America's Dumbest Criminals

[Justin]

http://www.miami.com/herald/content/news/local/broward/digdocs/101583.htm

Published Friday, July 27, 2001

Five charged in satellite-TV scam
BY WANDA J. DeMARZO
wdemarzo@herald.com

In what authorities say is the latest trend in satellite crimes, five men have been arrested on federal charges of intercepting channel transmissions from DirecTV.

One of the five, Henry Garcia, 28, entered a guilty plea in U. S. Federal Court Thursday on charges of illegally selling altered DirecTV access cards for $50 to $300.

Altered access cards are a sophisticated updated version of the pirated black cable box so popular in the 1990s.

``It's the new cottage industry of South Florida,'' said Assistant U.S. Attorney, Jeffrey Kay. ``There are thousands of the illegal cards being sold.''

Investigators say it works this way: Customers wanting DirecTV service buy a satellite dish and receiver, which comes with a uniquely coded access card, about the size of a credit card.

The customer has the dish and receiver hooked up and then places an order with DirecTV for a particular viewing package. DirecTV then sends a signal from its satellite to the access card.

Hackers have figured out how to reprogram the cards with software and equipment available on the Internet. The access cards are sold for $50 to $300 on the street.


``It's a tremendous industry,'' Kay said.

FBI agents received a tip last fall that a large number of altered access cards were in South Florida and formed an undercover sting called Operation Dirty Dishes. The agents placed ads in Bargain Trader seeking altered cards.

They quickly got a hit.

Agents say Garcia, of Hialeah, and co-defendant Omar Celestrin, 35, of Fort Lauderdale, offered to reprogram 10 cards for $50 each.

``When agents met with the two men they observed a large amount of cards, software and equipment,'' Kay said.

Agents quickly arrested Garcia and discovered $64,000 in cash, computers, software, and equipment -- all of which they confiscated.

Three other men were arrested in separate incidents: Larry Burton, 48, of Boca Raton, Paul D. Elder, 32, of Margate, and Edward Bolano, 33, of Miami.

DirecTV officials said the average loss on one card is about $1,200 a year.

``It is illegal to traffick in these devices, to use or possess them,'' said Larry Rissler, vice president of the Office of Signal Integrity for DirecTV.

``We work with law enforcement agencies and are aggressively going after the people using the devices.''


DirecTV has been around more than seven years. Fed up after hackers started illegally intercepting its signal, DirecTV delivered a special signal to millions of receiver boxes in homes across North America on Jan. 21, the week before Super Bowl XXXV.


The message: Go kill yourself, Rissler said. Any unauthorized access were rendered useless, Rissler said.


Garcia is scheduled for sentencing Sept. 28. He faces a maximum penalty of five years in federal prison and a $500,000 fine.

Always a pleasure to read your pearls, Justin. Anyone trying to move merchandise in the States deserves what he gets. (But, maybe Garza'll be able to persuade the Florida Correctional System to allow him to install dishes, receivers, and hacked cards at their various facilities... Shoot, maybe they'd allow him time on a supervised work-furlough program to install the same at FBI Headquarters and the U.S. Attorney General's Office, too!) :D

[Spelled~Wrong]

When I read the title of this post, I thought it was going to mention somehting about HackHu!!!! :)

Sorry, couldn't resist!

[To The Real King!!]

Shucks folks,

Is it these same access cards that they sent a signal to "go Kill them selves" that DirecTV® finally figured out was costing them a LARGE FORTUNE when people simply bought another Receiver for $50.00 and then threw the RECEIVER OUT in Wal Marts dumpsters, driving BACK to Canada with ONLY the card. I am told that the roads to Canada on the US Side are PAVED with Satellite Receivers that people THREW OUT wanting ONLY the cards.

You know the same receivers that DirecTV® so wisely borrowed on and then paid Wal Mart another $200.00 for selling and RCA another $200.00 for Producing.

These receivers, the ones that end up in the ditch at the side of the road are the same ones that DirecTV® pay out about $400.00 for EVERY single one that is NEVER authorized.

DirecTV® are SO BRILLIANT to pay only $400.00 MORE DOLLARS to various people for units that will NEVER get authorized and for wish they subsidize these pirate cards to the tune of $400.00.

Brilliant Mr. Rizzler, truly BRILLIANT.

By the way it is PERFECTLY LEGAL for Canadians and people from some 50 other countries to ALLOW DirecTV® to finance them for about $400.00 US for their stupid and convoluted and satellite piracy encouraging "piracy" marketing plan that they devised. Boy I will BET that many folks are SO HAPPY that DirecTV® are SO BRILLIANT to use this as part of their marketing :D

What GENIUSES!!!

Ever notice folks that LATELY since some IDIOT pointed this fact out to them, that they now ONLY HASH cards of ALL types. I suspect YOU WOULD TOO if everyone you killed cost YOU a supplementary $400.00 US with NARY a SINGLE HOPE of any subscription revenue EVER.

