Gang facing jail for UK's biggest DVD piracy scam

A DVD piracy gang were facing jail today for Britain's biggest film copying scam.

The "sophisticated" family-run business, which made an estimated £7 million, hid behind a "veneer of respectability" as it imported cutting-edge equipment from the Far East to "burn" the latest box office hits to "the best industry standards possible".

Quite often lucrative productions like Ice Age 2, the Da Vinci Code and Iron Man were being touted on street corners for £3 a time before their big screen releases.

Their multimillion-pound turnover was bolstered even further by reproducing so many porn and bestiality films that some sex film shops were driven out of business.

London's Southwark Crown Court heard the three-year operation's success was graphically demonstrated by the fact that just two years after setting up business in a shop in Walthamstow, east London, the gang splashed out on a £658,000 warehouse in Essex.

It enabled them to feed even more cramped "factories" - semi-detached houses scattered across the capital - with the raw materials to copy hundreds of thousands of DVDs.

They were staffed by "largely illegal Chinese immigrants", some of whom are thought to have been smuggled into the UK.

John Hardy, QC, prosecuting, told the court they "worked round-the-clock in conditions of virtual slavery".

Police believe much of the gang's "vast" ill-gotten gains have been smuggled out of the country.

However, tens of thousands were spent by some gang members on first class flights to luxury holiday destinations around the world.

Also on their pleasure list were numerous visits to lap dancing clubs, including Spearmint Rhino.

A confiscation hearing will be held later.

In the dock were Khalid Sheikh, 53, and his two sons Rafi, 26, and Sami, 28, all of Larkshall Road, North Chingford.

The younger Sheikhs were convicted of conspiracy to contravene copyright laws, contravene the trade mark legislation and acquire criminal property between March 2003 and June 2006 when they were arrested in co-ordinated police raids.

Both have been remanded in custody for sentence on July 28.

Their father, who will also be dealt with on that date, was found guilty of the copyright plot and released on bail.

Also before the court was Xin Li, 34, of Victoria Road, Walthamstow, east London, who was convicted of concealing criminal property. He is also on bail and will be sentenced with the others.

A fifth defendant Richard Russell, 29, of Driberg Court, Dagenham, east London, pleaded guilty to infringing copyright laws. He has already been given a community sentence,

After the case, Detective Superintendent Russell Day, of the Met's Film Piracy Unit, said: "The verdicts are the result of three years' hard work and investigation into the activity of an extensive criminal network.

"Their crimes not only had an impact on the major motion picture houses but also the consumers and in particular the vulnerable Chinese who became victims of the slave labour force.

"Film piracy is not a victimless crime and it is crucial that the public ask themselves if they want to play a part in the exploitation of vulnerable people by buying illegal DVDs," said the officer.

Kieron Sharp, director general of the Federation Against Copyright Theft (FACT), said: "This is a significant success for the Met's Film Piracy Unit working together with FACT.

"The focus of this operation was to dismantle an illicit business sustaining the organised crime gangs running large scale counterfeiting of audio-visual media.

"This was not a small scale business - this was a well-run and highly organised and criminal enterprise with links to the international crime gangs that are impacting on the livelihoods of the tens of thousands of people who work in the UK film and TV industries."

"The success in this case comes on the back of a long and complex investigation initiated by FACT and pursued through the diligence of officers from the Met. I would like to thank them for all their hard work," he added.