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April 21st, 2002, 10:23 AM
Satellite TV pirates liable to face legal static
Waukesha man charged in theft, sale of access
By LISA SINK
of the Journal Sentinel staff
Last Updated: April 12, 2002
Waukesha - Freeloaders, beware: The growing number of people pirating satellite TV channels are being targeted for civil and criminal prosecution.
DirecTV executives issued the warning in response to charges filed against a Waukesha man accused of stealing and selling hundreds of doctored access cards that allow buyers to get dozens of free channels.
Neil Rataczak - who was the state manager of a company that distributed DirecTV products - stole cards from the company and threatened to fire or kill an employee unless he helped him, a criminal complaint alleges.
Rataczak, 32, of Waukesha, warned the employee that if he turned Rataczak in, the man and his wife would both "end up in a hole somewhere," says the complaint, filed in Waukesha County Circuit Court.
Authorities said they couldn't estimate how much money Rataczak netted, but employees told them he sold hundreds of cards for $300 to $500 each.
If Rataczak is convicted of felony theft and the other charges filed against him, he could be imprisoned for up to five years.
Industry officials say the case demonstrates the growing problem of consumers' stealing access to hundreds of extra television channels.
"It's a serious problem," said Larry Rissler, vice president of DirecTV's Office of Signal Integrity.
Rissler would not estimate the annual economic loss from piracy, saying it would "rattle Wall Street."
DirecTV is the nation's leading satellite provider with 10.7 million customers.
Last year, DirecTV filed 159 lawsuits against suspected pirates and hackers and cooperated with law enforcement in nearly 100 criminal cases, Rissler said.
Some traffickers of hacked systems have been sentenced to prison, he said.
Customers obtain DirecTV channels with a satellite dish, set-top receiver and access card. The card - about the size of a credit card - has embedded microchips with codes that allow for reception of only the channels for which the consumer pays.
But Rataczak and others across the country have been charged with reprogramming the cards so users can obtain about 200 channels for free.
For the paying customers, DirecTV costs $73 a month to get the entire package of channels, including about 30 premium movie channels. A more basic package with 130 channels and no premium movies costs about $32 a month. The dish and installation run just under $50, Rissler said.
DirecTV delivered a major blow to hackers days before the 2001 Super Bowl.
The company sent an electronic code through its satellites to the access cards to disable all unauthorized ones, Rissler said.
Hackers refer to it as "Black Sunday."
Rissler said that the company now repeats this scrambling process about once a week. But hackers are getting around the move by getting new cards or reprogramming existing cards, according to hacker Web sites.
One site said, "Reprogramming your card once every four to 10 days is not uncommon anymore."
Appearing in court in Waukesha on Thursday, Rataczak waived his preliminary hearing. His attorney has declined to comment.
Rissler said he was familiar with the Rataczak case, calling it a "pretty bad situation."
He said Rataczak managed VIA Source Communications Inc., a company that distributed DirecTV products.
Threats alleged
According to the complaint:
After being hired to manage VIA's office in Clintonville in Waupaca County, William Parduhn noticed that about 80% of the dish receivers in the stock room were missing access cards.
Parduhn, 21, told authorities that the outgoing manager told him that Rataczak demanded the cards so he could sell them. The manager told Parduhn that he did what Rataczak wanted to "keep his job."
When Parduhn asked about it, Rataczak told him he had better keep his "(expletive) mouth shut" and threatened to have both Parduhn and his wife killed if they told anyone, the complaint says.
For months, Rataczak called Parduhn, demanding he steal more cards and express mail them to Rataczak in Waukesha.
After the "Black Sunday" card destruction, Rataczak called Parduhn, saying he was "in a world of hurt because he was going to pay out over $25,000 if he didn't get more cards to those people," says the criminal complaint.
He said he needed 200 cards "to get himself out of his jam."
Authorities learned of the thefts last May when another employee found about 220 receivers with no cards and saw Parduhn removing about 50 cards from other inventory, said Clintonville Police Chief Terry Lorge.
Parduhn was not charged in the case.
