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Digital Millennium Copyright Act Cases (DMCA) - U.S. v. Gray (Randolph) (C.D. Ill.) (Satellite TV Cards; Operation Smartcard.net)

Press Release
For Immediate Release
June 14, 2001

Office of the United States Attorney
Central District of Illinois
600 E. Monroe Street
Room 312
Springfield, IL 62701


Rantoul Men Guilty in Satellite T.V. Sting


Urbana, IL–United States Attorney Frances C. Hulin announced today that two Rantoul men have pleaded guilty in connection with a scheme to illegally obtain satellite television programming. James Gray, 71, and Christopher Randolph, 21, entered pleas of guilty to distribution of illegal satellite decryption devices before United States Magistrate Judge David G. Bernthal in Urbana. Sentencing in both cases is scheduled for November 9, 2001 before United States District Judge Michael P. McCuskey. The cases were prosecuted by First Assistant United States Attorney Richard N. Cox and resulted from a nationwide investigation conducted by the United States Customs Service, in conjunction with the Computer Crimes Section of the Department of Justice.

The investigation, known as "Operation Smartcard.net," was established to identify individuals who bought counterfeit satellite television access cards on the Internet in large quantities for resale and profit. These cards allowed users to obtain satellite television programming at no monthly cost, resulting in an estimated loss of $6.2 million per year to the satellite television industry. The investigation began in the State of Washington in September 1998 as a result of the dramatic increase in seizures of pirated and counterfeit access cards being smuggled into the U.S. from Canada. As part of an undercover operation, agents sold counterfeit access cards, called "Eurocards," through a fictitious Internet business called TSS. The TSS website warned that "unauthorized use of access cards is illegal in the U.S."

In addition to Gray and Randolph, approximately 15 other persons from throughout the United States have been convicted in connection with the investigation. The investigation revealed that all of these individuals profited at the expense of the satellite television company DirecTV, which provides specialized programming to customers for a periodic, flat fee. Modified satellite television access cards illegally give users free access to all satellite television programming, including pay-per-view programming, which represents an additional loss to the movie and professional sports industries. DirecTV cooperated in the undercover operation.

In both of the cases announced today, the defendant purchased and re-sold pirated or counterfeit access cards in the United States. According to court documents, Gray purchased 30 illegal satellite access cards from TSS and traded for an additional 60 such cards. He then re-sold the cards to individuals who owned satellite television systems so that they could decrypt satellite programming from DirecTV without authorization. According to the court documents, Randolph purchased 35 of the cards. Each defendant pleaded guilty to a felony charge punishable by up to five years imprisonment and a $500,000 fine.


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