March 5: That Dawood Ibr-ahim’s underworld empire is involved in Bollywood in many ways is a well-known fact. Now, a report has revealed that it is also deeply involved in film piracy, the profits of which go towards actively funding terrorist activities.

The research report Film Piracy, Organised Crime, and Terrorism, released by the California-based RAND Corporation, documents the startling nexus between organised crime and intellectual property theft.

In the report, D-Company, confirmed by RAND to be operating out of Pakistan, figures not only as a big conductor of the film piracy business but also as a key link between piracy and terror funding.

The report says Dawood Ibrahim is India’s “godfather of godfathers” who runs criminal gangs from Bang-kok to Dubai.
“Ibrahim’s gang syndicate, called D-Company, engages in strong-arm protection, drug trafficking, extortion, and murder-for-hire.

He was implicated in the 1993 Mumbai bombings, and, under Indian pressure, the US treasury department designated Ibrahim a global terrorist for lending his smuggling infrastructure to Al Qaeda, and supporting Isla-mic extremists in Pakistan.”

According to an estimate by the Indian film industry, it loses about Rs 2,050 crores, or $400 million, annually to piracy. The RAND study, funded by the Motion Picture Association (MPA), details case studies in film piracy from around the world to illustrate the broader problem of criminal — and perhaps terrorist — groups finding a new and not-much-discussed way of funding their activities.

The study reveals how D-Company has been able to vertically integrate itself throughout the Indian film and piracy industry, forging a clear monopoly over competitors and launching a racket to control the master copies of pirated Bollywood and Hollywood films.

DVD piracy has a higher profit margin than narcotics and entails minimal risks of enforcement, says the report. Some documented cases provide clear evidence that terrorist groups have used money from film piracy to finance their activities.

D-Company, says the report, has morphed from a traditional crime syndicate motivated by money to a terrorist group motivated by a political agenda funded at least in part with profits from crime. D-Company has used film piracy to help fund itself, which, the report says, is what the Irish Republican Army has also done. The difference is that IRA began as a terrorist group and eventually devolved into a criminal group, while D-Company moved in the opposite direction.

D-Company has managed to extend its control to every part of the Hindi film industry. The report does not estimate how much money the don and his gang make from film piracy, but says the size and sophistication of the gang’s counterfeit DVD operation point to a highly profitable enterprise.

“D-Company was readily able to transition to film piracy through its well established influence in Bollywood. The syndicate’s al-Mansoor and SADAF brands have acquired extraordinary market power in the distribution of pirated films throughout South Asia,” says the report.

Mr Rajesh Jain of KPMG, who headed the team that authored the report on the Indian media and entertainment industry for Ficci-Frames this year, said that with digitalisation it was easy for pirates to spread their activities. He, however, declined to comment on the connection between piracy and terrorism, as concluded in the RAND report.

There have been some critics of the RAND report. They say that the fact that MPA funded the study makes it impossible to read the report without pondering whether any passage within it might be subject to spin.
But Mr Raghu Raman, CEO, Mahindra Special Services group, a corporate security risk consulting firm, says any study from RAND Corporation is above the board.

“Some of the findings are already known and are simply stating the obvious. Film piracy is much more prevalent and more profitable than any other contraband trading and trafficking. Having a pirated DVD in your cupboard is more socially acceptable than many other things,” said Mr Raman.

Express news service
Posted: Mar 06, 2009 at 1811 hrs IST

A leading US non-profit research organisation partly funded by federal and state government agencies has said the D-Company is one of three major global organized crime syndicates that channel profits from film piracy into international terrorism.
"Since the 1980s, (Dawood Ibrahim's) D-Company has been the major syndicate involved with film piracy in India," says a press note issued by the Santa Monica, California-based RAND Corporation on its report, Film Piracy, Organised Crime and Terrorism, out March 3.

"The group was transformed into a terrorist organization when it carried out the Black Friday bombings in Mumbai in 1993 that killed more than 257 people and injured hundreds more. It continues to advance a political agenda with its actions funded at least partly by the proceeds of crime."

