DirecTV Dishes Out Charges in Satellite-Television Theft

A signal of an unexpected kind was beamed to satellite-television thieves Tuesday as federal authorities and an El Segundo-based satellite-TV company disclosed a nationwide crackdown on program piracy.

FBI officials in the Los Angeles area and security agents for DirecTV announced the arrest of 12 people and the search for three others indicted for the alleged programming and selling of counterfeit satellite signal-descrambling cards.

In a separate move, the U.S. Customs Service in Washington revealed that charges have been filed against seven other people suspected of smuggling counterfeit DirecTV cards into this country from Canada.

Authorities said the pirates in both cases sold thousands of the illegal cards for up to $425 each to viewers seeking to access DirecTV’s 210 satellite-television channels without paying for them.

Officials of DirecTV, a unit of Hughes Electronics Corp., said the high-tech theft may have cost their firm millions of dollars in lost revenue.

With DirecTV service, customers buy an 18-inch satellite dish and a receiver and pay the satellite company programming fees that range from $22 to $80 per month.

The receivers come with credit card-size electronic descrambling cards that are inserted into a slot. DirecTV engineers activate them by sending a coded signal by satellite after the dish owner signs up for service.

FBI officials in Los Angeles said the alleged pirates in their case used their own computer-operated devices to program the dish-owners’ cards. They advertised their black-market service on the Internet.

“This is an example of high-tech crime which is facilitated over the Internet,” said Rick Wade, assistant special agent in charge at the FBI’s office in Westwood.

Officials of DirecTV said security agents for their company initiated the local crackdown by answering the Internet ads. They then sent in nonworking descrambler cards--called “Smartcards” by the company--and paid the pirates to reprogram them.

Larry Rissler, DirecTV’s vice president for “signal integrity,” said the company and the manufacturer of the descrambling cards, NDS Americas Inc. of Newport Beach, also assisted in the Customs Service probe.

The Customs case involved an undercover sting operation that agents dubbed “Operation Smartcard.net” in which authorities sold 3,195 illegal cards to dealers and 382 cards to individuals. The $516,000 from the sales was turned over to the U.S. Treasury, officials said.

Customs officials said the investigation began in Blaine, Wash., in September 1998 after Customs officials noted a dramatic increase in seizures of counterfeit cards being smuggled into the United States from Canada. It ended in June 1999, when DirecTV engineers electronically shut down all of the pirated cards.

Rissler said DirecTV is offering amnesty from civil prosecution to satellite dish owners who turn in their pirated descrambler cards by the end of the month and sign up as regular satellite-TV customers. He said details about the amnesty offer are available at (800) 830-6090.

Authorities are seeking customer lists from the pirates and will decide later whether to pursue misdemeanor criminal charges against users of the illegal cards, said Assistant U.S. Atty. Aaron Dyer.

Dyer said the large losses suffered by DirecTV means that 15 suspects named Tuesday could likely face prison terms of three to five years if they are convicted on felony charges.

Federal grand jury indictments returned Friday charged 10 Southern Californian residents with manufacturing and distributing satellite-television access devices: Brett Michaelis, 20, of Duarte; Neil Tiwari, 20, of Azusa; Shahab Mokhtare, 20, of Irvine; Guillermo Quinonez, 24, of Monrovia; Christopher Wayne Hampton, 27, of Rancho Santa Margarita; Brian Keith Miller, 29, of Santa Maria; Ron Ovadia, 42, of Reseda; Russell Corby, 46, of Sherman Oaks; Ronald Keith Nottage, 50, of Castaic; and Steve Thomas Speyer Jr., 53, of Hawthorne.

Of those named Tuesday by the Customs Service and the U.S. Justice Department on charges of purchasing and reselling pirated or counterfeit access cards, four have pleaded guilty, officials said, including Michael Poulsen, of Mountain View, Calif. The agencies said charges also have been filed against Larry Thompson, of Shingle Springs, Calif.

Although the timing of the announcement of the two crackdowns was coincidental, it triggered smiles at the DirecTV headquarters on East Imperial Highway. Nationwide, the company has 8.7 million customers.

“Any time we can send a signal to those who are stealing from us that we take it seriously is a very good day,” said company spokesman Robert Mercer.

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Associated Press in Washington contributed to this report.