A former employee of a disc manufacturing company in Memphis has signed a plea agreement, in which he admits stealing and distributing numerous DVD and Blu-ray discs. They include “Spider-Man: No Way Home,” which subsequently leaked online before its official release. As part of the agreement, the U.S. will recommend a relatively low sentence.

Three years ago, pirated Blu-ray copies of “Spider-Man: No Way Home” began circulating on pirate sites, weeks before its official release.

Such high-profile leaks are rare, and the source of the breach remained unknown until earlier this year.

Spiderman.JPG

In February, the U.S. Department of Justice indicted 37-year-old Steven Hale from Tennessee, a former employee of a disc manufacturing and distribution company in Memphis. While working at the unnamed company between 2021 and 2022, Hale allegedly stole numerous “pre-release” DVD and Blu-ray discs from his employer.

These stolen discs contained many high-profile movie titles including “Spider-Man: No Way Home”.

Hale Pleads Guilty

Hale initially pleaded not guilty to two criminal copyright infringement charges and an additional charge of interstate transportation of stolen goods. This week Hale changed his plea, admitting guilt to one of the charges, and signing a plea agreement with the prosecution.

Hale entered his guilty plea to Count Two of the indictment. The charge relates to his distribution of ten or more copies of copyrighted works, including pre-release movies, for commercial advantage and private financial gain. This includes the pre-release ‘Spider-Man: No Way Home’ disc, which is likely the source of the leak.

The other films covered by this count are ‘Jungle Cruise,’ ‘Venom: Let There Be Carnage,’ ‘Encanto,’ ‘Eternals,’ ‘The King’s Man,’ ‘Shang-Chi and the Legend of the Ten Rings,’ ‘Resident Evil: Welcome to Raccoon City,’ ‘Marry Me,’ ‘Sing 2,’ and ‘The Matrix Resurrections.’

Plea Agreement
Plea.JPG

Lower Sentence, Limited Damages

As part of the agreement, the prosecution agreed to drop two other counts and the Justice Department will recommend that the court awards the maximum available sentence reduction because Hale accepted responsibility. It will also recommend that the defendant is sentenced at the low end of the guideline range.

For the remaining count, Hale faces a potential maximum penalty of five years imprisonment, a $250,000 fine, and three years of supervised release. In addition, he has also agreed to pay restitution to all identifiable victims who suffered losses due to his criminal conduct.

Interestingly, for sentencing guideline purposes, the plea agreement puts the “infringement amount” between $15,000 and $40,000. That’s lower than the tens of millions of dollars in estimated losses mentioned in the indictment related to ‘Spider-Man: No Way Home. The final damages amount has yet to be determined by the court.

1,160 Blu-rays and DVDs

The plea agreement doesn’t add much detail to what is already publicly known. Importantly, however, it does reveal that law enforcement seized approximately 1,160 Blu-rays and DVDs from the defendant on or around March 14, 2022.

This means that the authorities had tracked down Hale as a potential suspect just days after the ‘Spider-Man’ movie leaked online. After that, it took nearly three years before the defendant was indicted.

Why the indictment took so long is unknown, but the case may have been part of a broader ongoing investigation.

Speculation and Sentencing

While one can only speculate beyond this point, it is worth pointing out that the early online leaks of “Spider-Man: No Way Home” were shared publicly by the infamous release group EVO. This group was known for distributing pre-release content.

A few months after the authorities tracked down Hale, EVO was dismantled by the Portuguese authorities. There is no evidence to suggest that these two cases are connected, but it’s not impossible either.

What we do know for sure is that Hale will be sentenced by the District Court of Tennessee later this year. This sentencing hearing is scheduled to take place at the end of August.