Northern ireland : £120m ‘piracy fraud’

A man from Northern Ireland has been accused of being part of an operation which could have defrauded the film industry out of £120m. Paul Mahoney, 30, who has pleaded guilty, allegedly made £300,000 from advertising revenue on several sites, including the now-defunct streaming portal FastPassTV.

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In May 2011, police in Northern Ireland reported seizing £83,000 and computer equipment following a raid in Londonderry. The operation was the culmination of an investigation carried out by the Hollywood-funded anti-piracy group Federation Against Copyright Theft (FACT).

In February 2015, Paul Mahoney from Carnhill, Londonderry, was charged with offenses connected with operating now-defunct streaming links site FastPassTV and discussion and linking forum BedroomMedia. He pleaded not guilty to all charges and was bailed to appear at a later date.

In June, 30-year-old Mahoney changed direction, pleading guilty to all four charges against him including allowing the public to view copyrighted movies without rightsholder permission, conspiracy, and generating hundreds of thousands in illegal advertising revenue.

Mahoney was up in court again yesterday for a pre-sentence hearing and its becoming increasingly clear how much trouble he’s in.

After operating various sites for around six years, the prosecution claims that Mahoney made almost 410,000 euros ($471,500) from his endeavors, while simultaneously claiming state benefits worth around 12,000 euros ($13,800). When his house was raided, police found almost £82,400 ($129,000) in cash hidden away.

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During the hearing in Derry’s crown court, prosecutor David Groome QC laid out the alleged scale of the 30-year-old’s offending while describing the financial implications as “staggering”.

Taking a single six-month period during which visitors to Mahoney’s sites viewed movies 1.1 million times illegally, Groome took the figures and ran with them, painting a somewhat scary picture for the court.

“During the six-year life of defendant’s business that equates to something like movies being viewed on 12 million occasions. If you consider it is about £10 to go to the cinema or about £10 to buy a brand new DVD upon its release, it means the defendant’s websites enabled users of it to view about £120 million [$188m] worth of property,” Groome said.

While acknowledging that not every view would represent a lost sale, the prosecution noted that Mahoney had taken a number of actions since 2007 to avoid having his sites closed down. Cease and desist notices issued by FACT appear to have been ignored and police arrested him twice, yet still he continued with his operations.

Defending Mahoney, Martin Rodgers QC said his client’s partial blindness meant that he was bullied at school, events that led to him becoming a virtual bedroom recluse for around 10 years.

“His constant and only companion during that period of time was in fact his computer. In one sense, he essentially lived in a bubble for a period of time,” Rodgers said.

Interestingly, the defense addressed the prosecution’s claims that Mahoney generated large revenues from advertising companies by questioning why they weren’t being prosecuted too.

“They entered into agreements that if anyone visited the site they would pay, even though from a cursory view of the site it would be apparent this was facilitating criminal offenses,” Rodgers said.

But despite the claims of massive profits, Mahoney’s lawyer rejected the notion that his client had enjoyed the high-life.

“There were no Rolex watches, no Ferraris outside and no evidence of an extravagant lifestyle. This enterprise took on a life of its own and became far more successful than this defendant ever envisaged,” he said.

While Mahoney faces a potential custodial sentence next month, FACT says that there will be no claim for compensation. Instead, they hope that the prosecution alone will send a clear message to others considering a similar path.

Seems he has been sentanced to 4 years....

A man from Northern Ireland who made an estimated £300,000 from advertising revenue on several sites, including the now-defunct streaming portal FastPassTV, has been handed a four-year sentence. Paul Mahoney, 30, will serve two years in jail and two years on license.

fastpasstvFollowing an investigation carried out by the Hollywood-funded anti-piracy group Federation Against Copyright Theft (FACT), police in Northern Ireland raided a Londonderry home in May 2011.

They were searching for Paul Mahoney, the operator of streaming links site FastPassTV and discussion and linking forum BedroomMedia. Police arrested Mahoney while seizing computer equipment and cash totaling £83,000.

After being charged in February 2015, Mahoney pleaded not guilty. Several months later, however, he had a change of heart.

At a June hearing the 30-year-old pleaded guilty to all four charges against him including allowing the public to view copyrighted movies without rightsholder permission, conspiracy, and generating up to £300,000 in advertising revenue.

During a pre-sentence hearing last month, Judge Philip Babington was told by the prosecution that Mahoney could have cost the movie industry £120 million.

Mahoney appeared at Londonderry Crown Court this morning at 11:00am for sentencing and it’s bad news for the partially sighted man. The Court sentenced Mahoney to four years in prison, two of which will be spent on license.

“These offenses represent offending which undoubtedly put at risk very many millions of pounds as far as the greater entertainment industry was concerned,” Judge Philip Babington said.

“Offending such as this affects everyone in society at the end of the day although primarily the interests of those involved in film production, the results of which we all enjoy.”

Judge Babington said that Mahoney had put together “a very sophisticated scheme” which had allowed people to “view films on very many millions of occasions for nothing” while generating money from advertising.

