"This is only the first step," said Kevin Bell, spokesman for the nation's customs agency. "The investigation is ongoing."
The U.S. Customs Service, along with the U.S. Department of Justice, on Tuesday raided universities and high-tech businesses in 27 cities as part of an international crackdown on underground groups that actively trade in illicit copies of software and digital media.
Dubbed "Operation Buccaneer," the enforcement action occurred simultaneously in four other countries, where an additional 22 search warrants were issued, resulting in the arrests of nine people.
None of the suspects in the United States have yet been arrested.
"This investigation underscores the severity and scope of a multibillion-dollar software swindle over the Internet, as well as the vulnerabilities of this technology to outside attack," Customs Commissioner Robert Bonner said in a statement.
In the first overt action of a 15-month investigation of such organized groups of pirates, the Customs Service targeted the oldest and largest group, known as DrinkOrDie.
"We are targeting these groups that do it all the time," said Customs Service spokesman Bell. "If you are at your house one night and you want to get a free copy of some software, that's not what we are talking about."
Search and seizure
Customs agents seized 129 computers in the 38 searches nationwide, said Bell. Among the data captured were Web sites with so much pirated media that it took 4,000 pages to list the titles. Another seized system had more than 5,000 movies, including the blockbuster "Harry Potter and the Sorcerer's Stone."
"The data was available to millions of people all over the world," said Bell, who added that another 15 countries may take part in the action.
Members of the DrinkOrDie group included corporate executives, computer network administrators and students at major U.S. universities who regularly uploaded copy-protected software and digital media to be broken by other members of the group.
There are perhaps as many as 10 major warez communities such as DrinkOrDie. And they don't do it for profit, said Bell.
"They believe in a free Internet," he said. "They don't want any rules or any laws that inhibit what they do."
Warez (pronounced "wares") describes software and digital material that has been stripped of anti-copying protections and made available on the Internet for downloading.
Because the amount of data and evidence that the Customs Service must sort through is so large, Bell said he expected arrest warrants for subjects in the case would take two to three months to obtain.
Hitting the right target?
At least one computer security expert criticized the government's crackdown, saying it focuses on the wrong people.
"There are two kinds of people pirating software: the kids, and the people who are stamping out 5,000 copies in Taiwan and selling them for $5 a pop," said Bruce Schneier, a well-known encryption expert and president of network protection company Counterpane Internet Security.
The warez groups are typically students and computer aficionados having fun and testing themselves by breaking programs--generally, on a power trip, Schneier said.
"Throwing the book at these guys is the wrong thing to do," he added.
The Customs Service, however, maintains that the problem is more serious.
Responsible adults are said to be involved, not just students. And the techniques that the loose-knit community uses to ensure their security are advanced, said Customs Service spokesman Bell.
"They communicate over really secure IRC channels; they have rules, certain ways that people can become members," he said. "They are competing against each other to see how fast they can copy a piece of software and get it up on their site."
The Business Software Alliance (BSA), which represents the software industry's interest in Washington, D.C., agrees that warez sites are as big a threat as "true" pirates.
"You could have a good debate over who is hurting the industry more," said Bob Kruger, vice president of enforcement for the BSA, which has estimated that the software companies lost $2.6 billion in 2000 to U.S.-based piracy.
Although downloading programs from the Internet doesn't necessarily have a one-to-one correlation to lost sales, Kruger stresses that there is definitely harm suffered by the industry.
"Whether it's 10, 20, or 50 percent, it is part of the marketplace," he said. "We worry a lot about the destruction of the marketplace on the Internet."