Before 2017

Eleventh Circuit Affirms Conviction and 51-Month Sentence for Criminal Copyright Infringement and Trafficking in Counterfeit Labels

Let it be known that in the United States, large-scale piracy of copyrighted materials is taken very seriously and can, in fact, result in significant jail time.  On February 25, 2013, the U.S. Court of the Appeals for the Eleventh Circuit affirmed the conviction and 51-month federal imprisonment sentence of Charles Ndhlovu, of Fairburn, Georgia.
Conviction and Sentencing
A federal jury convicted Ndhlovu on July 28, 2011 on two counts of criminal copyright infringement and one count of trafficking in counterfeit labels, associated with illegal copying and distribution of copyrighted CDs and DVDs which, according to a May 19, 2009 indictment, included such works as the films “The Dark Knight” and “Gran Torino,” and recordings by Kanye West and Lil Wayne, among others. 
In December 2011, the U.S. District Court for the Northern District of Georgia sentenced Ndhlovu to 51 months in a federal prison for the convictions.  Also sentenced that date was Scott Ahn, of Lawrenceville, Georgia, who had supplied Ndhlovu with “raw materials and technology, such as blank CDs and burners” to assist Ndhlovu in his illegal activities.  As further stated in an FBI press release:

[Ahn] was sentenced to one year and seven months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $25,000 to the Recording Industry Association of America, and $15,000 to the Motion Picture Association of America.  [Ahn] pleaded guilty to one count of conspiracy to violate copyright laws on January 14, 2010, [and] testified against several of his 12 co-defendants in two criminal trials and gave other cooperation.
That same press release bore a quote by U.S. Attorney Sally Quillian, who described the scope of the defendants’ illegal activities as follows:

“These defendants mass-produced hundreds of thousands of counterfeit music CDs and DVD movies in a pirating operation that appeared to be the largest of its kind in the southeastern United States.  Their victims included consumers, who were not getting genuine products, as well as the thousands of Americans who earn their livelihoods from the legitimate creation of their art.”
According to a U.S. Department of Justice press release: “The entire criminal enterprise was responsible for the distribution of illegal products that, if legitimate, would have been valued at more than $12 million.”

Ndhlovu appealed both his conviction and his sentence to the Eleventh Circuit.

The Eleventh Circuit’s Decision on Appeal

In its “unpublished” opinion,[1] the Eleventh Circuit first dealt with the count for trafficking in counterfeit labels under 28 U.S.C. § 2318(a) and (c)(3).[2]  The court held that a reasonable jury could find Ndhlovu guilty of this count, citing evidence including “several hundred CDs, DVDs, and photocopies of disc labels” and an FBI videotape showing him buying blank CDs and DVDs, as well as cases for them, “from illicit vendors in the Atlanta area.”[3]
The Eleventh Circuit next evaluated the two counts of criminal (felony) copyright infringement under 17 U.S.C. § 206 and 18 U.S.C. § 2319, each count directed to a different 180-day period of charged criminal activity.[4]  Specifically, one count dealt with activity between December 24, 2007 and June 21, 2008, the other covering activity between December 22, 2008 and May 21, 2009.[5]  As to each count, the Eleventh Circuit concluded that the Government sufficiently established the required elements.  It observed that the jury acted reasonably in finding willfulness, i.e., that Ndhlovu knew what he was doing was illegal,[6] in view of evidence that he sold his items: (i) “in a clandestine fashion,” with his store not having any external markings nor displaying a business license; and (ii) “well below retail value,” in one instance averaging less than $2 per counterfeit item.[7]  Specific to the second of those two counts, the Eleventh Circuit observed that Ndhlovu had been previously arrested in January 2008 for selling counterfeit items, which was well before the period concerning that count.[8]
After summarily rejecting Ndhlovu’s additional arguments concerning jury instructions and declining to address his claim of ineffective assistance of counsel (due to insufficient development of the record), the Eleventh Circuit briefly addressed Ndhlovu’s challenge of his 51-month sentence.  It held that he failed to show that the sentence was “substantively unreasonable” and observed that the sentence imposed was on the low end of sentencing guidelines and far less than the statutory maximum of 25 years’ imprisonment.[9]
Barring anything that would prevent Ndhlovu from serving his full sentence in federal prison, and calculating his sentence starting from the date of his July 2011 conviction,[10] the Eleventh Circuit’s decision means that he will remain behind bars until October 2015.  Perhaps back in 2009, the FBI Special Agent in Charge provided the most appropriate parting thought: “The theft of such intellectual property is not only inherently unfair to the individual, artist, or company, but it remains illegal with stiff criminal penalties.” 

The decision is United States v. Ndhlovu, No. 11-16171, 2013 WL 67402 (11th Cir. Feb. 25, 2013).

[1] “Unpublished” means that the opinion will not be selected for publication in the Federal Reporter, though of course it may be accessible elsewhere.  Such opinions are, by rule, regarded as merely persuasive precedent and not binding precedent.  See 11th Cir. R. 36-2. 
[2] “To [obtain a conviction for trafficking in counterfeit labels], the Government needed to prove that [the accused] (1) knowingly trafficked (2) in labels, packaging, and other documentation accompanying or designed to accompany a phonorecord or motion picture, (3) which are counterfeit, and (4) that the sound recordings or motion pictures to which the counterfeit labels were designed to be affixed were copyright protected.”  United States v. Ndhlovu, No. 11-16171, 2013 WL 67402, at *1 (11th Cir. Feb. 25, 2013) (unpub.).
[3] Id.
[4] “To [obtain a conviction for felony copyright infringement], the Government needed to prove that [the accused] (1) willfully infringed (2) a copyright (3) for purposes of commercial advantage or private financial gain (4) by reproducing or distributing (5) ten or more copies of one or more copyrighted works worth more than $2,500 in retail value (6) during any 180–day (six-month) period.”  Id. at *2.
[5] Id. at *2 & *3. 
[6] “Willfulness means the ‘voluntary, intentional violation of a known legal duty.’”  Id. at *2 (quoting Cheek v. United States, 498 U.S. 192, 201 (1991)).
[7] Ndhlovu, 2013 WL 67402, at *3.
[8] Id. at *4.
[9] Id. at *5.  The Eleventh Circuit did not specify its calculation of 25 years.  The statute for trafficking in counterfeit labels specifies a maximum of 5 years.  18 U.S.C. § 2318(a)(1).  The applicable penal statute for criminal copyright infringement specifies a maximum of 5 years for one offense and of 10 years for a second or subsequent offense.  18 U.S.C. § 2319(b)(1), (2).  Thus, the apparent maxima would be 5 years for the trafficking count, 5 years for the first criminal copyright count, and 10 years for the second criminal copyright count, for a total of 20 years.  In any event, that maximum also far exceeds Ndhlovu’s sentence.
[10] “A sentence to a term of imprisonment commences on the date the defendant is received in custody awaiting transportation to, or arrives voluntarily to commence service of sentence at, the official detention facility at which the sentence is to be served.”  18 U.S.C. § 3585(a).

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