the movie folks are busy too...
FBI Arrests Chicago Man in Movie Piracy Swoop
Friday January 23 12:33 AM ET
The FBI arrested a Chicago-area man Thursday on charges of criminal copyright infringement and illegal interception of a satellite signal as a result of the bureau's investigation into pirated "screener" videos.
Russell William Sprague, 51, was arrested at his home in Homewood, Ill., a suburb of Chicago, where agents discovered hundreds of Academy screeners for recent and current movies in a search of his residence.
According to an FBI affidavit, most of the screeners were originally sent to Carmine Caridi, a 22-year member of the Academy of Motion Picture Arts & Sciences, who has been sending as many as 60 Academy screeners a year to Sprague for at least the past three years. Sprague supplied Caridi with Federal Express shipping boxes and mailing labels.
In an interview with the FBI last week, Caridi denied receiving any money for the screeners. Caridi said he thought Sprague was a film buff and had no knowledge that Sprague had duplicated the tapes.
"Mr. Caridi has not been charged with anything," FBI spokeswoman Laura Bosley said. "But the investigation is continuing, and additional arrests have not been ruled out."
Caridi could not be reached for comment.
Informed of the arrest, Academy spokesman John Pavlik said he was unaware of the latest developments and had no comment on the situation.
For allowing the tapes out of his possession, however, Caridi could be subject to expulsion from the Academy. In addition, if it were to be proved he knew the screeners had been duplicated, he could be charged with contributory copyright infringement, said studio sources with knowledge of the case.
Sprague is scheduled to make an initial appearance Friday in U.S. District Court in Chicago, Bosley said.
"He'll eventually be extradited to Los Angeles to face charges," she said.
Sprague faces up to $500,000 in fines and up to eight years in prison -- three for copyright infringement and five for illegal interception of satellite signals.
"The meat and potatoes of the case is how many movies were copied and how many times," said Thom Mrozek, a spokesman for the U.S. Attorney's Office in Los Angeles. "The way this thing will shake out is that we'll have to indict him in a few weeks or we'll make a deal with him."
According to an affidavit filed by FBI special agent Bryan DuChene, another FBI agent, Jeffrey Cugno, was contacted this month by David Kaplan, vp intellectual property counsel at Warner Bros. Studios.
Kaplan told Cugno that anti-piracy investigators working with Warners had found illegal copies of "The Last Samurai" and "Mystic River" available for downloading on the Internet.
Because of the hidden security markers, installed by Technicolor, that the studios put on Academy screeners for the first time this year, Warners had determined that VHS tapes of the films had been issued to Caridi.
Ultimately, Technicolor technicians determined that copies of such pirated movies as Warners' "Samurai" and "Mystic," 20th Century Fox's "Master and Commander: The Far Side of the World," Fox Searchlight's "thirteen" and Disney's "Calendar Girls" all could be traced to Academy screeners that had been provided to Caridi.
Caridi, like all Academy members who wished to receive screeners this year, had signed an agreement promising not to allow screeners to be taken outside of his home and office so that they could not be distributed or reproduced.
Interviewed by the FBI in his West Hollywood home Friday, Caridi said, according to the affidavit, that he first met Sprague three to five years ago and that Sprague had asked him if he'd be willing to mail him his Academy screeners.
Since then, Caridi has sent Sprague 30-60 screeners a year, the FBI said. Caridi sent Sprague all of the screeners he received this year, including "Something's Gotta Give" and the aforementioned films.
An FBI search of Caridi's home resulted in the seizure of 36 original Academy VHS screener tapes and two DVD screeners. Caridi also told the FBI of eight other screeners he had received which were at another location, where agents subsequently picked them up.
The search of Sprague's residence Thursday turned up DVD copies of 11 films -- ranging from "Samurai," "Calendar" and "Mystic" to "X2: X-Men United" and "Cold Mountain" -- as well as video duplication equipment, computers and components for the duplication of motion pictures.
According to the FBI, Sprague admitted receiving screeners from Caridi and said that he used the software program Copy Guard Breaker to copy the VHS tapes to DVD and then returned the original VHS tapes and two VHS copies of each to Caridi.
Sprague said that he'd made as many as six duplicate copies of each DVD and distributed them to family and friends. He supplied copies to another friend in exchange for using a FedEx shipping account, the FBI said.
The FBI affidavit does not explain how the films were uploaded to the Internet.
Johnson, the U.S. attorney, said that there was little financial incentive for Sprague to upload the films to the Internet -- if that is what he did -- beyond the simple trading of movies with others.
"There is often a quid pro quo among the Internet piracy community," Johnson said.
"There's no evidence Sprague was duplicating these movies and selling them," he added. "But anything is possible."
Separately, DirecTV filed a civil lawsuit against Sprague in May over his alleged theft of its satellite signal. In 2002, Sprague had been named, along with hundreds of other suspects, in a massive crackdown on equipment that can be used to reprogram satellite television access cards, a method by which pirates illegally get programming for free. Paying customers are issued personally encoded cards with their subscription.
According to an FBI affidavit, six such "loopers" and six DirecTV access boxes were in plain view at Sprague's home when agents conducted their search. One box was connected to a television and had a reconfigured card in it.
Asked whether Sprague might have been burning DVDs with content taken from his illegal satellite TV connections, Mrozek said: "It's kind of separate from the movie thing, but who knows? We'll continue to investigate."
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