The phone rings a little after 1 in the morning. Randy blinks awake and wonders who's calling at this hour. Most likely, it's somebody in the States complaining about a defective DVD. What the hell is wrong with these people? The customer service policy specifically says not to call between 11 pm and 8 am. Then again, most of his customers don't notice that their source for cheap movies lives in China. They certainly don't imagine him holed up in this two-level, 3,000-square-foot apartment, 29 stories above Shanghai's endless traffic.

But the call could also be from Juliya, his Ukrainian girlfriend. Well, ex-girlfriend. She's probably still mad at him for stabbing her with that kitchen knife, but maybe she's come around. After all, she cut him first. He still has the jagged spot on his right hand where she got him. It's been a few months since she left. He's a little lonely.

In his rumpled polo shirt, he shuffles groggily downstairs to his mahogany-paneled living room. The place has gotten even messier since Juliya left. The built-in bookshelves overflow with thousands of DVDs. In the halogen-lit dining room, 10,000 discs are piled in boxes on the floor. Randy picks up the phone near the front door.

"Hello?" he says, wavering between crankiness and hope.

"We just do our regular check," a stern Chinese-accented voice squawks. There's static and a pronounced echo on the line, which tells him the call is coming from the intercom in the tiled hallway. Outside his apartment door, four grim-faced Chinese cops are standing, quiet and tense. "Please open door please."

"A regular check in the middle of the night?" Randy counters. "That's bullshit. You're a liar." It's probably a gag. Friends are always joking that Randy will end up in prison. But people like him don't go to jail. His great-great-grandfather was Andrew Carnegie's business partner, Henry Phipps. He's one of about 200 in line to inherit the multibillion-dollar Phipps fortune. Plus, his family owns Bessemer Trust, the bank that manages the Bush clan money.

"Not liar," the cop says, a new edge to his voice. Somehow, conversations with Randy have a way of quickly devolving into schoolyard taunts. The cop nods at a heavy-set subordinate. The guy steps back and busts down the door, throwing splinters across Randy's expensive hardwood floor. Two cameramen who accompany the cops - a crew from a popular reality TV show called Oriental Police - zoom in, making Randy look small and vulnerable.

"Now you are cited," the cop informs Randy brusquely, showing him a warrant. The charge: being the kingpin of a massive international DVD piracy ring. They drag him into the elevator, push him into a small squad car, and take him to a concrete holding cell.

Randy's arrest on July 2, 2004, is the culmination of Operation Spring - the first joint Chinese and American effort to enforce intellectual property laws. It represents a momentary alignment of political, economic, and social forces spanning the Pacific, and it spells nothing but bad news for Randolph Hobson Guthrie III. Almost $100,000 in cash is confiscated from his apartment. His personal inventory of 120,000 DVDs is seized. The police interview him for eight hours, then send him to a 10- by 20-foot cell with a dozen other suspects - drug dealers, murderers, common thieves. In 24 hours, Randy has gone from the penthouse to the pen.

All the players in the arrest - Beijing, Hollywood, Washington - have something to gain from the downfall of the 38-year-old scion. The Chinese score a public relations triumph and can now claim to be complying with US demands to crack down on China's notorious intellectual property violations. The movie studios, which supplied some of the evidence in the case, are thrilled that a distributor of pirated films has been nailed and that a precedent has been set. For US authorities, Operation Spring helps establish some tentative ties between customs officials and China's Ministry of Public Security. And, they say, it's a step toward disrupting criminal and terrorist organizations financed by the sale of bootleg DVDs. "This landmark case will serve as a road map for future intellectual property rights investigations," says Michael J. Garcia, assistant secretary of Immigration and Customs Enforcement.

Maybe. Or is Randy Guthrie just a rich, foolish American in the wrong place at the wrong time? The answer to that question goes back 11 months and nearly 8,000 miles. It jumps 14 time zones, stretches down a dusty country road, and begins among a collection of open-air sheds in southern Mississippi.

The dust swirls up behind Alan Prejean's blue Chevrolet Malibu as he pulls up onto the partially paved entrance to the A1 Trade World Flea Market & RV Park outside of Pass Christian, Mississippi. It's August 2003, and he's got the air-conditioning on full blast. Prejean, a 32-year-old former deputy sheriff from Baton Rouge, is now a newly minted customs agent. It's a whole new level of responsibility. This is his first bust, and he wants to do it right. He's wearing wrap-around Oakleys, and his gun is strapped firmly to his waistband, concealed by the tail of a short-sleeved cotton button-up. He's trying to look calm, cool, and unobtrusive. Everything about him screams cop.

