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FBI arrests 17 in probe into 'top tier' of satellite piracy
By David Lieberman, USA TODAY

A yearlong FBI undercover investigation snagged 17 satellite hackers nationwide responsible for millions in lost business for DirecTV and EchoStar, the Justice Department said Tuesday.

"We have infiltrated the hacking community in the top tier of sophistication," says Assistant U.S. Attorney James Spertus in Los Angeles. "We've targeted people writing the software. Hackers who used to think they are safe no longer are."

Pirates are estimated to cost DirecTV, EchoStar and their programmers more than $3 billion in lost revenue a year.

The enforcement effort, based in California and called Operation Decrypt, enabled the FBI to track conversations in private chat rooms where dedicated pirates often buy hardware and software ? particularly the smart cards and codes that instruct set-top decoders to descramble satellite signals.

Relatively few programmers know how to write the codes that clear the way for buyers to receive all channels, including pay-per-view movies, sports and events. And they often must keep rewriting the codes to counteract signals that DirecTV and EchoStar send to corrupt the pirates' cards.

Among the people arrested was Randyl Walter, a West Los Angeles resident who pleaded guilty to making hacking equipment that resulted in nearly $15 million in losses to DirecTV and EchoStar. Agents found more than 6,000 devices in his home.

In addition, Joseph Bolosky pleaded guilty to making hacking hardware that resulted in more than $245,000 in satellite losses. And Thomas Emerick pleaded guilty to distributing hardware. Other defendants live in Texas, Florida, North Carolina, Kentucky, Indiana, and Ohio.

"It's an extremely significant case," says Larry Rissler, who runs DirecTV's Office of Signal Integrity. The key software writers "are usually insulated" because they deal with just a few dealers.

Spertus says that "getting into those circles was very difficult" and was done after agents persuaded a few key people to cooperate. "The software is really a collaboration. And if we can stop that, we'll put a dent into hacking."