(a)(6), which deals with sentencing disparities, the Government would note for the Court that no Internet piracy case is truly comparable with the RNS conspiracy. Technically, as indicated in the Pre-Sentence Report, there are a number of prior cases that involved similar conduct (“Apocalypse Production Crew” and “Drink or Die”) but none of them were similar in scope and impact to the RNS conspiracy. From simply a numbers standpoint, members of APC, who with exception of one individual who went to trial, agreed to a valuation of $30,000 to $70,000 of the conspiracy’s conduct. The one member of APC who went to trial was given a valuation of $100,000 to $200,000 by U.S. District Judge Liam O’Grady (U.S. v. Barry Gitarts) and was sentenced to 18 months in prison. Here, the agreed-upon valuation is $1,000,000 to $2,500,000, which, according to the sentencing guidelines, should command a significantly higher sentence of imprisonment (which the bottom of the guideline range would accomplish).

Unlike APC, which mostly involved distributing unlawful copies of music that had already been released, RNS was recognized as the world-leader in acquiring copies of pre-release music; that is, music that was not yet commercially available. The reason for a large part of that success was based on the fact that the group had two members, including Defendant, who worked in the music CD production plant in North Carolina. These individuals were able to procure many of the hottest albums of the last decade and provide them to RNS. No other music piracy group had that kind of regular access to pre-release materials. So, also unlike APC, the parties have agreed to the new additional two-point enhancement for pre-commercial works under Sentencing Guideline 2B5.3(b)(2).

Between the higher valuation and the pre-commercial enhancement, the properly calculated offense total under the advisory Sentencing Guidelines for RNS members is more than double that of APC members and the sentences should reflect that reality. Defendant dealt directly with the leader of RNS for years and gave him albums significantly before they were commercially available.

Based on the argument advanced by the government, the prosecution asked the court to sentence some of these defendants to almost 60 months in prison, the maximum possible sentence for a music piracy case based on a conspiracy copyright infringement case.