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From the News and Courier 1-22-04

5 S.C. men face jury trial in DirecTV theft case

Defendants allegedly used 'smart cards' to steal satellite signal

BY TERRY JOYCE
Of The Post and Courier Staff
Five South Carolina men are among the first in the nation to face jury trials for allegedly using "smart cards" to steal DirecTV's satellite signal.

Each defendant could be forced to pay more than $10,000 for every time he illegally used one of the cards to watch a movie on DirecTV. The nation's largest satellite television provider has sued more than 18,000 people nationwide, including about 300 in South Carolina, and the first trials are getting under way this week in federal courts in Charleston and in California.

"Smart cards" can be inserted into the DirecTV electronic equipment that subscribers must hook to their television sets to unscramble TV signals beaming down from satellites. The cards make it possible to watch any programming carried by DirecTV, including pay-per-view movies and premium services.

A number of manufacturers and vendors of the illegal card devices already have been prosecuted or sued in other parts of the country. The local and California cases, however, are the first civil jury trials targeting people who allegedly purchased and used the cards, defense attorney Elizabeth Stuckey Murphy said.

DirecTV "identified the people who bought the devices in the business records we acquired in civil raids on the vendors," the firm's public relations director, Robert Mercer, said in a phone interview earlier this week from El Segundo, Calif.

"We've targeted the code writers, the supply side," Mercer said. "Now we're attacking the demand side."

The use of illegal devices or cards to acquire TV signals without paying for them is a federal offense, but no criminal charges were filed in the local case. Mercer said DirecTV has won judgments in judge-only trials in Virginia and elsewhere and has settled out of court with companies that allegedly manufactured the cards.

Two companies, White Viper Technologies of California and Vector Technologies of Kentucky, paid DirecTV more than $1.1 million in settlements, he said.

On Wednesday, all five defendants testified in federal court in Charleston that they are innocent.

Lewis P. Frye of Barnwell and three others said they purchased the devices for someone else, and in three cases, the individuals who allegedly received the devices have since died.

"My uncle asked me to order two pieces of equipment, and I gave them to him with the box unopened," Frye said. "My uncle didn't have a computer, which is why he asked me to buy the devices."

The uncle died in 2002.

Another defendant, Eddie Dixon of Ridgeville, said he ordered devices for a friend who later died. He said he never asked the friend what he would do with the cards.

Joseph C. Brunson Jr. of Walterboro said he didn't know what he ordered when he purchased a device on a Web site for a friend. The friend died in a mo-ped accident, Brunson said.

Leroy Cromedy Jr. of Huger testified he doesn't know how to use the Internet, much less order something over it. But he said his son subscribed to DirecTV and later canceled the subscription.

Brandon Moore of Greenwood said he ordered a device for a man he rode motorcycles with and knew only as Mark.

"I didn't have any idea what it was for," he said. Moore also said he had purchased a DirecTV satellite dish and equipment but never used it.

An expert witness, John B. Loggins of Seneca, testified he had seen a satellite dish at Moore's home that was DirecTV equipment. He said he could not verify if Moore was a DirecTV customer.

The trial resumes today.

More to come....
Mark

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Part two....


Jurors find for DirecTV

3 men face fines in groundbreaking civil court verdict

BY TERRY JOYCE
Of The Post and Courier Staff
In the first verdict of its kind in the nation, three South Carolina men face hefty fines after a federal jury in Charleston ruled that they used illegal devices to steal DirecTV's satellite signal.

The jury decided Thursday in civil court that Lewis P. Freye of Barnwell and Joseph C. Brunson Jr. of Walterboro had twice violated federal laws prohibiting the illegal interception of satellite signals or the assistance of others in intercepting the signals. They face penalties of up to $10,000 apiece for each violation plus punitive damages, said their attorney, Christopher Murphy.

A third defendant, Eddie D. Dixon of Ridgeville, was found liable for the same federal violation.

The jury also decided that Dixon distributed the illegal devices, a violation that carries a maximum fine of $100,000 plus damages, Murphy said.

U.S. District Judge David Norton plans to hold a hearing in the next few weeks before announcing the penalties.

The jury's verdict was hailed by DirecTV's lead lawyer in the case, who said it should send a stern message to anyone thinking of stealing satellite signals.

"I think the word will get out," said Andrew Metalka of Galveston, Texas. "If you pirate our TV signals, you could be held liable for it. And the same word also will go out to the pirate community."

DirecTV has been busy the past two years with lawsuits against firms that manufacture and sell devices that let owners use DirecTV's signals without paying for them. Trials this week in Charleston and California were the first in the nation in which a jury was asked whether anyone who buys the devices or gives them to someone else had broken federal laws.

The trial began Tuesday and involved civil action only. None of the defendants faced criminal charges.

Earlier Thursday, Norton dismissed similar suits against Leroy Cromedy of Huger and Brandon Moore of Greenwood. He said the evidence against the two men wasn't strong enough.

No one testified that they saw anyone steal the signals, and all three men who face penalties said they purchased the devices for someone else.Four devices were displayed in court, including one known as a "smart card" because it unscrambles the DirecTV signal when it's inserted into a receiver that's hooked to a television set.

Metalka argued that possession of the items was enough to infer guilt "because there's no other use for the devices. They cost hundreds of dollars."

Murphy, though, insisted that "this is all about money. There's no evidence of theft. There's no evidence that they stole the signals."

The jury deliberated less than two hours. After the trial, juror David Churchill of Summerville said he thought "the defense did a good job but didn't have much to work with. This was a jury made up of people of modest means. They weren't swayed by the fact that a corporation was involved."

Murphy said he and other lawyers will examine these cases as they face another trial next month. Roughly 300 people in South Carolina have been accused of similar violations, and 12 of them are coming to trial Feb. 9, he said.

Well, this sucks....
Mark