But that's OK here at the A1. Michelle Whitfield, the owner, likes to joke that her flea market is a training camp for customs officers. Inexperienced agents come here to confiscate contraband Sharpies and substandard extension cords. Prejean is the latest.

He was here two weeks ago to lecture Whitfield about the flood of counterfeit goods streaming into flea markets and swap meets - everything from knockoff "Durayell" batteries to fake Nikes. She listened, mainly because he was cute and Cajun. This morning, when she noticed a vendor hawking suspicious DVDs, she thought it wouldn't be such a bad idea to get Prejean back out for a look.

When he steps out of the Malibu, the heat hits him like a wet slap. He starts sweating immediately - so much for looking cool. He tries to appear casual, walking through the three long sheds that shelter the market and scanning the displays of confederate flags, commemorative coins, and used lawn mowers. Everything around him is moving slowly.

Finding Nemo. Prejean sees it first. But then there's an entire table covered in new releases. "These are still in theaters," he says to the couple behind a table. Then he fishes out his badge and tells them he's confiscating the discs. The couple plays dumb - they got the discs online at ThreeDollarDVD.com and drove down from Alabama to resell them. They thought they were legitimate.

"Three-dollar DVD?" Prejean asks, looking serious and taking notes.

Later, after he's returned to the office and logged the confiscated DVDs as evidence, he sits down at his computer and pulls up the site. Sure enough, almost all of Hollywood's hot releases are for sale. He checks Whois, the public database that lists the owners of Web domain names. The search returns a mailing address in China. Prejean is not surprised. China is the world capital of boot-leg DVDs, and the discs he confiscated had Chinese lettering on them. What does surprise him is the site's administrative contact address: randyguthrie@yahoo.com. It doesn't sound very Chinese.

It's the summer of 1979, and Randy Guthrie is making friends with the pigeons. The tourists in Venice pay no attention to the well-dressed 12-year-old cooing at the birds - they're preoccupied with Saint Mark's Campanile and the Grand Canal. But for Randy, the sights hold no interest, even though this is his first visit. His mother loves this place and has devoted her career and a portion of her fortune to saving the sinking city.

Randy couldn't care less. He likes numbers and machines and clucking birds, not people and ancient buildings. His mom thinks there's something wrong with him. She has been sending her oldest son to psychiatrists since he was 4, and he's still not turning out like the rest of the Guthrie-Phipps family. Randy's dad is in the process of making a name as one of the country's top plastic surgeons. In the '80s, he'll pioneer a new method of breast reconstruction and become the chief of plastic surgery at New York Downtown Hospital. He's an outgoing and charming man. His marriage to Beatrice Mills Holden, a beautiful and wealthy heiress, is a fantastic match. Great things are expected of their offspring.

But Randy is what people discreetly call "different," which particularly distresses his mother. When Randy brings home a pigeon to their apartment at the Hotel Gritti, Beatrice Guthrie discovers that it's infested with lice. She encourages him to pay more attention and study harder at school. Most of the teachers at the boarding schools he's been sent to in the US and Europe say how smart he is. Some even call him brilliant.

Maybe the fact that he is expected to be outgoing and socially adept makes him bitter. When he does talk, he tends to lecture his elders on arcane aspects of bird physiology or the finer points of circuit board design. He can't look people in the eye, and sometimes he lashes out verbally, saying the first cruel thing that comes to mind. If a woman he meets has a big nose, he tells her so and asks why she doesn't get it fixed. All he really wants to do is play with the PC his dad got him from RadioShack, a TRS-80.

In many ways, the DVD has saved Hollywood. Theater attendance is slipping, but sales of DVDs have soared, now accounting for nearly half of total revenue earned by the studios represented by the Motion Picture Association of America. In 2004, that amounted to more than $20 billion worldwide. Almost none of that came from China. The world's biggest country is a black hole on the MPAA's map, in large part because the Chinese strictly censor films. The government officially allows only about 15 American films a year into theaters, where the ticket price is as low as $4. But a DVD of almost any film - new or old - can be bought on the streets of China's major cities for around $1.

