Nine members of a gang alleged to have been involved in a multi-million-dollar counterfeit software scam went on trial on Thursday.
The gang, led by Shanghai native Ma Jingyi, is accused of selling 677,000 pieces of pirated computer software to buyers in the United States at a price of $10.48 million, the Shanghai No 1 Intermediate Prosecutors' Office said.
The men were arrested in July of last year following a joint investigation codenamed "Summer Solstice" that was launched in 2005 by authorities from China and the US.
Ma, 50, pleaded guilty to the charge but denied he had made such high profits, prosecutors said.
He told the Shanghai No 1 Intermediate People's Court that he went to the US in 1993 and co-founded a computer company with an American man named Wu Kai.
At that time, he was known as Ma Kepei. "In 2003, while I was in Shanghai visiting family, our business was raided for selling pirated software," he said.
Wu Kai received a suspended prison term and Ma was indicted on suspicion of distributing about $15 billion worth of pirated Microsoft and Symantec products over the previous two years.
Because of that, he changed his name to Ma Jingyi.
In July 2003, Ma set up three companies in Shanghai, selling software, most of it pirated, to only US buyers, prosecutors said.
Ma hired workers in Shanghai to advertise his cheap software on the Internet and others in the US to process payments and deliver products, prosecutors said.
"Our main customers were firms selling computer hardware and software, and our main product was Symantec's anti-virus program," Ma said.
He said he sold the pirated version for $15. (The authorized version costs about $39.)
In the beginning, he said he bought most of his stock from a man in Los Angeles who identified himself only as Tyen. He paid $5 to $6 per piece.
From December 2003, Ma began to buy from Lu Yi, the second defendant in the case, at 12 yuan per piece, and sold it to Tyen.
In 2006, armed with information from the Ministry of Public Security and the FBI, Shanghai police began to investigate Ma's illegal business activities.
Officers conducted raids in both Shenzhen and Shanghai in July 2007, while at the same time police in Los Angeles conducted 24 searches at illegal distributors.
The Shanghai trial is expected to last for two days.
(China Daily September 5, 2008)