Suspect is jailed in brazil, charged with bribing chairman of anti-piracy committee

June 18, 2004

IFPI's anti-piracy unit in Brazil (APDIF) has confirmed the arrest of businessman Law Kim Chong, who was apprehended as he allegedly attempted to bribe the chairman of Brazil's Congressional Anti-piracy Committee (CPI). The Committee was set up in 2003 to tackle the huge problem of piracy in the country.

The arrest comes after a two-month investigation by the Brazilian authorities. It is believed that a recent operation by CPI had dealt a severe blow to Law's business when tonnes of apparently counterfeited and smuggled goods were seized during raids in his shopping centres. The piracy overlord is suspected of planning to bribe the CPI to write a positive report on him and leave his business intact.

Law had allegedly orchestrated several meetings with a policeman working for CPI. These were recorded on tape and camera, at the request of the CPI Chairman, Luiz Antonio de Medeiros. They were monitored by the Intelligence Bureau of the Federal Police in Brazilia, as well as by the General Attorney's Office in Sao Paulo. The surveillance resulted in Law's arrest on June 1, 2004.

In a public statement, Mr. Medeiros alleged: "The money came from smuggling, from piracy and from unpaid taxes. Money that should be used in public health and education - not in corruption."

The 'Xógum Operation'

It is alleged that during the first few meetings with the CPI policeman, Law's lawyer, Pedro Lindolfo Sarlo, offered to pay the CPI Chairman between US$1million and US$2.3 million in return for a favourable CPI report on Law's business. At the fourth meeting Law himself allegedly took up the negotiations directly with Mr. Medeiros, allegedly reiterating the offer in return for the CPI's report to "protect and exempt me". The courts then allowed the Federal Police to monitor the payment of the first instalment of the alleged bribe (US$75,000), after which Law and his lawyer were arrested.

Law, Chinese by birth but a nationalised Brazilian who has lived in the country for 20 years, is the owner of several popular shopping centres. He is also the supplier of products shipped from China to more than 10,000 point of sale. This is not the first time that Law has been investigated for alleged bribery and piracy activities, but he has not previously been charged or convicted for any such offences.

CD piracy in Brazil has exploded during the past five years, soaring from 5% of the CD market in 1997 to 53% in 2002 (equivalent to 114 million pirate units). In the past two years, piracy has directly contributed to the closing of two thousand legal points of sale and in the loss of an estimated 55,000 jobs. The legitimate cassette market has ceased to exist.

Paulo Rosa, Managing Director of ABPD, said: "The investigation and arrest of Law Kin Chong is a demonstration of the seriousness and determination of the Commission. The Commission's actions follow its investigation into alleged acts of piracy and smuggling of counterfeit goods and tax evasion, and its recommendations to the Brazilian authorities are eagerly awaited."

Law Kim Chong has been jailed, accused of the crime of active corruption. All his activities and businesses in Brazil are currently subject to a criminal investigation.

For further information please contact Adrian Strain or Fiona Harley at
IFPI Communications on tel: +44 (0)20 7878 7900