In effect, government censorship has become a trade barrier that protects the bootleg market. Since most US films cannot be legally shown, the demand is met by DVD pirates. The studios have watched helplessly as fake copies of Wedding Crashers and War of the Worlds are hawked from plastic folding tables in Shanghai and Beijing. "Piracy has decimated any market we might have in China," says Mike Ellis, director of the MPAA's Asia-Pacific office. "But right now, our greatest fear is that the flood of pirated films in China will start to move out of the country."

It's already happening, as Prejean found when he confiscated the DVDs at the A1 flea market. Just to make it official, he mails a sampling of the discs - a box set of James Bond movies - to the MPAA, which in turn forwards the discs to MGM. Laura Tunberg, a lawyer who heads the studio's antipiracy department, picks up the collection, flips it over, and eyes the holographic decal.

Her first thought: They're pirated.

MGM, which owns the rights, has never offered a box set of all the Bond films. Plus, she points out, this collection includes Die Another Day, which hasn't even been released on DVD. Anyway, she already knows where they came from; she's been buying from Randy for more than a year. She has the discs shipped to her assistant, who brings them in to the studio. The MPAA is, in fact, preparing a report on Randy's site that will be part of an official complaint to the Chinese government. Though Tunberg has seen plenty of online storefronts that sell pirated DVDs, Randy's site has left an impression. "The whole thing is a strange mixture of brilliance and insanity," Tunberg says. It's slickly designed, well organized, and easy to search by title, actor, or director. But in the Forum section, topic headings include discussions on how to dodge eBay's restrictions on trading in copyrighted materials and how to get back on the site after being booted. Under Telephone Service Policy, it says, "There is no customer service via telephone. You cannot order over the phone. Please do not call us on the phone expecting to check your order status or other such issues." A few lines later, it says, "Please feel free to telephone if you have not been receiving replies to your emails or if you think that the customer service that you have been receiving has been poor."

The question that keeps coming up in the minds of people like Prejean and Tunberg is "Who the hell is this guy?"

Randy's first stop after finishing grad school in the spring of 1991 is Wall Street. With two master's degrees from an Ivy League school, he lands a job as a mergers and acquisitions analyst at Booz Allen Hamilton, a top consulting firm. It lasts three months. He's told it's just not working out. It's a bad start, and Randy's career only declines from there. He goes after a hedge fund position, tries for another consulting gig, asks his friends for help. He wants to be self-sufficient, to prove himself to his parents and the world. Desperate, he quietly takes a temporary job as a clerk at Tower Records. At least he can say he has a job - until he's fired for insulting the customers.

Fortunately, there's a place for the Eastern Seaboard's rich and misunderstood: Palm Beach. Various members of the Phipps family have had estates there, so Randy packs up his BMW and heads south to try his luck in Florida.

At first, it goes well. In the fall of 1994, he opens a shop selling used, refinished office furniture. The moneyed locals are amazed to see somebody with his background actually working. Tom Davis, a dapper fiftysomething with a fleet of Ferraris, stops in to browse and advises Randy to go into real estate, get a Porsche, and race yachts. To get him started, Davis offers to sell him a $40,000 fixer-upper condo in Miami Beach. Randy has to petition his trust for the money - his wealth is doled out at $5,000 a month. If he wants more, he has to ask the trustees in charge of his allowance: his parents. Randy gets the money.

A couple of weeks later, Davis stops in at the apartment and is astounded to find Randy on his hands and knees, refinishing the hardwood floors by hand. Randy had rented a sander, and set about doing it himself. Davis is impressed - and more than a bit surprised. "No Phipps had done manual labor for over 100 years," he says.

Randy sells the place for $80,000 six months later, and, on Davis' recommendation, takes partial payment in the form of a classic Porsche. Now he can feel he belongs among the rich - he's made a little money, and he's also made a friend. Davis is exciting to be around. He says things like "I had to sell my castle in France to pay for my second divorce" and "I had to have my arm re-attached after it got ripped off en route to the speedway in '78." He is everything that Randy isn't: suave, charming, and daring.

On the heels of his condo success, Randy buys a 70-foot antique yacht. He starts collecting classic sports cars and adds a 56-foot sailboat to his fleet. He figures he'll restore them and make a fortune.