He added that he had been left with no other alternative than to pass a custodial sentence “to show that behavior of this nature does not go unpunished.”

FACT Director General Kieron Sharp said that the case was an important one.

“Committing crime using the Internet is viewed by some as being less serious than more ‘traditional’ offending, which is particularly true of film and television piracy. This prosecution and sentence show that you cannot hide behind the supposed anonymity of the cyber world and that you will be identified, caught and convicted,” Sharp said.

PSNI investigating officer Detective Constable Yolande Healey said that Mahoney had been operating his sites for years.

“He thought he could collect substantial amounts of advertising revenue from his site and distance himself from the actual hosting of an illicit copy of a film by using unrelated third party websites,” Healey said.

“From his bedroom in Carnhill, Mahony thought he could make money from advertisers who were attracted by the volume of traffic from across the world on his website. He thought his form of cyber-crime was untouchable. He was wrong. Working with partner agencies, police will investigate any reports of criminality online.”

IS RUNNING A PIRATE SITE WORSE THAN STEALING £8.5M FROM A BANK?

This week an Irish man was handed a four-year sentence for running a pirate linking site. The Court accepted that he led no lavish lifestyle. In contrast, a man who stole almost £9m from a bank and bought homes worth £1.4m, three Bentleys, three Aston Martins, a Porsche 911 and a Rolls Royce, was also jailed. He received just 3.5 years. Fair?

This week Paul Mahoney, the former operator of streaming links site FastPassTV and discussion and linking forum BedroomMedia, was sentenced to jail by Judge Philip Babington.

According to figures provided by the prosecution, Mahoney ‘could’ have cost the movie industry £120m in lost revenue. Ultimately, however, the claims of a film industry out for blood ended up somewhat watered down.

In the cold light of day the court accepted a figure closer to £12m – quite an ‘achievement’ for a “partially blind recluse” who lived in a bedroom in his parents’ particularly modest home.

Given the tendency of the prosecution in these cases to blow losses figures wildly out of proportion, it’s perhaps more prudent to look at numbers backed up by evidence.

It doesn’t appear to be in question that Mahoney made £280,000 in advertising revenue from his sites and he was found in possession of £82,390 in cash when he was raided. That’s a decent amount by almost anyone’s standards and was never likely to be looked upon lightly by the court.

So, on the basis that Mahoney made large sums of money illegally it should come as no surprise that having pleaded guilty to substantial fraud he should’ve expected a custodial sentence this week. Such is the current climate in the UK and few people watching the case expected anything different.

But while some might argue that the term should have been limited to a few weeks or a handful of months, on Thursday the court handed Mahoney a four-year sentence, one of the toughest in UK pirate prosecution history.

For someone of Mahoney’s standing that term seems overly cruel and it appears that Mahoney’s lawyers feel so too. On Thursday they announced that the 29-year-old will be mounting an appeal, presumably to ensure that any punishment received fits the crime.

As we wait for the legal basis of that appeal to be made public, readers might be interested to hear of another fraud case that was concluded this week.

It involved businessman Nicholas Marcou from London, who used his legitimate businesses and contracts with supermarkets such as Aldi, Lidl, Sainsbury’s and Asda to fraudulently obtain millions from Barclays Bank.

According to figures provided by City of London Police, actual losses to Barclays Bank (versus the hypothetical losses conjured up in the Mahoney case) were £8,576,811.

Unlike Mahoney, who appears to have spent most of his adult life in a bedroom at his parents’ house, Marcou enjoyed ‘his’ money. According to a local news report he bought two homes worth more than £1.4m and £650,000 worth of cars including three Bentleys, three Aston Martins, a Porsche 911, and a Rolls Royce Silver Spirit.

While Marcou appears to have been driven by greed, Mahoney appears to have given much of his money away. According to a court report he “did not exhibit any of the features of a lavish lifestyle and his spending was concerned only to paying employees, running the site and accessing adult websites.”

It’s also worth bearing in mind that even if we take the previously mentioned £12m figure as accurate, those presumed losses were racked up by users of Mahoney’s site, not Mahoney himself. Site users were the ones who turned up and clicked ‘play’ and didn’t pay for whatever it was they watched. Although he clearly played a part, Mahoney didn’t take that money from the studio’s pockets, the public did. Marcou alone took the money from the bank.

Finger pointing aside, Mahoney ended up with a four-year sentence. For the record, Marcou the bank defrauder received just 3.5 years.

While anti-piracy groups such as FACT, who investigated the case, view Mahoney’s actions as extremely serious, something feels fundamentally wrong here.

Make no mistake, Mahoney should receive some punishment, if only because he knowingly and deliberately broke laws he knew could get him into serious trouble.

But should this man living on the fringes of society be given a more punishing sentence than a man who systematically stole £8.5m in cash from a bank in order to fund a dream lifestyle?

Perhaps in due course Mahoney’s defense team will raise the same questions. Until then he remains behind bars.