Two Americans arrested for DVD piracy in China

Two Americans, including a member of a wealthy New York City family, have been arrested in China, where the authorities said an investigation into their business activities had led to the seizure of more than 210,000 counterfeit motion picture DVDs and nearly $100,000 in cash.

Randolph Hobson Guthrie III, 37, and Cody Abram Thrush, 34, were among six people taken into custody on July 1 through a collaborative effort of Chinese and US investigators.

Under Chinese law, a suspect can be held for 30 days without a formal arrest, which in this case was announced on Thursday.

All six defendants will stand trial in China, officials said.

"The lure of high profit and a perceived lack of enforcement consequences has increasingly emboldened counterfeiters," said a statement by Michael Garcia, an assistant secretary of the Department of Homeland Security and head of the Immigration and Customs Enforcement agency.

"This joint enforcement action shows a major advance in fighting intellectual property crime around the world, from where it originates to where it flourishes," he said.

The arrests grew out of an effort called Operation Spring that began with federal authorities in Gulfport, Mississippi, and grew to include officials in Houston, Washington, Beijing and Shanghai.

In addition to the seizures, US officials said Chinese authorities destroyed three warehouses that were used to store counterfeit DVDs for distribution around the world.

The state-run Xinhua news agency said the director of the Shanghai Public Security Bureau, told reporters in Shanghai that the Americans had sold 100,000 of the DVDs worldwide.

US officials said they knew little about the Americans arrested in the case. But Guthrie, the son of a retired doctor, described himself in great length in a profile on a Web site for men seeking brides from Russia. As a resident of Shanghai who speaks English and Chinese, he said he owned a Web site that sold DVDs online.

"My gross sales are currently about US$25,000 per month, and I have 10 full-time employees," he wrote.

He said he sold the DVDs world-wide in a business he described as "very profitable." He also said that his family owned a bank, Bessemer Trust, a privately held financial management firm based in New York. But Richard Davis, the company's general counsel, said no one named Guthrie had a controlling interest of the company.

US authorities said they had no information about Thrush.

The theft of intellectual property has been a major problem for American filmmakers, costing the industry about US$3.5 billion a year in lost revenues worldwide. Jack Valenti, head of the Motion Picture Association of America, estimated that the ring had cost US filmmakers US$180 million in lost revenues.