But things start to go wrong again. First, a hurricane destroys the yacht after Randy pours more than $100,000 into it. Then a river floods near his storage facility and ruins his cars. And finally his sailboat is struck by lightning, destroying the electrical system. He has lost his entire maritime investment. His attempt to build the life of a conventional wealthy heir ends abruptly in fried circuits and defeat. He was raised to be accomplished, successful, and confident, but he keeps ending up unlucky and isolated.

On July 16, 2003, Interpol secretary general Ronald K. Noble appears before a hearing of the House Committee on International Relations. DVD piracy, he testifies, isn't just hurting Hollywood - it is funding terrorists. "Law enforcement agencies have to recognize that intellectual property crime is not victimless," he says. "Because of the growing evidence that terrorist groups sometimes fund their activities using the proceeds, it must be seen as a very serious crime with important implications for public safety and security."

He ticks off a scary list of groups: al Qaeda, Hezbollah, Chechen separatists, ethnic Albanian extremists, paramilitaries in Northern Ireland. All, he says, use boot-legged DVDs and other pirated products to launder money and generate income for their operations. Counterfeit goods, he says, are becoming "the preferred method of funding for a number of terrorist groups." Something has to be done.

The movie studios certainly agree. MPAA lobbyists tell anyone who will listen that Hollywood is losing more than $5 billion a year to pirated DVDs. Most of those are coming out of China. Obviously, any strategy to reduce DVD piracy must contend with Beijing.

The Chinese, however, are loathe to crack down on an industry that pumps millions of dollars into the economy and employs thousands of low-level workers who would otherwise be left out of the Chinese economic explosion. So the Chinese turn a blind eye to the trade. In 2003, only three people in the entire country were known to have been charged with violating China's piracy laws. True, authorities seized 224 million pirated discs in 2004, but that's just 1.5 percent of the estimated 15 billion bootlegs manufactured that year. The police like to stage the occasional raid, pile up a bunch of discs, and light them on fire for the cameras.

Except that now the international community is playing the terrorist card. Not only is the MPAA implicitly calling the Chinese corrupt and thieving, but Interpol and the US Congress have broached the possibility that the Chinese are helping al Qaeda. A clear message needs to be sent.

For Randy, Shanghai is like Shangri-La. He visits the first time in the early '90s after meeting the governor of Hunan province at a party hosted by Fidelity Investments in New York. The governor invites him to come and have a look around, and Randy, fresh out of luck in Palm Beach, makes the journey.

It's an eye-opening trip. Shanghai is the perfect antidote to South Florida and New York. In Shanghai, nobody knows that he's a failed Phipps, and nobody could give a damn anyway. Randy finally has the space he needs to reinvent himself. His tendency to insult people blends right in here. Or it's dismissed as the fumbling of a new Mandarin speaker. Plus, Shanghai is on the verge of an economic boom and is crowded with people out for a quick yuan. Probably for the first time in his life, Randy feels almost normal. In 1995, he decides to move to China.

He starts working hard on his Mandarin and buys the nicest home he can find in Shanghai: a two-story penthouse apartment in a new building. It's near the Ritz-Carlton, which houses the Long Bar, Randy's favorite hangout. A couple nights a week, bikini-clad Chinese women put on a "fashion show" for the largely male expat crowd. A poster in the men's room offers 20 reasons why a beer is better than a woman. ("Number 1: A beer doesn't get jealous when you grab another beer.") It has always been hard for Randy to know when he is being offensive, but now he doesn't have to worry about it.

The same year he moves to China, the American Psychiatric Association releases an updated diagnostic manual. It includes a new disorder called Asperger's syndrome: a form of autism characterized by extreme social awkwardness, inability to make eye contact, an obsessive level of focus - often on machines or computers - and the tendency to lecture others on obscure subjects. Randy's psychiatrists tell Beatrice Guthrie that her son fits the profile, and she thinks it explains a lot about his troubles. She believes he needs more counseling - not a hideaway in a far-off country. "There are medications that can treat the symptoms of Asperger's," she says. "I just don't know if China is the right place to go for treatment."

