Report: OC and Film Piracy

Organized crime group and film piracy have a “broad and continuing connection,” according to a report released by a Virginia-based think tank last week.

High profits and low penalties are behind organized crime’s interest in pirate DVDs, according to the nonprofit RAND Corporation’s report. financed by the Motion Picture Association. Reuters had the story:

Crime syndicates have become involved in the entire supply chain of illegal films, from their manufacture to their street sales, as piracy takes its place alongside such criminal activities as drug trafficking, money laundering, extortion and human smuggling.

"Given the enormous profit margins, it's no surprise that organized crime has moved into film piracy," said Greg Treverton, the report's lead author and director of RAND's Center for Global Risk and Security. "The profits are high, and penalties for being caught are relatively low."

Peddling heroin and cocaine brings chump change compared to the profits criminals can make from pirating films. A pirated Malaysian DVD costs 70 cents to make and sells in London for $9, more than a 1,000 percent markup – three times more than the markup on Iranian heroin.

RAND also noted three cases of film piracy benefiting terrorist groups: The IRA, India’s D-Company and a South America-based DVD pirate whose fundraising efforts apparently earned him a thank-you note from Hezbollah.

The LA Times, however, is not buying the terrorism link, mostly because the study was funded by the international arm of the Motion Picture Association of America (MPAA). The organization, writes the Times’s entertainment blogger…

…in addition to not exactly being an objective source, has a long track record of crying wolf when it comes to piracy claims. (In 2005, for example, an MPAA study that made headlines with its claim that 44% of Hollywood's piracy losses came from college students illegally downloading movies turned out to be full of wildly inflated numbers, as this 2008 story revealed.)

The post, written by Ben Jones, points out that the study acknowledges using the terms "piracy" and "counterfeiting" interchangeably, although they often mean totally different things: "Piracy in this context tends to refer mostly to digitally representable items, while counterfeit goods can run the gamut from aircraft parts to cigarettes." It also questions the actual evidence linking some of the crimes to piracy. And I have to admit that some of the evidence seems, well, shaky, especially in Rand's strangely melodramatic account of 21 illegal Chinese immigrants who "drowned in the rising tide of Morecambe Bay while harvesting shellfish at night in treacherous waters." Exactly how is this linked to DVD piracy? Well, according to Rand, 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."

At any rate, RAND recommends that countries end piracy by spending more money and expending more man-hours, and by adopting tougher penalties for pirates.

ID Theft, Russia, U.S. and Fear

Here’s a case from the FBI that shows how an international identity-theft crime ring works.

A certain Mikhail Tuknov in San Diego obtained a number of debit card numbers and PINs from sources in Russia, and passed them to an associate in the Dominican Republic, who made up new debit cards using the information. The cards were sent to New York criminal friends, who then withdrew cash using the cards. According to the FBI:

The proceeds were sent by a variety of means to the Russian sources who paid Mr. Tuknov his commission and sent new numbers to him to generate more cash. Mr. Tuknov admitted that between August 2005 and March 2006, he moved approximately 1044 fraudulent debit card numbers and 1045 related PINS to his associates, resulting in losses to the issuing banks of approximately $371,000.00.

Just one day after Tuknov entered his guilty plea, a senior Russian official told businesses in Western Europe that they had “nothing to fear” from Russian organized crime.

Russian deputy prime minister Dmitri Kozak, visiting Ireland as part of the largest Russian trade delegation to that country in 10 years, said the Russian government has done a lot to address the problem.

Serbian Police Arrest 35 in Sting

Serbian police Monday arrested 35 people – including 18 policemen – in connection with a smuggling ring operating between Serbia and Kosovo, reported Serbian radio-television B92.

Police say they were smuggling oil, alcohol and other excise products across the administrative boundary with Kosovo.

The suspects crossed the administrative line in the Ground Safety Zone (GSZ) toward the municipality of Raška in order to avoid customs, while they forged documents for the goods they transported to lower their value. As they crossed the boundary, they communicated via radio, MUP has revealed.

The smugglers are believed to have bribed the policemen– who were also arrested today – ahead of crossing the line.

Police directorate head Milorad Veljovic said the operation was part of Serbia’s attempt to stamp out organized crime, something that President Boris Tadic trumpeted last week at both regional conferences he attended. At a business forum at a popular Serbian ski resort, he warned the “world of crime” that Serbia was about to get tough, and he told a regional border security conference that Serbia would be undertaking the broadest and most complex action against organized crime of the past 10 years.

UN Vacancies Weaken Corruption Probes

Vacant job posts at the UN’s inspector general’s office have left the agency without the manpower to investigate corruption and other malfeasance, reported the Washington Times last week.

According to an internal audit made available to The Washington Times, about 80 jobs - 25 percent of the staff in the Office of Internal Oversight Services (OIOS) - have not been filled. The vacancies include several senior investigative posts.

"The committee's main concern is that the high vacancy rate within [OIOS] will have an adverse impact on the capacity and ability of the office to accomplish its program of work," wrote the auditors, members of the U.N. Independent Audit Advisory Committee (IAAC).

The auditors expressed "significant concern" that there is no permanent director of the Investigation Division, which has inherited 175 procurement-related cases from a recently shuttered unit, the U.N. Procurement Task Force, that reviewed contracts for the purchase of goods and services. That was on top of several hundred other open cases being probed by the OIOS.

Italy Mob News

Italian anti-mafia prosecutors last week urged Australia’s Federal Police to re-open a Rome office they shuttered in 2002, saying that Italian organized crime links to Australia were strong enough to warrant more official cooperation.

Last month, the AFP launched a fresh inquiry into allegations that the Liberal Party had accepted up to $100,000 in donations from Mafia-linked businessmen to help alleged Calabrian crime figure Francesco Madafferi get a visa to stay in Australia. Madafferi was arrested last year in connection with a syndicate accused of involvement in the world's largest importation of ecstasy into Melbourne in 2007.

The Rome AFP office was relocated to Belgrade in Serbia in 2003 and was still expected to cover Italy, even though it was not staffed with Italian speakers.

In other international mafia news, Spanish authorities arrested yet another suspected Calabrian mafia don last week. Guiseppe Utzeri, 48, is suspected of involvement in a large drug trafficking operation in Morocco.

Corruption Round-up

Spain’s conservative opposition was named and shamed in a corruption scandal last Friday, after a judge formally named senior party officials suspected of taking bribes. Baltasar Garzon identified Valencia’s regional government head Francisco Camps as one of a dozen party members suspected of taking “gifts” from businessmen who also gave donations to the party.

In Israel, police recommended last week that outgoing Prime Minister Ehud Olmert be slapped with a third graft charge, after the authorities announced they would indict Olmert on two other charges. The anti-fraud unit recommended that Israel’s attorney general indict Olmert for fraud and breach of trust for allegedly granting preferential treatment to a factory represented by one of his friends. Olmert has insisted he is innocent in this investigation, as well as in an investigation of his alleged double-billing of travel expenses and his alleged acceptance of cash-filled envelopes from an American businessman.

And in North America, the president of Mexico, hit by a drug-violence explosion, told AFP last week that corruption in the United States is fueling the drug trade.

"The main cause of the problems associated with organized crime is having the world's biggest consumer next to us," (President Felipe) Calderon said in an interview with AFP.

"Drug trafficking in the United States is fueled by the phenomenon of corruption on the part of the American authorities," he said, calling on US President Barack Obama to step up the fight against drugs in his own country.