Chinese National Pleads Guilty to Software Piracy in U.S.

By Joel Rosenblatt – Jan 8, 2013 12:01 AM ET

A Chinese national pleaded guilty to U.S. charges that he sold pirated software from American companies including Agilent Technologies Inc. (A)

Xiang Li, 36, admitted yesterday in federal court in Wilmington, Delaware, to one count each of conspiring to commit criminal copyright infringement and conspiring to commit wire fraud, according to court records.

Li and his wife, of Chengdu, China, were accused of running a website called “Crack 99” that sold copies of software for which “access-control mechanisms” had been circumvented, the U.S. Immigration and Customs Enforcement agency said in April when a 46-count indictment against them was unsealed. The pair were charged with distributing more than 500 pirated copyrighted works to more than 300 purchasers in the U.S. and overseas from April 2008 to June 2011.

Prosecutors said the retail value of the pirated software products was more than $100 million, according to a Jan. 4 court filing.

Li faces as long as 25 years in prison at his sentencing, which is set for May 3 before U.S. District Judge Leonard Stark.

Prison Term

Mingli Chen, a lawyer representing Li, said in a phone interview that Li already has spent 1 1/2 years incarcerated and that he will ask the judge to find that his client has served enough time in prison. He also said the judge may impose a prison term of five to eight years.

Chen said the government also agreed to dismiss all charges against Li’s wife, Chun Yan Li, who Chen said is in China.

Xiang Li was arrested by federal agents in June 2011 on an earlier indictment in the case. In April, the U.S. said Chun Yan Li was a fugitive in China. Chen disputed yesterday that she was a fugitive.

David Hall, an assistant U.S. attorney in Wilmington who represented the government in the case, didn’t immediately return a call or e-mail seeking comment after regular business hours yesterday.

The software includes programs made by Santa Clara, California-based Agilent and Canonsburg, Pennsylvania-based Ansys (ANSS) Inc., according to the indictment.

Design Process

An Agilent product intended to speed up the design process for electronic equipment was among the software illegally copied by the couple, according to the indictment. The SystemVue 2009 program sells for $45,000.

Xiang Li’s websites listed prices of $20 to $1,200 for products with retail values of several hundred dollars to $3 million, according to the government.

In connection with the charges, a former National Aeronautics and Space Administration employee pleaded guilty to conspiracy to commit criminal copyright infringement.

Government agents said Cosburn Wedderburn bought more than $1 million in pirated software from the couple’s website.

The case is U.S. v. Li, 10-cr-112, U.S. District Court, District of Delaware (Wilmington).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net;

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net