Some of Randy's oldest friends dismiss the notion that he needs treatment at all. Yes, he's eccentric, and certainly spoiled and arrogant. But he's also brilliant and at times even likable, says Allan Block, chair of the Pittsburgh Post-Gazette, who has known Randy for 12 years. "If anything, he has chronic insult syndrome," Block says. "He is just so knowledgeable about everything, and he isn't afraid to let people know when they're wrong."

In August 2003, Prejean gets official word from the MPAA: The discs from the flea market are definitely pirated. He realizes that he's on the front line of what's shaping up to be a major international sting. Prejean's boss, Steve Thomas, the customs agent in charge of southern Mississippi, calls the federal prosecutor's office in Biloxi, and Jay Golden, an assistant US attorney, is brought in to help assemble a case.

It's a complicated task, primarily because there is no mutual legal assistance treaty between China and the US - a treaty that would spell out common legal ground so that evidence collected in either country conforms to laws in both. Negotiating such an agreement seems unlikely, given that China has barely figured out how to prosecute intellectual property crime at home.

So it's a little surprising when the Ministry for Public Security agrees to cooperate with the US. For the Chinese, it makes perfect sense. Randy's case is a unique opportunity for them to show that they're tough on piracy while arguing that Chinese citizens aren't the only ones to blame. It allows them to point out that the Americans complain the loudest and yet one of their own is a leading violator. The Chinese bureaucrats have a keen sense of irony.

DVDs are everywhere in Shanghai. Locals hawk them in bars, peddle them on the streets, and sell them in stores that carry thousands of titles. The going rate is as little as 7 yuan - about 85 cents apiece. Everybody knows they're pirated and, as far as Randy can tell, no one cares.

His business plan is simple: He can buy discs wholesale for 60 cents, and sell them for a significant markup in the US. He walks downstairs, strolls down the street to a government-licensed DVD shop run by Jin Jianyong and buys a bag full of discs. Back upstairs, in his home office, he posts a few on eBay to gauge the market. The bids tumble in, and the discs sell for more than $3 each.

"Oh," Randy thinks. "This is a good thing."

After the first auctions that night in early 2002, Randy returns to Jin's shop and asks if he can fulfill big orders. Jin says yes; all he needs is a list of titles. Randy gives him one and posts more online.

It's a beautiful business. He doesn't have to leave his penthouse - the discs are delivered, and DHL picks up the outgoing shipments from his living room. Soon he's selling thousands a week. By late 2003, he registers a Web site of his own, ThreeDollarDVD.com, and hires Chinese workers to help him stuff the discs into envelopes in his dining room.

His friends warn him that he's mad to do this, that he's violating any number of laws. Block, Davis, Narayanan - they all tell him that he's bound to anger some serious people. Randy thinks they're overreacting. They don't know what it's like in Shanghai. "It's the Wild West out here," he says. "Nobody cares."

And anyway, why does everybody want to put a damper on things now that they're finally going so well for him? He's even found a nice Ukrainian girl online - she answered his posting on a Web site - and convinced her to move to Shanghai in July 2003. Juliya, 27, is the daughter of a retired politician. She's a knockout, and she's also smart enough to contend with Randy. If he starts to lecture and bludgeon her with his intelligence, she accuses him of being uncultured. "Have you read Balzac?" she taunts. "No. Have you read Dreiser? No. Do you even know who Dreiser is? No. So be quiet for a while."

And he shuts up and smiles at her.

Joe Zimny, a mortgage broker, is at the door. It's 10:30 am in early 2004, and Randy is wearing a dirty white bathrobe. His hair is a mess. There are racks and racks of DVDs in a poorly lit room adjoining the entryway - like a Blockbuster in hiding. Three Chinese workers are having lunch on the floor in the far corner of the marble-walled kitchen. Randy pays no attention to them. "They've been here for years remodeling my apartment," he says.

Randy sits on the couch in the living room beside a stack of DVDs and a pile of shipping envelopes. "You selling DVDs on the Internet or something?" Zimny quips, taking a chair. This is the first time Zimny has met Randy, who rang him up a few days ago to inquire about refinancing the condo. Randy explains that he's got some new business ventures in mind and needs more capital. Plus, his DVD business is growing rapidly and he needs to expand. There are a couple of units for sale in his building. He doesn't want to go to his trust for the money. Now that he's a proper businessman, he'd like to do it on his own.

"Jesus Christ, I was joking about the Internet thing," Zimny stammers. "How many are you selling?"

