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Trade Secret/Economic Espionage Cases - U.S. v. Serebryany (C.D. Cal.)

Department of Justice


Trade Secret/Economic Espionage Cases

September 8, 2003

United States Department of Justice
United States Attorney
Central District of California
Thom Mrozek, Public Affairs Officer
(213) 894-6947
Contact: James W. Spertus
Assistant United States Attorney
(213) 894-5872

L.A. Man Sentenced for Stealing Trade Secrets Pertaining to ‘Smart Card’ Technology

Concluding the first federal criminal case in Los Angeles involving the theft of trade secrets, a University of Chicago student was sentenced this morning for stealing sensitive trade secret information regarding DirecTV’s Period 4 conditional access card.

Igor Serebryany, a 19-year-old student whose home is in the Los Feliz area of Los Angeles, was sentenced to five years of probation, a term that will include six months of home detention. Additionally, United States District Judge Lourdes G. Baird ordered Serebryany to pay $146,085 in restitution to DirecTV and to the law firm where he stole the information.

Serebryany stole the secret information while he was working for a copying service that had been hired by DirecTV’s legal counsel, Jones Day Reavis & Pogue in Los Angeles. The stolen trade secret information pertained to DirecTV’s Period 4 access card. DirecTV had provided the secret information to Jones Day in connection with civil litigation between DirecTV and one of its security vendors, NDS Americas, Inc.

DirecTV delivers digital entertainment and television programming to millions of homes and businesses throughout the United States. A consumer wishing to subscribe to DirecTV programming must first obtain necessary hardware items, including a conditional access card, to receive the satellite signals. The access card is a key component in the security and integrity system for DirecTV satellite programming.

DirecTV invested more than $25 million to develop the Period 4 access card with the assistance of its security venders. The three previous generations of DirecTV access cards have all been compromised by hackers who have developed ways to circumvent DirecTV’s conditional access technologies.

Jones Day was outside counsel for DirecTV and represented DirecTV in civil litigation that was commenced in September 2002 by DirecTV against NDS. In preparation for this litigation, DirecTV and Jones Day had been actively reviewing documents pertaining to the development of the Period 4 card, and in August 2002 DirecTV delivered the trade secrets to Jones Day. Some of the trade secret information was so secret and valuable to DirecTV that DirecTV had previously maintained the information only in encrypted format on computer hard drives secured at DirecTV facilities.

On April 28, 2003. Serebryany pleaded guilty to the charge in federal court in Los Angeles.

The case was investigated by the Cyber-crime Division of the Federal Bureau of Investigation in Los Angeles. CONTACT: Assistant United States Attorney James W. Spertus

(213) 894-5872 Release No. 03-120


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