Three men sentenced for multi-million pound intellectual property fraud

Three men have been sentenced for providing illegal access to copyrighted content such as films, music, books and games which cost the industry more than £2.5 million pounds.

The men were sentenced on Tuesday 20th June at Inner London Crown Court following a four year investigation by the City of London Police and intellectual property protection organisation FACT.

Eric Brooks, 43, from Bolton, Mark Valentine, 44, from Manchester and Craig Lloyd, 33, from Wolverhampton, have all have been sentenced to the following for Conspiracy to Defraud the entertainment industry:

Brooks was sentenced to 24 months, suspended for 12 months and ordered to complete 140 hours of unpaid work.

Valentine and Lloyd were each given 18 months, suspended for 12 months and ordered to complete 80 hours unpaid work.

The trio, led by Brooks, had been operating a server hired from a company in the Netherlands for eight years. The server contained over 100,000 files of films, music, games, software and e-book files which they made available to users for a fee. Users paid varying fees dependant on download speed or amount of data downloaded and would make payment through PayPal accounts or direct bank transfer.

Their criminal activity was first identified by FACT in February 2011, who launched an investigation which was then referred to City of London Police in March 2012.

On 4 July 2012 officers from City of London Police and FACT raided Brooks’ house in Bolton where he was arrested. A range of computer equipment was seized which detailed extensive evidence of chat logs and emails revealing Brooks was running the server having rented the space from a company in the Netherlands and that he had been receiving a high number of payments via PayPal. A spreadsheet on his computer revealed details of hundreds of users, all of which discovered Brooks’ services online via dedicated forums.

Enquiries with PayPal later revealed that he had made in excess of £500,000 in the last eight years from his criminal business and had in turn defrauded the film and TV industry alone of more than £2.5 million. As his criminal enterprise affected not only the film and TV but the wider entertainment industry including music, games, books and software it is thought that he cost the wider industry an amount much higher than £2.5 million.

Officers also searched the houses of Valentine, also on the 4 July 2012, and Lloyd a day later. Computers were seized from both addresses and it was found that both had been sub-letting server space from Brooks so that they too could profit from offering access to the same copyrighted material. They too had used PayPal as a means of taking payment and had earned thousands of pounds from their criminal actions; Valentine gaining £34,000 and Lloyd making over £70,000.

The trio were charged on 15 July 2016 and subsequently all pleaded guilty before trial. They will now be subject to a confiscation hearing, for which a date has not yet been fixed, in order to obtain any assets which they may have gained through the proceeds of crime.

Detective Constable Chris Glover who led the investigation for the City of London Police said “The success of this investigation is a result of co-ordinated joint working between the City of London Police and FACT.

“Brooks, Valentine and Lloyd all thought that they were operating under the radar and doing something which they thought was beyond the controls of law enforcement

“However what today has shown is that activity of this kind is illegal and most definitely has its consequences. Brooks, Valentine and Lloyd will now have time in prison to reflect on their actions and the result should act as deterrent for anyone else who is enticed by abusing the internet to the detriment of the entertainment industry”.

 Kieron Sharp, Chief Executive of FACT, said: “Today’s sentencing should send a strong warning to anyone involved in piracy; this is a crime which is taken very seriously and the repercussions can be severe.

“These individuals exploited the works of the creative industries for their own financial gain, pocketing hundreds of thousands of pounds. However, the harm to the industry was far greater as it reached the millions. There are so many people behind the scenes of our favourite films and shows such as set designers, make-up artists and electricians. If we let intellectual property crimes like this continue, the livelihoods and future of these people’s careers could be in jeopardy.

“We would like to extend our thanks to the City of London Police for partnering with us in this investigation and commend the hard work by their officers in achieving today’s successful result.”

Sarah Place, from the Crown Prosecution Service Specialist Fraud Division, said: “These men charged internet users for access to vast numbers of films, games, music and books over which they had no copyright whatsoever.

“Eric Brooks made more than £500,000 from his fraudulent behaviour. The actions of Brooks and his co-defendants potentially denied the entertainment industry millions of pounds of income.

“The CPS worked closely with the police and copyright authorities to build a strong case against the men, who all entered guilty pleas to the charges against them.”

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