The Wall street people must consider these folks to be just SO DARN SHREWD:)


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[ttrkmailname]


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[Justin]

TTRK,

Have you seen this one yet.

http://www.thestreet.com/tech/georgemannes/1498069.html

Satellite Pirates Pit EchoStar Against Hughes
By George Mannes
Senior Writer
7/23/01 10:30 AM ET

Arrrrrghhh! Pirates are stealing gold from the satellite industry's treasure chests, and EchoStar Communications (DISH:Nasdaq - news - commentary) is blaming Hughes Electronics (GMH:NYSE - news - commentary) for letting them aboard.

On EchoStar's Thursday earnings conference call, CEO Charlie Ergen said satellite industry growth was being hurt by widespread theft of Hughes' DirecTV service by people who otherwise would be paying subscription fees to EchoStar or DirecTV. Moreover, Ergen faulted Hughes for inadequate technology and business practices that have made DirecTV a relatively easy target.

DirecTV denies that it's to blame. "Charlie seemed to imply we were lax about our signal integrity efforts, and he's wrong about that," says DirecTV spokesman Robert Mercer.

500,000 Thieves

Ergen's comments throw a spotlight on a major risk for the home satellite business, which hopes to win customers from the ranks of cable TV viewers: Yes, people will sign up for satellite TV. But rather than pay their traditional monthly fee to get service, they'll spend money on illegal tools to avoid the full price.

Over years, piracy could cost EchoStar and DirecTV billions of dollars in lost revenues. On the other hand, the companies could improve their results substantially if they were more successful in combating signal-theft. Certainly every lost customer is sorely missed: Both companies' stocks are down about 35% in the last 12 months, and took fresh hits last week following reports of disappointing subscriber growth.

The extent of satellite piracy is hard to pin down, partly because signal thieves tend not to get chatty with market researchers. One company that has tried to quantify signal theft is telecommunications market research firm Carmel Group. In addition to the 17 million-plus legitimate satellite subscribers the firm expects in the U.S. by the end of 2001, Carmel estimates that 500,000 more people will pay nothing at all for the privilege of watching home satellite TV. And that's a conservative estimate reached with the help of industry executives, says Carmel senior analyst Sean Badding.

Multiplying those 500,000 thieves by an annual household revenue estimate of about $685 gets you to about $340 million in lost revenues annually for the industry. That's not chump change. Analysts surveyed by Thomson Financial/First Call are expecting EchoStar to report $3.9 billion in revenue in 2001, while Hughes says DirecTV will report $5.5 billion to $5.6 billion in revenue for the year.

Can't Truss It

Satellite TV is likely to become more of a target as it grows in popularity, says Badding. As a benchmark, he notes that while cable TV is viewed legally in an about 65 million homes, it's pirated in around 13 million more. Thieves thus amount to about 20% of legitimate cable subscribers, compared with about 3% in the satellite business -- plenty of room for growth.

In addition to Ergen's comments, there has been some anecdotal evidence that satellite piracy is on the upswing. (To be able to watch encrypted satellite programming, legitimate subscribers to either EchoStar or DirecTV need an authorized decoder card that's inserted into the set-top satellite receiver.) Earlier this year, RadioShack (RSH:NYSE - news - commentary) said a significant number of people were buying DirecTV systems from the retailer but not activating subscriptions. Non-activations, as Ergen pointed out Thursday, are a sure indicator of piracy, because people not signing up for the service are instead likely buying illegal decoder cards for unscrambling satellite signals. A RadioShack spokeswoman says that RadioShack and Hughes in June revised the two companies' agreement to ensure "higher-quality subscribers" and to mitigate piracy issues.

DirecTV appears to be more of a target for signal hackers than EchoStar does. That's partly because its system is more popular than EchoStar's DISH Network; DirecTV had more than 10 million U.S. subscribers as of June 30, while EchoStar had 6 million. Badding says pirates are also more interested in DirecTV's programming, particularly its exclusive NFL Sunday Ticket football package.

Moving Forward

Is DirecTV's encryption technology also to blame, as Ergen suggests? That's not clear. Badding says EchoStar's system is "just a little harder to crack." DirecTV's Mercer maintains that "both [Ergen's] system and our system are hack-able."

Ergen also faulted DirecTV for setting up sales promotions and arrangements with retailers that didn't require consumers to activate their subscriptions before stores received compensation for sold systems. DirecTV's agreements, said Ergen, gave salespeople insufficient incentive to steer buyers toward legitimate subscriptions.

Earlier this week, DirecTV president Roxanne Austin told analysts that the company's renegotiated agreement with RadioShack was a step in the right direction. "We'll be looking to work with our other large [consumer electronics] retail partners to focus them on activating subscribers, rather than simply selling set-top boxes," said Austin, who added that defeating piracy would lower the company's subscriber acquisition costs and improve its earnings before interest, taxes, depreciation and amortization.

