It's an exclusive inside look at what Homeland Security investigators say is a sophisticated global counterfeiting ring that led them from a small businesses in Lakeland to major illegal operations in China and Australia.
"They were pulling in between $40,000 and $87,000 every two weeks," explained the undercover Homeland Security agent. "At that profit margin, that's better than narcotics."
The case began in 2010, when federal agents say they confiscated a package full of counterfeit DVDs at the Orlando International Airport. It was headed for an office space in Lakeland belonging to Chris Clark.
The DVDs look real, from the art work on the outside to what you see inside, until you flip it over. The gold backing was a dead giveaway that it was fake. Altogether, more than six people in Lakeland were selling these DVDs on sites like Amazon and eBay, including the owner of a baseball memorabilia store, who they identified as John Gaglione.
"He and his family took it to a whole another level. They weren't only selling them through online venues. They were selling them at the flea market, they were selling them at their local business that was a sports card and memorabilia place and they were also making a lot of money," explained the agent, who added it was about $500,000 in just eight months.
The DVDs were coming from a man investigators say had ties to China, Jian Huang. They called him "China Glen." Homeland Security lured him to the states by posing as Clark, telling the man, "Let's go into business together. Let's make some money. Show me your secret, and this guy had an ego and he bit," said the agent.
"China Glen" flew to Orlando, where he was arrested and investigators said he confessed. He eventually gave them what they call a gold mine detailing the entire counterfeiting industry.
"A lot of these places are legitimate, and at night, they shut down and that's when all of the bad people come in with their products," he said.
These illegal operations cost the American film industry billions of dollars each year, according to Michael Robinson, the executive vice president of the Motion Picture Association of America.
"It's not just about Hollywood stars and it's not just about big name producers. It's about the people that are seamstresses, and behind the camera, and everyone that's involved in the industry," he said.
Those people's paychecks depend on DVD sales, and that's why he said that this case is so important.
A total of nine people in the DVD piracy ring are now serving various sentences. The last of them was sentenced today to 33 months behind bars. As for the ring leader, the man the feds called "China Glen," he's a Chinese national and was sentenced to 51 months and has to repay the film industry $1.2 million.
FOX 13 / WTVT-TV
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