MEXICO CITY ? When hundreds of Mexican police crashed through the doors into a warren of mysterious warehouses and humming laboratories, they uncovered one of the largest illegal manufacturing centers of pirated movies and music ever found in Latin America.
The pre-dawn raids last month netted 12 tons of movie disks and more than 1,000 DVD burners, enough machinery to produce a staggering 500,000 counterfeit copies of ?Kung Fu Panda 2? a day, if the factories were running at capacity.
Defenders here in the rough barrio of Tepito, famous for its black-market bazaar, threw spikes down into the street to blow the tires of the crusading police. No arrests were made, and Mexican officials shrug that they do not know who ran the laboratories. But according to U.S. officials and American producers of the stolen films, music and software, Mexican drug cartels lurk in the shadows.
Led by the notorious La Familia and Los Zetas drug mafias, Mexican cartels now take a big cut of the hundreds of millions of dollars in bootleg disks sold in Mexico each year, according to U.S. officials and representatives of film studios and software manufacturers.
?This is no longer a victimless crime. There is blood on the product,? said Federico de la Garza, managing director of the Motion Picture Association in Mexico City, whose own investigators work closely with the Mexican attorney general.
Disk piracy and U.S. copyright violations are a challenge around the world, but in Mexico the sale of bootleg copies of ?Toy Story 3? and Microsoft Windows XP are funding the powerful mafias whose relentless violence has left more than 35,000 Mexicans dead in the past four years.
Mexico has become the pirate capital of Latin America, exporting so many bootleg movies to Central America, for example, that the major studios no longer bother to sell their products on the shelves there, according to industry watchdogs.
And in Cancun or Monterrey or Tijuana, when you buy a bootleg Disney movie for the kids, it is as likely as not to bare a stamp that shows it was distributed by the Zetas (a stallion) or La Familia (a butterfly).
Video piracy is ubiquitous in Mexico, where more than nine of 10 movie DVDs sold are counterfeits. Mexican authorities rarely seize products from street dealers or market stalls. U.S. officials in Mexico suspect many vendors give kickbacks to local authorities to allow them to operate.
The bootleg units sell for about $1, versus the $12 charged for legal disks, and though the sound and picture are sometimes inferior, the copies are generally decent. Box-office blockbusters are available on the street a couple of days after they open in theaters in the United States.
About 26�million legitimate DVDs are sold in Mexico each year; another 235�million are bootlegs, according to the motion picture industry, which claims the bootlegs account for $300�million to $600�million in lost revenue. Some critics suggest that U.S. film studios are selling their product at a price point far above what the average Mexican is willing to pay and thus are stoking the piracy boom.
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