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Feds Bust NY Music Piracy Ring

A New York operation accused of pirating music to the tune of millions of dollars was raided this week by U.S. Secret Service agents and record industry investigators in what they called the largest ever seizure of music piracy equipment in the U.S.

About 35,000 pirated CDs, 10,000 DVDs and the equivalent of 421 CD burners were confiscated, the Recording Industry Association of America (RIAA) said in a statement. Three people were arrested in the Monday raid in an industrial complex in the New York City borough of Queens and charged with trafficking counterfeit labels, criminal copyright infringement and trademarket counterfeiting, RIAA said.

The RIAA trade group, representing major recording labels, said the piracy operation had the potential to cost the industry an estimated $90 million annually. About 25 percent of the product seized was Latin music, the RIAA said.

The RIAA said the piracy operation was the largest supplier of pirated music to individual vendors, retail locations, and distribution centers in lower Manhattan, churning out illegal product around the clock with an estimated capacity of at least 6 million pirated discs each year.

Officials also seized copiers and other equipment and raw materials used in the manufacturing process.

Major recording labels like Bertelsmann AG’s BMG, EMI Group Plc,AOL Time Warner Inc,Vivendi Universal and Sony Corp. largely attribute a protracted slump in sales to the popularity of unauthorized online file-sharing and CD burning.

“This is a major blow to the music pirates who were robbing record companies, artists, legitimate retailers and countless others in the industry of millions of hard-earned dollars,” Frank Creighton, executive vice president and director of the RIAA’s Anti-Piracy Unit, told Reuters.

“We conservatively estimate that we lose $300 million domestically and $4.2 billion worldwide to counterfeit CD burning,” Creighton said during an interview, noting these figures do not include the industry’s additional losses from unauthorized online file-sharing.

Creighton said the RIAA’s anti-piracy unit would conduct further raids during the holiday season.

“The holiday season and the fourth quarter are critical for our industry, which is seeing a decline for the second year in a row for the first time in at least a decade. We’re throwing everything we can at this in an effort to salvage the fourth quarter sales,” said Creighton.

Creighton said RIAA’s anti-piracy unit also works with other U.S. government agencies, such as the FBI, Customs and Postal Service inspectors.

With CD technology, pirating such wares is now faster, easier and more portable than manufacturing bulkier pirated counterfeit cassettes, which were more popular a few years ago.

Creighton said the CD pirates can often close up shop and move quickly if they suspect they are being investigated.

“The ability to move these operations quickly has created a cottage industry all over,” he said during the interview.

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