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Departments : In the Hood

A High-Tech Spin on Counterfeiting

Gangs profit from the lucrative business of illegal CD manufacturing.

December 01, 2002  |  by Al Valdez

Once the raw CD is made, mechanical arms place it onto a platen, which is a plate that spins. While it is spinning, the reflective aluminum-colored coating is sprayed onto the CD. The process is fast and the coating instantly dries. The fresh CD is then placed onto a large rotating plate that holds four or five raw CDs. Each raw CD is rotated under the stamper. The stamper is pressed onto the CD, transferring the data from the "master" onto the new CD.

This process literally takes a few seconds. It is easy to see how thousands of CDs can be manufactured in just a few hours, especially if two or three machines are running at once.

Plastic seeds, which come in huge bags, are melted down and formed into raw CDs that the stamper can imprint.

The discs at this point are not labeled and appear to be blank, like the ones you would buy to burn using your home computer and a CD or DVD read/write program. To complete the duplication process, the label of the legitimate product is copied and made into "artwork." Artwork is a photographic negative of what is to be printed onto the CD. Silk screening is commonly used, but there are specially made printers that can print labels on thousands of discs per hour.

Once the label is printed onto the disc, two things can happen. The discs may be packaged in bulk and shipped to another location to be individually packaged and shipped. Or the same manufacturer may individually package the discs and ship them to the person who ordered them.

The Price of Doing Business

Right now, legitimately manufactured music CDs cost approximately 75 to 80 cents to make. This price does not include the extra costs of royalty fees, handling, packaging, shipping, and advertisement. By the time these costs are factored in, in addition to mark-up, you and I will pay $15 to $20 per title.

Bags of plastic seeds used to form raw CDs.

Counterfeit copies cost the purchaser $1.25 to $1.50 per copy in bulk quantities. Because the manufacturers of counterfeit copies don't need to cover the overhead costs necessary in legitimate operations, they more than make up the difference in the cost per CD copy. The math is not hard; counterfeiting CD operations can net more than $1 million a month for the manufacturer. And if the owner/operator is engaged in legitimate business, it becomes easy to conceal counterfeiting operations.

Counterfeit CDs of music and software are sold at swap meets, online, and through mail order. The "sell out," "close out," or "special offer" sales on the Windows 2000 operating system for $99, or Norton Utilities for $29.99, or a DVD movie like "Spider-man" for $10 will probably get the purchaser a counterfeit copy.

Although they are cheaper, counterfeit CDs and DVDs have drawbacks for consumers. They do not carry the warranties that legitimately manufactured discs do. This is really a concern for users of counterfeit software. If an operating system fails and a counterfeit copy was purchased and used, you will not get any manufacturer support or compensation. And you will still have to purchase a legitimate copy of the software to get your system running.

If you suspect a CD or DVD of being counterfeit, examine the inner center area of the disc. It is called the inner mirror band. This is where, on legitimately manufactured discs, you will find the name of the company that manufactured the title. If the name is missing, the disc may be counterfeit.

There may also be numbers embossed in this area. The numbers are called PIP numbers and are for identification purposes, similar to the ISB number assigned to books. But the presence of one set of numbers may only indicate a numbered production run.

Also, the graphics on the front of the disc should be crisp and readable. The producer's name should be on the front cover. The cover may also contain copyright information.

Gangs on the Job

Where do gangs figure in? Well, many gang members are involved in counterfeit operations in various ways. Some gang members work at CD and DVD manufacturing plants, giving them legitimate industry experience to use in a counterfeit operation. Gang members are also sometimes used to transport or sell counterfeit CDs. These gang members might also hijack semi trucks that are loaded with legitimately manufactured CDs. These stolen discs can then be copied and or sold for cheap prices. Older gang members are often involved in these high-tech crimes.

Investigations into counterfeit CD operations might be lengthy and, more often than not, will require an informant or undercover investigator. But cases like these can be initiated if the right questions are asked of a gang member who is involved. Keep your eyes open and talk to the right people and you just might crack a case using sources others might not think to tap.

Al Valdez is an investigator with the Orange County (Calif.) District Attorney's office and author of the book, "Gangs."

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