Angelica's Records Founder to Plead Guilty to Counterfeit CD Operation

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Compact disc cases stacked on shelf

The founder and president of Angelica’s Record Distributors has agreed to plead guilty to copyright infringement, four years after federal agents discovered a massive counterfeit operation at what was then a major player in Latin music. The Dallas Morning News is reporting that, pending judges’ approval, Melek Portillo will receive five years’ probation and pay $250,000 to the Recording Industry Association of America (RIAA).

RIAA spokesperson Cara Duckworth confirmed the plea agreement to Billboard. ”This closes a sad chapter in a tale of a legitimate distributor that got caught up in the world of selling counterfeits to increase her profits while robbing artists, songwriters, and record labels of their rightful due,” she said.

2011: Feds Seize Counterfeit CDs From Latin Music Distributor

Investigators from the Department of Immigration and Customs Enforcement (ICE) executed search warrants at Angelica’s headquarters in Phoenix and at their distribution centers in Dallas and Chicago on April 27, 2011. Business records and more than 150,000 counterfeit CDs — replicas of legitimate ones from all the major and indie labels — were seized. The RIAA announced at the time that as many as 75 percent of albums being sold at wholesale by Angelica’s were counterfeits.

According to court documents, Portillo allegedly had an arrangement with a California company to mass-produce the fakes, which would then be mixed with legitimate copies and sold through Angelica’s distribution centers.

In the months leading up to the raid, the RIAA had been tipped off about the potential piracy by suspicious labels, who launched their own investigations by sending undercover buyers to purchase CDs from Angelica’s locations and from retail clients. It remains unclear whether clients were aware they were purchasing counterfeit merchandise.

The ICE raids came a year after a Federal court ordered Angelica’s to pay $156,000 to indie label Aries Music Entertainment over the “unauthorized marketing and selling” of an album by Dyablo. In that case, the court concluded that Angelica’s had infringed on Aries’ exclusive right to distribute the album, despite being previously ordered to cease and desist.