Record distributor pleads guilty in Dallas to copyright infringement charges

DALLAS — The owner of a record distribution company that knowingly sold counterfeit Latina music CDs to retailers from its stores/distribution centers in Dallas, Chicago and Phoenix, pleaded guilty Tuesday to federal charges.

This guilty plea was announced by U.S. Attorney John Parker of the Northern District of Texas.  U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) investigated this case.

Arizona resident, Melek Ackay Portillo, 52, who owns Angelica's Record Distributors, pleaded guilty before U.S. Magistrate Judge Paul D. Stickney to two counts of copyright infringement, stipulating that she willfully reproduced or distributed numerous copyrighted sound recordings on CDs without authorization from the copyright holders.  Angelica's Record Distributors pleaded guilty to three counts of trafficking in counterfeit labels and counterfeit packaging.  A sentencing date was not set.

According to plea agreements filed in the cases, if acceptable to the Court, the parties agree that Portillo and Angelica's Record Distributors will each receive a five-year term of probation.  In addition, Portillo must pay, jointly and severally with Angelica's Record Distributors, $250,000 in restitution to the Recording Industry Association of America, forfeit $250,000 in cash to the Department of Homeland Security, and forfeit 155,441 counterfeit CDs and DVDs that were seized from Angelica's Record Distributors in Dallas, Chicago and Phoenix.

From September 2010 through April 27, 2011, Angelica's Record Distributors obtained music CDs that it knew contained counterfeit labels and counterfeit packaging.  These music CDs that contained the counterfeit packaging and illicit labels, and which Angelica's Record Distributors knew were copyrighted works, were purchased from a company in California and then distributed to retailers across the country through Angelica's Record Distributors store locations.

Employees at all three store locations knowingly sold legitimate and counterfeit CDs to retailers.  Employees mixed legitimate product with counterfeit product containing counterfeit labels and packaging.  They told their customers either that the counterfeit product was from a cheaper distributor or that it was "grey market," meaning that the CDs were legitimate but produced for distribution in Mexico or abroad, and not intended to be sold in the U.S.

Because of its conduct, Angelica's Record Distributors caused the record labels associated with the Recording Industry Association of America to suffer more than $250,000 in losses.

Assistant U.S. Attorney A. Saleem, Northern District of Texas, is in charge of this prosecution.