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Today, we are announcing the largest and most extensive investigation ever conducted in cyberspace - the new frontier for crime.
Earlier today, the Customs Service executed Operation Buccaneer, an unprecedented investigation into a global network of cyberspace gangs responsible for pirating billions of dollars worth of software over the Internet. The pirated software involved includes copyrighted games, music and digital videos and expensive application software.
This morning, Customs agents executed search warrants on major universities, businesses and residences across the country. The enforcement actions mark the first overt phase of a 15 month undercover investigation by the Customs Service and its Cybersmuggling Center, in coordination with the Justice Department's Computer Crimes and Intellectual Property Section.
Though software piracy is a crime that cannot be seen with the naked eye, the costs are enormous to both industry and consumers.
According to some estimates, as recently as 1999, one in every three business software units in use was pirated.
The global losses are staggering and exceed $12 billion worldwide, including $3.6 billion in the US and Canada.
Software piracy undermines the stability of the burgeoning e-commerce industry, and it is a direct threat to innovative companies that help strengthen the US economy.
Piracy also hurts consumers. When software companies are hurt by pirates, they are less likely to innovate, depriving consumers of new innovations. Also, legitimate users have to pay more to make up for lost sales to pirates.
While today's action is the first overt law enforcement action of Operation Buccaneer, this investigation has been underway since September 2000, a full 15 months.
Operation Buccaneer targeted the WAREZ community, a group of software thieves who engage in the duplication and reproduction of copyrighted software over the Internet.
The WAREZ community and its member groups are believed to be responsible for 95% of the Internet sites containing pirated software.
Now, I am delighted to introduce Phil Bond, Undersecretary of Commerce for Technology Policy, followed by John Varrone, the Assistant Commissioner of Customs for Investigations, who will address some more detailed aspects of the investigation.