"I made $25,000 last month," Randy says.

Zimny is fascinated, scared, and impressed. Randy is building an empire up here on the 29th floor. He and his crew of Chinese workers - now as many as six of them working eight hours a day - are shipping about 2,000 discs a week out of his apartment. Juliya saunters past wearing tight pants and a skimpy blouse. Her hair is done up and her makeup is perfect. She pays no attention to the man in a suit sitting beside her boyfriend.

"What about US customs?" Zimny asks, trying to focus on Randy.

Randy reaches under the couch and pulls out a handful of crumpled letters. "They tell me to stop every now and then, but it doesn't matter," he says. "They can't do anything." The letters are from customs agents in Alaska telling Randy to stop sending bootleg DVDs.

"How do they know where you live?" Zimny asks. Before Randy can answer, Zimny glances at the stack of express mail envelopes beside the couch. On the preprinted labels, Randy has listed his penthouse as the return address, home phone number included.

Zimny says he forgot to bring the necessary forms and gets the hell out.

It's a 21-hour trip from Biloxi to Beijing. Prejean has to take a small jet to Atlanta and transfer in Tokyo, but he doesn't care: He's launched the bust of the year, and he's going to China with Steve Thomas, the boss. Tom Hipelius, the customs attaché in Beijing, has negotiated two spots for American observers on the Guthrie strike team in Shanghai.

The team already boasts some of China's highest-profile cops and officials from the country's Economic Crime Investigation Department and Shanghai's Public Security bureau. Prejean will be the junior man on the team. It's his first time out of the country. It's nearly his first time out of the South. It's a damn good first bust.

When Prejean and Steve Thomas arrive in China on June 22, 2004, Hipelius teaches them how to say thank you in Mandarin and reminds them that they have no authority here. They are strictly observers and should offer advice only if asked. They aren't even invited to the actual arrest. The Chinese are going to run this show.

A week later, after a meeting at the Ministry of Public Security, a government car drops Prejean back at his hotel. It's a little awkward. At the meeting, he sat with the Chinese cops, told them what he would do if this were Biloxi, and wished them luck. There's nothing more for him to do; he heads back to his room and gets ready for a day of sightseeing.

Randy keeps a bottle of Jim Beam beside his couch and starts taking swigs directly from the bottle at the end of each day. It helps keep the paranoia at bay. He's now convinced that undercover US agents are following him in China. He prefers to stay inside and use the phone but finds that almost everyone he talks to is intolerably stupid. It's gotten to the point where he can discern stupidity within the first few words of a conversation, and it sets him off. He regularly goes from friendly hello to hysterical, belligerent screaming in a matter of seconds.

Juliya pays no attention. She doesn't care about his business. But she does care about his lying. At least once a day, he says he's going out to the bank. There's something suspicious about the way he says it, so she watches from the balcony, waiting to see him exit the lobby 300 feet below. He never appears, and Juliya decides that he must have a mistress in the building. She knows he doesn't like to leave the apartment - that's why he's running his business out of the dining room. It makes perfect sense that he'd keep his mistress nearby as well.

When he comes back, she confronts him in the kitchen. He says that he did go to the bank - he just walks close to the wall on the way out. She can't believe that he's still lying - that she's come all the way from Ukraine to be with him, and he's cheating on her. He tells her to take a Prozac, and she grabs a knife. With a lunge, she slices open his right hand. He wrestles the knife away and chases her around the apartment. He lashes out, cutting through her clothes and sinking the knife into her lower back. She runs screaming into the hallway and is taken to the hospital by a neighbor. There's blood all over Randy, the floor, and his DVDs.

A few months later, when the Public Security agents break through the front door to arrest Randy, it doesn't take them long to find his warehouse. He has more than 120,000 DVDs stored in an unfinished apartment across the hall. He wasn't completely lying to Juliya - he didn't have a mistress in the building: He had just become more secretive about his business. The cops take him to a detention center and interrogate him for the rest of the night. In the morning, he's put in a small cell with other foreign criminal suspects.

Across town, the phone in Prejean's hotel room rings. It's done.

Within days, everyone involved is calling it a landmark arrest. The Ministry of Public Security declares that the case shows that China places a "great emphasis on fighting intellectual property crimes." Chinese officials note that US law enforcement was able to "accumulate precious experience" by watching the Shanghai cops in action. In the news segments that air on state-run TV, viewers see Chinese cops leading Randy out of his penthouse and, later, Prejean shaking hands and congratulating ministry officials.

