Police dawn raid stops allofmp3.com pirate vouchers scheme

Action marks a significant step in the demise of Russian illegal music website
Metropolitan Police raids private address after record industry investigation into allofmp3 "piracy vouchers"
Twenty-five year old London male arrested under Fraud Act

London, 21st May 2007

Police have raided and shut down an online voucher system allegedly used by the illegal Russian music download website allofmp3.com to try and sidestep the removal of legitimate payment services in the UK and Europe.

The action follows a pan-European investigation, conducted by global recording industry body IFPI and UK record companies' association the BPI, which led to the arrest of a 25-year-old male in Bow, London.

The individual was allegedly the UK-based European agent for allofmp3.com, facilitating the sale of digital downloads by advertising and selling vouchers through auction sites such as eBay and the website allofmp3vouchers.co.uk. That website has now been taken down from the internet. The vouchers contained a code that allowed UK and European consumers to access and download music illegally from the allofmp3.com website.

Charging £10 per voucher, the suspect was believed to be taking payment from European customers and transferring the cash into various offshore accounts operated by the site's Russian owners.

Metropolitan Police officers seized computer equipment and paperwork for further investigation. Early indications suggest the pirate operation may have generated criminal proceeds for the Russian website running into tens of thousands of pounds.

As the unlicensed sale of music is a criminal offence in the UK, police executed the raid under Section 2 of the Fraud Act 2006 - legislation introduced into UK law in January 2007 specifically to combat online fraud. This is the first time the new fraud legislation has been used in a copyright-related case.

Illegal website faces demise as payment options run dry and law closes in

The raids, which took place earlier this month, are the latest blow for the illegal website, once described as the UK’s second most popular digital music site after iTunes.

Despite false claims by the site that it pays record companies and artists, it has no permission from record companies to sell downloads in the UK and has been illegally undercutting legitimate services such as iTunes, Napster 2.0 and HMV Digital by not compensating the artists and record companies concerned.

Online payment companies such as PayPal and major credit card companies including MasterCard and Visa have all withdrawn their payment facilities from allofmp3.com because of its flagrant infringement of copyright.

Its popularity has since fallen, and it is now rated outside the top 2000 websites, according to net ratings website alexa.com.

The site also faces a raft of legal actions against it by the music industry internationally with ongoing criminal proceedings in Russia and civil claims in the US and France in addition to action in the UK by the BPI.

Already there has been a court injunction against the site in Germany, and the shutdown and criminal investigation of the portal allofmp3.it in Italy. A court order requiring ISPs to block access to allofmp3.com is already in place in Denmark.

BPI Chief Executive Geoff Taylor said:

"Allofmp3.com is an illegal download service and the decision by major credit cards and payment services no longer to support it amply demonstrates that fact.

"British music fans should beware of voucher schemes like this one that seek to prop up an illegal service that rips off artists.

"This criminal investigation demonstrates that trying to profit from the illegal distribution of music online is an offence with serious consequences."

John Kennedy, chairman and chief executive of IFPI, says:

“Allofmp3.com is illegal in Russia, the US, the UK and everywhere else in the world. The action announced today is the latest to highlight Allofmp3.com’s long and undistinguished history of stealing music from artists, composers and record producers and selling it at a profit."

Further information

BPI
Matt Phillips
020 7803 1395 / 07739 514 963
http://www.bpi.co.uk
http://www.bpi.co.uk/musiconline

IFPI
Adrian Strain or Alex Jacob
+44 (0)20 7878 7939 / +44 (0)20 7878 7940
http://www.ifpi.org

NOTES TO EDITORS

About BPI

The BPI (formerly known as British Phonographic Industry) represents the British recorded music industry
Its membership comprises of over four hundred music companies including the four 'major' record companies, associate members such as manufacturers and distributors and hundreds of independent music companies representing literally thousands of labels that comprise over 90% of the UK's recorded music market
A major area of the BPI's work is tackling music piracy, and the BPI combats commercial music piracy on behalf of the wider British music industry

About IFPI

IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,400 major and independent companies in more than 70 countries. It also has affiliated industry national groups in 48 countries. IFPI’s mission is to:

Promote the value of recorded music
Safeguard the rights of record producers
Expand the commercial uses of recorded music

About allofmp3.com

Allofmp3.com is a Russian-based music website that sells copies of music tracks that it does not have the rights to reproduce or distribute
Allofmp3.com is illegal under international treaties and copyright law in the UK and Russia
Criminal proceedings are being pursued by prosecutors in Moscow against the former managing director of the service
The BPI is in the process of bringing legal action against allofmp3.com, having won the right to bring a legal case against the Russian-based site in July 2006
http://www.bpi.co.uk/news/press/news_content_file_1002.shtml
http://www.bpi.co.uk/news/legal/news_content_file_1008.shtml
Allofmp3.com claims to have an agreement with a Russian copyright organisation, ROMS. No BPI or IFPI member record companies have mandated ROMS to license the sale of their music via the internet either in Russia or anywhere else. Indeed, ROMS has been expelled from the international copyright confederation CISAC. All major international bodies representing rights holders have confirmed that ROMS has no mandate to license their members’ repertoire
International credit card companies MasterCard and Visa decided to cease handling payments for the purchase of music on allofmp3.com. PayPal has also withdrawn its facilities from the service
Site statistics for allofmp3.com are available at: http://www.alexa.com/data/details/traffic_details?q=&url=http://www.allofmp3.com/