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Digital Millennium Copyright Act Cases (DMCA) - U.S. v. Rivera (D.N.J.) (Satellite TV Cards)

U.S. Department of Justice
District of New Jersey
United States Attorney
Robert J. Cleary

970 Broad Street
Seventh Floor

Newark, NJ 07102
PAO 973-645-3657

 

 Bergenfield Man Admits Selling Pirated Satellite TV Access Cards

April 3, 2001


NEWARK – A Bergenfield man today admitted selling 57 pirated DirecTV satellite access cards to family, friends and acquaintances, U.S. Attorney Robert J. Cleary announced.

Javier ("Rick") Rivera, 40, pleaded guilty to a one-count Information, charging him with distributing unauthorized satellite television access devices, according to Assistant U.S. Attorney Scott S. Christie.

Rivera told U.S. District Judge Alfred J. Lechner, Jr. that during the period between February 1999 and June 1999 he purchased the pirated cards from a company named TSS for a price of between $100 and $250 per card, spending a total of $6,250. He then sold the cards for approximately $400 each.

Rivera’s guilty plea is the latest conviction resulting from a 22-month nationwide investigation by the U.S. Customs Service of individuals who schemed to steal satellite television, said Cleary.

Today was Rivera’s first appearance in court in connection with the case. He is free on $10,000 bail until sentencing, which Judge Lechner scheduled for July 17 at 9 a.m.

Rivera faces a maximum prison sentence of five years and a $500,000 fine. He could be ordered to pay restitution and costs of prosecution.

The investigation, known as Operation Smartcard.net, attempted to identify individuals who bought counterfeit satellite television access cards on the Internet in large quantities for resale and profit. The cards allowed users to obtain satellite television programming at no monthly cost, resulting in an estimated loss of $6.2 million a year to the satellite TV industry.

In addition to Rivera, the following individuals have pleaded guilty in connection with Operation Smartcard.net: Michael Poulsen of Mountain View, CA; Mohammad Walid of Yorktown Heights, NY; Linda Bauer of Hastings, MN; and Brian Angell of Warwick, RI. Furthermore, felony charges have been filed against the following individuals, Dale Luster of Dallas, TX; Kevin Greehey of Sarasota, FL, Tony Zielenski of Dallas, TX; Larry Thompson of Shingle Springs, CA; Richard McCarty of Benzonia, MI; and Ray Frost of Syracuse, IN.

The government alleges that these individuals profited at the expense of satellite TV company DirecTV, which provides specialized programming to customers for a periodic, flat fee. When a customer signs a contract with DirecTV, a small plastic access card comes with the receiver that the customer inserts into a box on a television to activate the service and receive satellite programming. The customer activates the card with DirecTV via the telephone and satellite, and the programming he or she receives is based on the price paid per month.

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. The use of the cards has resulted in millions of dollars of loss to industry in uncollected subscription fees.

The investigation began in Blaine, Wash., in September 1998 as a result of the dramatic increase in seizures by the U.S. Customs Service of pirated or counterfeit satellite access cards being smuggled into the U.S. from Canada. As part of the operation, undercover agents sold counterfeit access cards, called "Eurocards," through an Internet "business" created by Customs agents called TSS. The TSS website warned that "unauthorized use of access cards is illegal in the U.S."

Undercover agents sold the access cards with the cooperation of DirecTV and NDS Americas, a supplier of "smart card" technology that contracted with DirecTV to provide access cards that unscramble the DirecTV signal.

By the time the Customs Service terminated the undercover portion of the operation in June 1999, agents had sold a total of 3,195 illegal cards to dealers and 382 cards to individuals, generating proceeds of more than $516,000, which has been turned over to the U.S. Treasury. The cost of the individual cards on the black market ranged from about $325 to $425.

On July 2 and 6, 1999, DirecTV used electronic countermeasures to shut down all the pirated cards sold through the government’s website, as well as most other known pirated versions of satellite access cards.

During the week of July 13, 1999, agents from the U.S. Customs Service conducted coordinated operations around the country to execute search warrants and conduct interviews of more than 30 dealers who were targeted in this investigation.

Under U.S. Sentencing Guidelines, Judge Lechner will determine the actual sentence for Rivera based on a formula that takes into account the severity and characteristics of the offenses and the defendant’s criminal histories, if any.

Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

Cleary credited Special Agents of the U.S. Customs Service, under the direction of Special Agent in Charge Joseph R. Webber, in New York.

The Government is represented by Assistant U.S. Attorney Christie of the U.S. Attorney's Fraud and Public Protection Division in Newark.

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