BALTIMORE – Naveed Sheikh, 32, of Baltimore, pleaded guilty today to conspiring to and infringing copyrights by illegally reproducing and distributing more than 1,000 copyrighted commercial software programs, with a total value of more than $4 million. The investigation was led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).
According to Sheikh's guilty plea, from February 2003 to June 2008, Sheikh conspired to infringe copyrights by reproducing and distributing more than 1,000 copyrighted commercial software programs worth $4 million. Sheikh created multiple websites through which the infringing software was sold. Sheikh advised purchasers that the programs offered for sale were not legal because they were copies of original software programs or "cracked" versions and could not be registered with the legitimate companies that developed the software programs and held copyrights covering the software. Sheikh rented computer server space in Scranton, Pa., and hosted the websites with the infringing software, on computers in Scranton and at his home in Bel Air, Md.
Sheikh advised purchasers that software programs could be mailed to purchasers on compact discs and downloaded from the Internet. Sheikh requested that purchasers send money orders for infringing software to a P.O. Box he maintained in Towson, Md. Sheikh also permitted customers to pay for infringing software through credit card charges and electronic fund transfers. In order to process the electronic payments, Sheikh and his co-conspirators used the credit card processing accounts for a defunct business previously owned by Sheikh's family and caused monies from the software sales to be deposited into accounts previously associated with the business. Sheikh did not report the income from the copyright infringement scheme on his tax returns. During the time of the conspiracy, Sheikh used services such as Western Union to transmit money outside the United States, particularly to Pakistan.
Sheikh recruited and compensated co-conspirators, directed the actions of other co-conspirators, obtained infringing copies of software that were used for distribution, and planned and organized the activities of the conspiracy. Some of the individuals who worked for him were located overseas and could assist with overnight projects. Sheikh and other co-conspirators posed as other individuals when corresponding with customers by email. The copyrighted works copied and sold illegally included Microsoft Office, Microsoft Money 2006 Small Business, Adobe Acrobat, Adobe Photoshop, Adobe after Effects Pro 7.0, Veritas Netback Up Pro 5.1, Solid Works Office 2000 Premium, Quicken Premier Home and Business 2006, Apple Mac OSX Panther 10.3, and Microsoft Windows XP Professional with SP2.
In meetings with federal prosecutors and special agents during the course of the investigation, Sheikh made numerous false statements in order to obstruct the investigation. For example, Sheikh claimed that he had rented computer space to another individual, whom Sheikh believed was selling computer training programs. Sheikh falsely said that he did not learn that this individual was selling copyright infringed software until 2008. Sheikh further claimed that he had recorded phone conversations with this individual in an effort to assist the government's investigation. Through his attorney, Sheikh provided fraudulent recordings that he created of fake conversations with the individual. During the fall of 2010, the government engaged in plea negotiations with Sheikh. In November 2010, shortly before the deadline for Sheikh to reach an agreement with the government or be charged, Sheikh left the United States to Pakistan. When he re-entered the U.S. in January 2012, Sheikh was carrying electronic media containing evidence that he and his co-conspirators were responsible for the sales of infringing software.
As part of his plea agreement, Sheikh will be required to forfeit $4 million.
Sheikh, who is detained, faces a maximum sentence of five years in prison and a $250,000 fine for the conspiracy and for each count of copyright infringement at his sentencing Feb. 19, 2013 at 10:00 a.m. before U.S. District Judge Richard D. Bennett.
The investigation was conducted by HSI Baltimore; the Federal Bureau of Investigation and the U.S. Postal Inspection Service, Washington Division with the assistance of the Business Software Alliance.
The case was prosecuted by Assistant U.S. Attorneys Harry M. Gruber and Martin J. Clarke.