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HK Customs-US authorities co-operation smashes a transnational piracy syndicate with over HK$300 million worth of crime proceeds restrained (with photos)

     The Hong Kong Customs, to tie in with the worldwide operation of the U.S. Department of Justice and the Federal Bureau of Investigation (FBI), smashed a large-scale transnational cyberlocker syndicate this morning (January 20).  During the operation, Customs officers searched various target locations in Hong Kong, resulting in the seizure of a large number of digital evidence and over HK$300 million worth of crime proceeds restrained.

     In the operation, the Hong Kong Customs mobilised a total of 100 officers from the Intellectual Property Investigation Bureau, Financial Investigation Group, Anti-Internet Piracy Teams and Computer Analysis and Response Team to search 4 target locations, including hotel rooms, company offices and domestic premises in Hong Kong.  Customs officers had also made enquiries with target individuals, including company directors, and detected about HK$330 million worth of crime proceeds of bank savings and security investment. The assets have been frozen in accordance with related ordinances.  The operation is on-going.

     During the investigation, it was found that the hotel rooms rented by the syndicate for office use and rest area were luxury suite rooms, which cost HK$100,000 odd per day.  Besides, the room was equipped with a number of large-scale high-speed servers and large-model TV screens, which are suspected to be in connection with the case.

     Investigation reveals that the cyberlocker has been engaged in infringing activities (e.g. pirated songs, TV dramas and movies) for more than 5 years with earnings more than US$175 million (HK$1.36 billion).  The cyberlocker has set up a network of devices and servers with their operators located in different jurisdictions.  Its main servers are located in the U.S. whereas some registered companies and some bank transactions are in Hong Kong.  Moreover, the cyberlocker bars Hong Kong netizens (using the HK IP address as an identification) from accessing its contents in a bid to hinder investigation by law enforcement agencies.

     The Hong Kong Customs is well aware of the operational mode of the cyberlocker and has been conducting joint investigation with the U.S. FBI in targeting the criminal activities of this syndicate since end 2010.  Given that the operational base, mastermind, syndicate members, related companies and assets of this syndicate involved different places, the Hong Kong Customs and the U.S. authorities have followed up the investigation for more than one year.

     As regards Intellectual Property Right (IPR) infringement over the Internet, the Hong Kong Customs detected 65 cases and seized HK$1.18 million worth of infringing goods, including pirated optical discs, counterfeit bags, leather goods, clothing and computers in 2011 which are similar to that of 2010.  However, there was an increase of infringing activities via the social networks and the number of cases rose from 8 in 2010 to 19 in 2011.

     Targeting the organised and transnational nature of IP infringing activities in the wake of technology development, the Hong Kong Customs will continue to monitor the situation and co-operate with the IPR industry and overseas law enforcement agencies so as to suppress infringing activities effectively.  Moreover, the Hong Kong Customs is planning to set up a $4 million Electronic Crime Investigation Centre (ECIC) which is expected to commission this year.  The ECIC will formulate the strategies and procedures in evidence collection; enhance the enforcement capability and skill of preservation of digital evidence through simulations, experiments and professional training; and conduct researches on online investigation system.

Ends/Friday, January 20, 2012
Issued at HKT 23:32


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