The other two mafia groups using film piracy to fund terror, according to the note, are: the Irish Republican Army, ‘historically the best documented case’, and criminal gangs in the ‘tri-border area of Brazil, Argentina and Paraguay’.

The latter, says the report, is now the ‘most important financing centre for Islamic terrorism outside of the Middle East, channelling $20 million annually to Hezbollah’. At least one transfer of $3.5 million was made to Hezbollah by the DVD pirate Assad Ahmad Barakat who was declared a ‘specially designated global terrorist’ by the US in 2004.

According to the report, organised crime is getting increasingly involved in the piracy of feature films, adding to a criminal portfolio that already includes drugs, money laundering, extortion and human smuggling. The mafia, says the report, is involved in the ‘entire supply chain from manufacture to street sales of pirated movies’.

"If you buy pirated DVDs, there is a good chance that at least part of the money will go to organised crime and those proceeds fund more-dangerous criminal activities, possibly terrorism," said Greg Treverton, the report's lead author and director of the Center for Global Risk and Security at RAND.

"Given the enormous profit margins, it's no surprise that organized crime has moved into film piracy. The profits are high and penalties for being caught are relatively low," Treverton said.

According to the report, a pirated DVD made in Malaysia for 70 cents was sold on a London street for about $9, marked up over 1,000%, a profit margin more than three times that of Iranian heroin. Punishments are in inverse proportion: in France, for example, selling counterfeit products attracts two years in jail and a $190,000 fine, while selling drugs is punishable by 10 years and a fine of $9.5 million.

The report draws on a global pool of research that produced case studies to explore the extent of the connections among organised crime, terrorism and counterfeiting. The research is based upon 2,000 pages of documents and interviews with more than 120 law enforcement and intelligence agents from more than 20 countries, the RAND release said.

we all need to consciously stop posting screenshots and specs of pirated DVDs

we all need to consciously stop posting screenshots and specs of pirated DVDs

What's your definition of a pirate DVD?

what's yours ?

It is actually quite hypocritical of an industry that steals and borrows other people's work as frequently and as openly as they do, to complain about piracy. As the saying goes, "People who live in glass houses .....................".

Personally I am tempted to encourage everyone to buy only 'pirated' DVDs of Indian films, maybe only then will the Indian DVD manufacturers learn to respect their paying customers.

there's nothing grey at all bhaskar, hindi or otherwise.
a pirated dvd is that which is published by someone who does not have rights to do so.

but all said and done, at the end of the day, whatever is outside law, is outside law, and it becomes dangerous once money from such enterprises, however high the quality of output be, starts going into other unlawful activities, such as those the subject of this topic.

bhaskar i wonder why u are so confused.
t-series has dvd rights in india and disney has rights in US/UK. none of these are pirates.
a pirate is a bootleg -- published by someone who does not have rights to publish it in any country.

what t-series cannot do on its own is set up shop in US and sell TZP t-series there without permission from disney who have dvd rights there. and vice versa.

what you own and from where you buy is another matter and not related to DVD publishing piracy

you can buy genuine products from anywhere and have them brought over to your country, if so allowed by law, per existing laws and by paying whatever is to be paid as "import charges" if applicable. you can even shop online because when you pay by credit card, you are paying not in india but at the place where that online shop is located. and when that packet reaches your country by courier or post, whatever applicable custom charges are there would be levied.

now smuggling is another matter altogether

misprints and typos and incorrect info on a genuine DVD from shemaroo does not make the shemaroo dvd a pirate.

You seem to have missed my entire point - the fact that Shemaroo DVDs, and other DVDs like Moser Baer and T-Series DVDs are openly being sold in the UK - even though the UK rights aren't with these companies. I am aware of the process of importing goods, such as DVDs, from other countries, but if these 'India-only' products are for sale in the UK without the permission of the UK right-owner, does that make them illegal/pirated DVDs?

And I agree that 'misprints and typos' do not make a DVD illegal - but I wouldn't really class putting a fake censor certificate on a DVD either of these.