Three indicted in US bust of pirated CDs

SAN FRANCISCO (Reuters) - A US federal grand jury indicted three men on Wednesday in what prosecutors are calling the largest bust of pirated CDs in US history.

The indictment follows the arrest last week of Ye Teng Wen, 29, Hao He, 30, and Yaobin Zhai, 33, on charges of illegally reproducing 325,000 music and software CDs.

Two of the men are American citizens and one has a US work permit, said a spokesman for the US Attorney for Northern California.

"The allegations of massive piracy of music and software reflect the potential loss of millions of dollars to the artists and businesses who legitimately own the copyrights on these works," US Attorney Kevin Ryan said in a statement.

"These individuals are charged with affixing counterfeit labels on CDs to create the appearance of legitimacy, including the FBI Anti-Piracy Warning that stated 'Unauthorized copying is punishable under federal law.'"

Prosecutors said the pirated CDs, which included Latin music and Symantec Corp computer security software, circulated widely and one of the disks was found at a store in Chicago.

The three men, who live near San Francisco, have been released on bail and will appear in court on 27 October.

Music industry officials say piracy has lead to a steady decline in CD sales over the past five years. Industry officials estimate that piracy costs software and music firms tens of billions of dollars worldwide.