A social recluse who ran an internet piracy scam from his bedroom put the movie industry at risk of losing €165 million, a court has heard.

Paul Mahoney (30) made almost €410,000 through advertising revenue generated from illegal sites offering access to the latest films and TV shows - many before general release, a judge was told at a pre-sentence hearing in Derry's crown court.



During the six years, partially-blind Mr Mahoney operated the online racket he claimed in excess of €16,000 (£12,000) in state benefits - and when officers searched the home where he lived with his parents, they found almost £82,400 in cash hidden away, a prosecution lawyer said.



Mr Mahoney, from Carnhill in the Creggan area of Derry, has pleaded guilty to a number of offences, including conspiracy to defraud the film industry.



At the pre-sentence hearing in Derry's crown court before judge Philip Babington, prosecutor David Groome QC said the money involved in the 30-year-old's sophisticated fraud "was quite staggering".



He highlighted forensic examination of the defendant's computers and Internet history that showed in one six-month period illegal movie copies accessed through his website were viewed 1.1 million times.

Extrapolating that out, Mr Groome said: "During the six-year life of defendant's business that equates to something like movies being viewed on 12 million occasions. If you consider it is about £10 to go to the cinema or about £10 to buy a brand new DVD upon its release, it means the defendant's websites enabled users of it to view about £120 million worth of property."

He acknowledged this "fraud risk" figure would be slightly different to actual losses incurred by the film industry - as not everyone who viewed something illegally would necessarily have paid to watch it if they had not got it for free.

The investigation against Mr Mahoney was led by the Federation Against Copyright Theft (Fact) in conjunction with the Police Service of Northern Ireland (PSNI).



The court heard that the-30-year-old first started his business in 2007, and over the next six years he changed his website name three further times in a bid to evade detection.



During this period, ~Mr Mahoney was served with a cease and desist notice by Fact and was arrested twice by the PSNI.



Despite these interventions, he continued to run the fraud, the court heard.



His websites offered users links to third party servers on which the illegal movie and TV show copies had been uploaded.



The court heard that Mr Mahoney also operated one of these servers himself and found illegal content on others by using complex software he paid others to develop for him.



Mr Groome said the defendant had six separate contracts with advertising agencies, with many of the ads appearing on his sites promoting online betting companies.



Mr Mahoney's defence barrister, Martin Rodgers QC, asked why those ad agencies had not be prosecuted, insisting their culpability was greater."



They entered into agreements that if anyone visited the site they would pay, even though from a cursory view of the site it would be apparent this was facilitating criminal offences," he said.



He said his client's visual impairment led to bullying at school and had effectively turned him into a recluse from his teenage years."

For 10 years he lived the life of a recluse 24/7 in the bedroom of his home in the Creggan," he said.



"This constant and only companion during that period of time was in fact his computer."He added: "In one sense, he essentially lived in a bubble for a period of time."



The barrister claimed Mr Mahoney stumbled upon the business and rejected the prosecution assertion he was motivated by money.



"There were no Rolex watches, no Ferraris outside and no evidence of an extravagant lifestyle," he said.



Mr Rodgers added: "This enterprise took on a life of its own and became far more successful than this defendant ever envisaged."



The lawyer also noted that when the websites started making profit his client signed off state benefits.



Judge Babington said he would pass sentence on Mahoney on September 8.

Belfast Telegraph