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

detective with the state police department was tracking a case in which pirated movies were selling on

the streets of Chicago. When Pignotti explained her business to him, she says, "he made the

connection." It was about that time when the customer placed an order for 6,000 more DVD-Rs, using a

fifth credit card and shipping to a fifth address. Pignotti agreed to participate in a sting operation and

bought time with the customer so that the police could set it up.

The police borrowed a truck and a uniform from the shipping company and had an officer deliver

the goods and walk out. Seconds later, uniformed officers poured in and took down the guy who signed

for the shipment. But, Pignotti says, he was just a cat's-paw, being paid to pick up a packagea

typical tactic used to shield fraudsters from receiving stolen property. "He refused to roll over on the

guy paying him," Pignotti says. "[Illinois State Police] continued to investigate. We helped by showing

where the e-mail orders originated from. The guy was making the orders from a Kinkos in Chicago.

They staked that out and looked through some surveillance tape. They figured out it wasn't always the

same Kinkos. They never found the guy masterminding the operation.

"In the end we lost about $30,000," Pignotti says. "That's significant to us. The person who made

the clerical mistake, we had to let them go. And it probably cost two more people their jobs because of

the losses." She had to make those cuts, she says, because "the business has to sustain itself."

The Case of the Boxes of Wood

Two years later, in April 2005, US

Digital Media received an order paid for with a $1,000 cashier's check. The company receives a

steady stream of fraudulent cashier's checks that it dismisses out of hand by checking the routing

numbers and sometimes having the banks inspect the physical documents. But these particular checks

had valid routing numbers. Pignotti's bank cleared the checks.

But the bank the checks were routed to immediately noticed that while the numbers were correct,

the name of the bank printed on them was not. Pignotti's bank called her and also the police, who

traced them back to Los Angeles. Pignotti connected with a detective in Compton assigned to the

case.

In the meantime, she received a second cashier's check for an order for a duplication tower from

the same person. When Pignotti told the LA detective, Fred Binion, that she would participate in a sting

and testify if it came to that, "he was absolutely thrilled," she says. "I told him if we don't start doing

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