DHS: Mexican Drug Cartels Profiting Off Pirated Goods

We know from examples like Megaupload that foreign criminals are getting rich operating illegal websites designed to steal and profit from other people’s hard work and creativity. We also know that many of these same criminals use malware to spread threatening computer viruses that can steal your identity and credit card information. Now, according to officials at the Department of Homeland Security, there’s evidence Mexican drug cartels are turning to piracy as well.

The existence of the counterfeit goods market along border towns is nothing new, reports the El Paso Times, following a recent raid by federal agents that led to the seizure of thousands of items:

The sale of cheap “pirate” CDs and DVDs, fake designer handbags and bootleg brand-name clothes and sneakers has been a long-standing business at flea markets and mom-and-pop shops in El Paso and Juárez.

But agents at DHS’ U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI) say Mexican drug cartels are increasingly turning to the counterfeit market as part of their criminal enterprise.

“It’s become such a lucrative business that our El Paso HSI agents have information that the drug cartels are now investing in this type of crime,” said Leticia Zamarripa, a spokeswoman for ICE.

In Mexico, drug cartels are thought to have muscled into the “pirated” goods market. It is part of a pattern in which cartels have diversified beyond drug trafficking to other criminal ventures, including extortion and immigrant smuggling.

In the El Paso-Juárez area, vendors of counterfeit items, according to HSI agents, are reportedly charged a tax, or quota, that is collected by the Barrio Azteca gang. The Barrio Azteca gang is the dominant gang in the region and collects a similar tax from street-level drug dealers.

The Barrio Azteca, or the BA, is allied with the Vicente Carrillo Fuentes drug organization, better known as the Juárez drug cartel.

You read that right – some of the money from the sale of counterfeit goods is funneled straight into the hands of Mexican drug cartels. What’s more, ICE officials warn counterfeit items are “often substandard and in some cases can pose a risk to health or safety.”

Zamarripa concludes: “As consumers, we have to stop to think and consider where that money is going and who we are supporting by purchasing these items,” adding: “By supporting this type of illegal activity, we are robbing Americans of legitimate jobs.”

We couldn’t agree more.

Read more.

AFL-CIO President: Digital theft has cost the U.S. entertainment industry countless jobs

Yesterday during a White House conference called “Intellectual Property and the U.S. Economy: Industries in Focus,” AFL-CIO President Richard Trumka spoke about the inseparable link between intellectual property and American jobs. He lauded American creativity in media, and its value as a national export.

The U.S. entertainment industry “remains heavily unionized,” Trumka noted, and is comprised of mostly “middle-class professions you never see,” such as “camera operators, costumers, editors, electricians, hairstylists, make-up artists and dozens more” – rather than the celebrities as some might expect.

Trumka continued:

Entertainment professionals depend not just on pay, but on a share of “downstream revenue” from the repeated use of a show, film, or recorded music after its initial release. Three-quarters of the revenues for a motion picture come after its initial theatrical release. More than half of scripted television revenues come after the first run. These downstream revenues yield the residuals and royalties that sustain entertainment professionals between projects and fund their pension and health care plans.

But along with billions of dollars each year, digital theft has cost the U.S. entertainment industry countless jobs.

Trumka also highlighted the consequences intellectual property theft has on American jobs and the importance of taking action to stop it:

A 2011 report from the U.S. International Trade Commission estimated conservatively that if China protected intellectual property as the U.S. does, there would be approximately 923,000 new U.S. jobs. And China is only one of many countries that host websites illegally trafficking in U.S. entertainment.

U.S. protections for American intellectual property simply do not effectively address foreign rogue websites that steal movies, TV shows and music. The need to address foreign rogue websites remains urgent as they continue to profit at the expense of U.S. jobs and income.

The AFL-CIO president joined U.S. Chamber of Commerce President and CEO Thomas J. Donohue and Commerce Secretary John Bryson for the release of a new Commerce Department report which finds that “the entire U.S. economy relies on some form of IP, because virtually every industry either produces or uses it,” and that IP-intensive industries support at least 40 million jobs and contributing $5 trillion dollars to the economy.

Click here to read Richard Trumka’s full remarks, then visit CreativeFuture.org and sign up to stand with many others against content theft.