No, there is no death penalty. Furthermore, Intellectual Property (IP) is subject to expiration therefore maximum life that an IP might have is 10 years. About piracy, every single person does it, but they are never caught, they even profit from it. I wrote a huge list of people who are abusing Intellectual Property rights of others in Newgrounds forums (General forums), it's listed as con-artists on the internet.
Yes, they profit from it. When they're caught the minimum would be 2 years imprisonment, 5 years or a maximum of 10 years (if case involves serious violations). Some people even buy their products without caring about piracy. Piracy runs in softwares, to videos (being download and re-uploaded), to Music being (download and re-uploaded as a remix or something).
Also, don't push for making a story too sad or to severe of consequences. Let's be realistic here, a person doesn't get death penalty for piracy since the products life cycle tends to mature and soon decline (search product life cycle for more info). Also you should stop sending mails to someone who doesn't want them - you might end up in trouble.
Hit up some old movie or some old song - you might laugh at it for being 'goofy' or out of the current times tastes/trends. That's how Intellectual Property works it's subject to expiry, what old people find interesting might be boring to us.
Nice job by the narration and animation. Good use of soundtracks.