Appeared in the Milwaukee Journal Sentinel on April 13, 2002.
Waukesha man charged in theft, sale of access
By LISA SINK
of the Journal Sentinel staff
Last Updated: April 12, 2002
Waukesha - Freeloaders, beware: The growing number of people pirating satellite TV channels are being targeted for civil and criminal prosecution.
DirecTV executives issued the warning in response to charges filed against a Waukesha man accused of stealing and selling hundreds of doctored access cards that allow buyers to get dozens of free channels.
Neil Rataczak - who was the state manager of a company that distributed DirecTV products - stole cards from the company and threatened to fire or kill an employee unless he helped him, a criminal complaint alleges.
Rataczak, 32, of Waukesha, warned the employee that if he turned Rataczak in, the man and his wife would both "end up in a hole somewhere," says the complaint, filed in Waukesha County Circuit Court.
Authorities said they couldn't estimate how much money Rataczak netted, but employees told them he sold hundreds of cards for $300 to $500 each.
If Rataczak is convicted of felony theft and the other charges filed against him, he could be imprisoned for up to five years.
Industry officials say the case demonstrates the growing problem of consumers' stealing access to hundreds of extra television channels.
"It's a serious problem," said Larry Rissler, vice president of DirecTV's Office of Signal Integrity.
Rissler would not estimate the annual economic loss from piracy, saying it would "rattle Wall Street."
DirecTV is the nation's leading satellite provider with 10.7 million customers.
Last year, DirecTV filed 159 lawsuits against suspected pirates and hackers and cooperated with law enforcement in nearly 100 criminal cases, Rissler said.
Some traffickers of hacked systems have been sentenced to prison, he said.
Customers obtain DirecTV channels with a satellite dish, set-top receiver and access card. The card - about the size of a credit card - has embedded microchips with codes that allow for reception of only the channels for which the consumer pays.
But Rataczak and others across the country have been charged with reprogramming the cards so users can obtain about 200 channels for free.
For the paying customers, DirecTV costs $73 a month to get the entire package of channels, including about 30 premium movie channels. A more basic package with 130 channels and no premium movies costs about $32 a month. The dish and installation run just under $50, Rissler said.
DirecTV delivered a major blow to hackers days before the 2001 Super Bowl.
The company sent an electronic code through its satellites to the access cards to disable all unauthorized ones, Rissler said.
Hackers refer to it as "Black Sunday."
Rissler said that the company now repeats this scrambling process about once a week. But hackers are getting around the move by getting new cards or reprogramming existing cards, according to hacker Web sites.
One site said, "Reprogramming your card once every four to 10 days is not uncommon anymore."
Appearing in court in Waukesha on Thursday, Rataczak waived his preliminary hearing. His attorney has declined to comment.
Rissler said he was familiar with the Rataczak case, calling it a "pretty bad situation."
He said Rataczak managed VIA Source Communications Inc., a company that distributed DirecTV products.
Threats alleged
According to the complaint:
After being hired to manage VIA's office in Clintonville in Waupaca County, William Parduhn noticed that about 80% of the dish receivers in the stock room were missing access cards.
Parduhn, 21, told authorities that the outgoing manager told him that Rataczak demanded the cards so he could sell them. The manager told Parduhn that he did what Rataczak wanted to "keep his job."
When Parduhn asked about it, Rataczak told him he had better keep his "(expletive) mouth shut" and threatened to have both Parduhn and his wife killed if they told anyone, the complaint says.
For months, Rataczak called Parduhn, demanding he steal more cards and express mail them to Rataczak in Waukesha.
After the "Black Sunday" card destruction, Rataczak called Parduhn, saying he was "in a world of hurt because he was going to pay out over $25,000 if he didn't get more cards to those people," says the criminal complaint.
He said he needed 200 cards "to get himself out of his jam."
Authorities learned of the thefts last May when another employee found about 220 receivers with no cards and saw Parduhn removing about 50 cards from other inventory, said Clintonville Police Chief Terry Lorge.
Parduhn was not charged in the case.
Appeared in the Milwaukee Journal Sentinel on April 13, 2002.