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July 20, 2011

Department of Justice

United States Attorney William C. Killian Eastern District of Tennessee


Arnold also pleads guilty to Social Security Fraud

GREENEVILLE, Tenn.-- On July 20, 2011, Richard Arnold, one of four defendants indicted for a conspiracy to violate copyrights by copying and distributing counterfeit motion picture DVDs, pleaded guilty. In addition to the counterfeit DVD conspiracy, Richard Arnold also entered a plea of guilty to making false statements to the Social Security Administration (SSA) in connection with his receipt of disability benefits. Over the course of the past week, Melissa Arnold, Kristen Bailey, and Reginald Garner also pleaded guilty to the conspiracy to violate copyrights.

The defendants face up to five years in prison, a fine of up to $250,000 and supervised release of three years. Additionally, at sentencing, the court will determine restitution as a result of losses occasioned by the defendants’ offenses. The Arnolds have also agreed to forfeit their interest in equipment used to commit the offense and property derived from the proceeds obtained from the sale of pirated DVDs, including a money judgment representing proceeds from the sale of pirated DVDs.

U.S. Attorney, William C. Killian, stated “this investigation reflects the Department’s commitment to address intellectual property theft and hold responsible those defendants engaged in criminal copyright infringement. My office is also dedicated to the prosecution of those who, through their criminal acts, take advantage of our already over-burdened Social Security Administration.”

The May 2011, indictment alleges that the defendants were engaged for over five years in a conspiracy which made unauthorized copies of copyrighted motion pictures on DVDs and the labels for the DVDs, and then sold those pirated DVDs to customers in the Tri-Cities area. The indictment further alleges that Richard Arnold defrauded the SSA to receive Social Security Disability Insurance benefits to which he was not entitled, resulting in over $59,000 in benefit overpayments.

This indictment was the result of a joint investigation by the Federal Bureau of Investigation, SSA, Office of the Inspector General, and Carter County Sheriff's Office. Assistant U.S. Attorney J. Gregory Bowman represents the United States.

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