Two Turlock residents have been convicted in federal court of operating an illegal Internet DVD import and distribution business out of their home, according to the U.S. attorney's office.
A jury also returned guilty verdicts against Steven Walter Butts, 62, and Karen Jean Freyling, 47, on charges they fraudulently received government benefits, U.S. Attorney Benjamin Wagner announced Friday.
Butts and Freyling were convicted on 15 counts each of conspiracy; wire fraud; mail fraud; importing goods by means of false statements; smuggling; trafficking in counterfeit labels, documentation or packaging; Social Security fraud; and making false statements.
Butts and Freyling were arrested in October 2008 after federal authorities served search warrants at homes in the 400 block of South Verduga Road and the 3100 block of North Park Court in Turlock.
The illegal DVD business, federal officials say, was operated out of the South Verduga Road home, where authorities seized pirated DVDs, DVD cases, computers, DVD manufacturing and production equipment and packaging materials.
Butts and Freyling began selling counterfeit DVDs online in 2006, according to prosecutors. After their accounts with Amazon.com and eBay were suspended, the defendants created three Web sites to sell counterfeit merchandise.
The prosecutors said Butts and Freyling made false statements on the Web sites to make sales. They claimed they were selling DVDs as a family business to benefit underprivileged children.
Evidence at the trial showed that Butts and Freyling imported counterfeit DVDs in bulk from suppliers in the Philippines by making false U.S. Customs statements.
Bee staff writer Rosalio Ahumada can be reached at firstname.lastname@example.org or 578-2394.