It's a duel to the death between pirates and satellite companies. Sooner or later someone will be walking the plank.

[To The Real King!!]

Hi Justin,

I love it. Thanks for pointing out this excellent news article. If we are realistic, Charlie Ergen is 100% correct in what he says. He faults Hughes for inadequate Technology yet the supposed spokesman from DirecTV® Robert Mercer does NOT address that and typical of DirecTV® he misstates it saying that Charlie stated they are lax with their signal integrity. He did NOT say that but it is obvious to any person of integrity that if you have crummy technology then THAT is being lax with signal integrity.

Everyone recognizes that DTV's crummy technology is hackable by virtually any teenager with a computer as it is so thoroughly hacked that it is available as "FREEWARE" all over the Internet. The Legal-rights organization has LONG reported on how that "lack of adequate technology" has harmed DirecTV® and the entire industry by ENCOURAGING piracy through junk.

It is about the same as if your local bank used your teenagers Bicycle combo lock that costs $1.29 to secure their bank vault and front door. Sure its a lock but is it adequate and is it reasonable to use such a cheap ineffective lock on a bank?

I think not.

Please read the post at

http://www.legal-rights.org/NDSandDTV.html

to see just how true this statement is for ALL NDS cards used in DirecTV®, Galaxy Latin America and the SKY system all of which are trivially hacked by any teen.


Unfortunately even NDS, who are a big industry player, fail to admit that this is poor technology and IS as Mr. Ergen states, causing the industry to sustain substantial losses. They would NOT be up here in Canada suing people if the "lock" was not such a cheap ineffective one.

This statement reminds me of a friend who came over the other day and we accused him of NOT being the BOSS in his household as he had to go home early.

His answer was "Baloney I am the boss in my home and I even have my wifes permission to say so" :)

Yes that's convincing!!!


Luckily Mr. Ergen does not have to worry too much in Canada because it is widely believed that hacking his system here is JUST as illegal as it is in the USA. The reason is simple. A hack of the DISH NETWORK SYSTEM is also a hack CAPABLE of decoding the BELL ExpressVu system and is ILLEGAL here in Canada for that reason. Both the Echo and the BEV keys are known and available from several hacker sites.

For some reason there are THOUSANDS of PEOPLE hacking the BELL System which is NOT WISE in Canada. But it seems that Bells Lawyer, Bill McKenzie, is much more interested in going after people hacking the DirecTV® system than they are at Prosecuting the people STEALING BELLS system.

I suggest there MUST be a reason for this and I think perhaps they do NOT want to make the Producers and suppliers aware of just how bad their ExpressVu system is hacked. Echo on the other hand do frequent ECM's that seem effective in keeping the Dish Network system more secure and troublesome. ExpressVu don't even do EFFECTIVE ECM's and people stealing that seem quite secure that they wont go off.

Now then we have Roxanne DTV's spokesperson patting themselves on the back for institution a new system with Radio Shack that does NOT cost DirecTV® $400.00 PLUS every time NDS loop their HU Cards. A little too little and a little too late!

That was HILARIOUS that a big company was so inefficient as NOT to realize that the $200.00 to Rat Shack or Wal Mart and the $200.00 to RCA that they paid out for so that a pirate could get a card to replace the looped one for only $59.00 , sometimes less. Many of them DUMPED the receiver and DISH into the Wal Mart dumpster keeping only the HU Card. And then DirecTV® paid out over $400.00 for the pirates $50.00 HU Card :)

Now did this make ANY sense to anyone who could THINK. NO. But we knew that and DirecTV® did not.

Apparently NOW they have told NDS to "HASH" the cards and NOT to loop them as it costs DirecTV® too much money.

So I think HASHES and the "hemorrhoid" effect will be the ONLY ECM's of the DirecTV® systems now.I t certainly wont be on Emulators :)

This is just another step in FURTHER REDUCING their effectiveness. As NDS seem to say "ONWARD and DOWNWARD" to a even LESS effective solution :)

Pretty soon this fact will become obvious to the stock brokerage industry and DirecTV® will pay for their flirtation with piracy as part of a marketing plan by their stock LOSING a great deal of its VALUE while the Dish Network and its much more effective handling of the situation goes in the opposite direction. Perhaps because they are more fair to dealers and paying them ongoing revenues on subscriptions. It seems clear to me that dealers need to earn proper ongoing revenues and when they DO they are much less interested in Hacking.

But DirecTV® wont learn that lesson at all. Because without ADEQUATE security it does not matter what else you do. Trivial non-secure security systems tend to be hacked, triviallyhttp://www.legal-rights.org/images/ttrk.gif

No one fully understands why piracy is part of the NDS/DTV marketing plan but it is OBVIOUS to everyone that it is. And as LONG as it is there will be no respite for the wicked.

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Thanks & Good Luck,
[ttrkmailname]


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[Edited by To The Real King!! on July 29th, 2001 at 02:59 PM]