The investigation of the case and the arrests were conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) Washington, D.C.
Gregory A. Cherwonik, 53, of Canandaigua, N.Y., pleaded guilty to one count of conspiracy to commit criminal copyright infringement. Cherwonik faces up to five years in prison, a fine of $250,000 and three years of supervised release.
Cherwonik was indicted April 18 along with three other leading members of the IMAGiNE Group, an organized online piracy group seeking to become the premier group to first release Internet copies of new movies only showing in theaters.
According to court documents, Cherwonik and his co-conspirators sought to illegally obtain and disseminate digital copies of copyrighted motion pictures showing in theaters. Cherwonik admitted that he helped to create a new website for the IMAGiNE Group hosted on a computer server located in France. Cherwonik ordered receivers and recording devices for the purpose of secretly using them in movie theaters to capture the audio sound tracks of copyrighted movies (referred to as "capping"). After obtaining, editing and filtering audio sound tracks and uploading them to servers utilized by the IMAGiNE Group, his co-conspirators used software to synchronize the audio file with an illegally obtained video file of a movie to create a completed movie file suitable for sharing over the Internet among members of the IMAGiNE Group and others. Cherwonik also admitted that the IMAGiNE Group's conduct resulted in a readily provable and reasonably foreseeable infringement amount of more than $400,000.
A co-defendant, Sean Lovelady, pleaded guilty May 8 to one count of conspiracy to commit criminal copyright infringement. Another co-defendant, Willie Lambert, pleaded guilty to the same charge June 22. Charges remain pending against co-defendant Jeramiah Perkins.
Assistant U.S. Attorney Robert J. Krask of the Eastern District of Virginia and Senior Counsel John H. Zacharia of the Computer Crime and Intellectual Property Section in the Justice Department's Criminal Division are prosecuting the case. Significant assistance was provided by the Cyber Crime Laboratory and the Office of International Affairs in the Justice Department's Criminal Division.
This case is part of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force) to stop the theft of intellectual property. Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation's economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to www.justice.gov/dag/iptaskforce.
This investigation was supported by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington. The IPR Center is one of the U.S. government's key weapons in the fight against criminal counterfeiting and piracy. As a task force, the IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public's health and safety, the U.S. economy and our war fighters.