Karen Jean Freyling, 47, and Steven Walter Butts, 62, both of Turlock have been found guilty of running a major Internet-based counterfeit DVD business as well as fraudulent receipt of government benefits. The charges included conspiracy; wire fraud; mail fraud; importing goods into the United States by means of false statements; smuggling; trafficking in counterfeit labels, documentation, or packaging; Social Security fraud; and making false statements.
Evidence at trial established that Mr. Butts and Ms. Freyling imported counterfeit DVDs in bulk from suppliers in the Philippines by means of false customs declarations. A representative of the Motion Picture Association of America testified at the trial that the defendants were selling extremely high quality pirated movies.