At the same time, US authorities can argue that Randy's case has laid the groundwork for future cooperation between the two governments. It's the first time that the US and China have worked together on an intellectual property bust. The MPAA is happy because, finally, someone has been arrested in China. It's a historic case, a road map.

That is, if other counterfeiters are as careless as Randy Guthrie. But what if they take precautions, cover their tracks, work within the system that allows the trafficking of billions of DVDs? To them, Randy's arrest offers no cautionary tale at all. "The case, more than anything else, is a road map of how to prosecute a dysfunctional rich kid caught in the middle of an international political tug-of-war," says Diana Matthias, an intellectual property consultant in Shanghai. She organizes factory raids in China to try to control the spread of counterfeits. She had met Randy and was aware of his business. Her opinion: He was a two-bit player whose arrest was supremely convenient.

Operation Spring won't have any effect on China's counterfeit DVD industry, says Anne Stevenson-Yang, the former managing director for the Beijing-based US Information Technology Office, an umbrella trade group that represents tech companies. "The whole thing was so sordid and useless," she says. The Chinese government is not interested in protecting private property rights, she adds.

In fact, piracy is the unofficial official policy. The state licenses many retailers of pirated DVDs and collects taxes on their sales. And, in a country where the economy is still tightly monitored and regulated, there's every reason to believe that the government has some control over the illicit DVD market.

Certainly the Chinese government has shown little interest in widening the net to prosecute anyone beyond Randy's immediate circle. In April, he was convicted of violating China's intellectual property laws, was fined $60,500, and began serving a two-and-a-half-year sentence in Chinese custody. (Randy's Chinese lawyer was able to convince the court to drop the charge of operating an unlicensed business, which carries a prison term of 15 years.) After that, he'll be deported. Two of Randy's employees were arrested and jailed. The shopkeepers who sold him the discs were also arrested.

But the authorities didn't follow the trail any further. They didn't arrest the middlemen. They didn't trace the discs back to the factories that produced them. They didn't investigate the sources of the original digital files. The extensive network that supplied Randy's business is healthy and intact.

Meanwhile, the US government continues to pursue Randy's prosecution. On July 13, the office of Jay Golden, the assistant US attorney in Mississippi, indicted Randy on 17 counts of smuggling, copyright violations, and interstate trafficking of counterfeit goods. The government is also seeking approximately $1.1 million in cash. "A lot of the time, people can't pay the penalties," Golden says. "This case might be different."

In June, Randy's mother flies to Shanghai from Venice to see her son. It's an unpleasant task for Beatrice Guthrie, but she feels it's her duty. Her husband decides to skip the trip, saying he is too fatigued by the Venice to New York leg to continue on to China.

She meets Randy in a large open room in the prison. He's wearing a blue uniform and has a facial twitch. He looks older. An English-speaking guard sits beside her taking notes on everything she says.

"How are you?" she asks.

Randy doesn't know where to start. This last year behind bars - first in the tiny detention cell and now here - has taken its toll. For a while, he thought the guards had it out for him. They put him in with the most violent criminals. Everywhere he looked, he saw conspiracies. He thought he had melanoma. The authorities wouldn't let him take his medications. And now his mother has suddenly appeared in front of him. He doesn't know where to start.

So he tells her he has no complaints. "Cheap Chinese food is far better than cheap American food," he says. Beatrice Guthrie tries to be upbeat about the visit. Randy has no choice now but to confront his demons, whatever they may be. He has hit bottom and been stripped of almost everything. "Now he's being forced to accommodate other people," Randy's mother says. "This may be a turning point for him."

Contributing editor Joshua Davis (jd@joshuadavis.net) is the author of The Underdog: How I Survived the World's Most Outlandish Competitions.

Guthrieés arrest was a PR coup for Beijing. Star TV, a Chinese satellite service, broadcast his sentencing, which took place in Shanghai Number 2 Intermediate Peopleés Court on April 19, 2005.



credit Colby Lysne

Alan Prejean, a US Immigration and Customs Enforcement agent, launchedOperation Spring with a bust of contraband DVDs at a flea market in Mississippi.



Randy Guthrie

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