In Depth

How One Small Business Fought Piracy

A look at how a small Mom-and-Pop operation took the offensive against criminals who were stealing their media products.

By Scott Berinato

October 01, 2006 — CSO —

Alane Pignotti is not naive. As general manager of US Digital Media, a Phoenix-based company that

sells blank CDs and DVDs and distributes the equipment to burn content and labels onto those discs,

she knows that a certain amount of the market demand for her company's products comes from, well,

let's call them dishonest people. OK, let's call them pirates. She also knows that if someone pirates

movies and music for a living, they're probably not going to go all credible and honest when it comes

time to acquire the blank media they need to manufacture their knockoffs. They're going to try to steal

the blank discs too.

Pirates, sometimes running businesses as big as or bigger than Pignotti's, typically use credit card

fraud and check fraud to acquire large volumes of blank media before their forged checks bounce or

before credit card statements arrive at the home of an unwitting victim of identity theft.

So for Pignotti and her husband, Chris, who is the company's founder and president, fraudulent

purchases are a constant risk, more pronounced than at other midsize companies, and one for which

she's always had a singular mind-set on how to react: Take them down. "I just feel a patriotic thing

inside me," she says. "This is a problem for the whole country, and we're not going to solve it until we

all do something about it."

To do that Pignotti has essentially taken on the role of CSO. She's educated herself on the

machinations of fraud, to the point that she can tell you which neighborhoods copyright pirates operate

out of. "Right now, it's the Bronx, Chicago's South Side around South Pulaski Street, and Houston's

south side," she says. "And now, the new one is Compton," in Los Angeles.

She also knows how to detect and respond to fraud. In 2003, for example, a clerk at her company

erroneously approved some credit card purchases in which the "Bill To" and "Ship To" addresses were

different. Soon enough, the customer had used four different credit cards to make purchases of DVD-

Rs, all shipped to various addresses on Chicago's South Side. "Why not order it all at once and ship in

freight?" Pignotti asks, rhetorically raising one of the red flags for a classic fraud. "I knew we had a

fraud here," she says.

Pignotti ticks off what she did next: a reverse address lookup to find one of the credit card

holders, also in Chicago, who, of course, knew nothing about the purchases. Then she called the

Phoenix and Chicago police departments, which in turn got her in touch with Illinois State Police. That

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