Chinese National Pleads Guilty to Software Piracy Scheme

KANSAS CITY, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Chinese national pleaded guilty in federal court today to his role in an international, multi-million dollar software piracy scheme.

Wen Tao Liu, also known as Orland Liu, 37, a citizen of the People’s Republic of China, pleaded guilty before U.S. Chief District Judge Greg Kays to one count of conspiracy and one count of trafficking in counterfeit labels. Liu was arrested on June 15, 2016, at Dallas Fort Worth International airport on an American Airlines flight during his return flight to China, and remains in federal custody.

Investigators have seized more than $20 million in assets from defendants in several separate but related cases, who are estimated to have sold in excess of $100 million worth of illicit, unauthorized and counterfeit software products to thousands of online customers.

Liu, doing business as Haitu International Group Co. Limited (an entity based in Hong Kong), participated in a conspiracy with Casey Lee Ross of Kansas City, Mo. (doing business as Software Slashers), David Reece of Fort Lauderdale, Fla., and others from March 10, 2010, to Feb. 2, 2015, to commit the offenses of unauthorized solicitation of access devices, trafficking in counterfeit goods and smuggling goods into the United States.

Liu obtained and sold counterfeit, illicit, and/or unauthorized Microsoft software, software products and related components, including unauthorized product key codes and counterfeit product key cards, causing the Microsoft Corporation millions of dollars in losses. (Product key codes are used to obtain full access to unlocked, licensed versions of various copyrighted software programs.)

At the time of his arrest, Liu possessed approximately 318,213 unauthorized Microsoft product key codes, which he had obtained from illicit sources and sold to others. Those product key codes, worth approximately $250 each, constitutes a loss of approximately $79,553,250 to Microsoft.

Liu also admitted that he sold 500 counterfeit Microsoft Office “Lenovo” product key cards to an undercover law enforcement agent for $35,000.

Liu is the eighth defendant to plead guilty in the software piracy scheme. The investigation began when federal agents in Kansas City, Mo., learned in 2013 that Ross had purchased (and redistributed) tens of thousands of illegitimate and unauthorized Microsoft product key codes and counterfeit product key cards from sources in China.

Ross pleaded guilty and has been sentenced in a separate but related case. Ross admitted that he distributed tens of thousands of these illegitimate and unauthorized product key codes and counterfeit Microsoft product key cards to co-conspirators in the United States, who in turn sold the product key codes and counterfeit product key cards through their respective Web sites as well as on e-commerce sites such as eBay or Amazon.

Reece pleaded guilty and awaits sentencing in a separate but related case. Reece admitted that he received approximately $2.5 million worth of illicit software key cards. Reece then resold them to other illicit software suppliers and customers. Liu admitted today that he sent approximately 20 shipments of contraband to Reece between Sept. 21, 2013, and March 14, 2015, with each shipment containing approximately 500 Microsoft Office “Lenovo” product key cards, for a total of approximately 10,000 contraband items. At an estimated loss of $250 per item, this constitutes a total loss of approximately $2.5 million.

Under federal statutes, Liu is subject to a sentence of up to 10 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorneys Patrick D. Daly and Curt Bohling. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).