Two Turlock residents will go to prison for operating a major counterfeit DVD ring on the Internet, federal prosecutors announced Thursday.
Karen Jean Freyling, 48, and Steven Walter Butts, 62, were sentenced respectively to 10 years and one month and seven years and 10 months in prison after being convicted by a jury of offenses including conspiracy, wire fraud, mail fraud and smuggling.
Prosecutors say the pair made at least $272,000 in deposits into one bank account and $422,000 in deposits into a different account.
They purchased more than 128,000 individual DVD cases that were packaged with counterfeit DVDs and labels and then shipped to thousands of customers. Victims filed complaints with the Better Business Bureau, the Motion Picture Association of America, Ripoff Report and their credit card companies.
According to testimony at trial, Freyling and Butts began selling counterfeit DVDs online in 2006. After their online accounts with Amazon and eBay were suspended for copyright infringement, the defendants opened three Web sites where they claimed to sell new, factory-made DVDs.
They told customers they had been in business for more than 15 years, that Butts was employed by the Department of Justice and the Turlock Police Department and that they were selling the DVDs for the benefit of underprivileged children, according to prosecutors.
But Butts and Freyling imported the counterfeit DVDs from suppliers in the Philippines, prosecutors said.
Three employees — Earl Edward Riedel, 49, Raymond Paul Mott, 47, and Steven Alan LoBue, 49, all of Turlock — pleaded guilty Dec. 21 to a misdemeanor charge of criminal infringement of copyright.
A restitution hearing for all five defendants is scheduled for June 1.