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From today's Globe and Mail

Prolific satellite pirate jailed 7 years

By PAUL WALDIE

UPDATED AT 11:03 AM EST Wednesday, Dec 8, 2004

To people in London, Ont., Martin Mullen must have seemed like a quiet businessman who ran a successful computer company from his home. But to police in Florida and satellite television giant DirecTV Group Inc., Mr. Mullen ran one of the largest and most sophisticated pirate satellite TV operations they have ever seen.

Mr. Mullen, 50, specialized in making bogus "smart cards," computer cards that satellite TV companies provide customers to unscramble signals.

According to court records, his operation was so intricate that he had more than 100 distributors across North America and even held training seminars for recruits that included an instructional video. DirecTV, which has about 11 million subscribers in the United States, estimated that Mr. Mullen cost the company more than $200-million (U.S.).

Mr. Mullen was arrested last June in Tampa, where some of his U.S. operations were based. He pleaded guilty to fraud and immigration charges and, on Monday, he was sentenced to seven years in prison. He was also ordered to pay $24-million in restitution.

"Our code name for this case was Operation Kingpin," said Richard Stone, a Los Angeles-based lawyer for DirecTV and NDS Americas Inc., which makes the smart cards. "There actually aren't that many cases like this out there. This is one of the more significant prosecutions."

Mr. Mullen has a long history in satellite television piracy. DirecTV first went after him in 1996 and won a $5-million judgment. He also faces a lawsuit in Ontario.

His latest scam began some time around 1998, when he set up a company called Multi-Media Images in his London home. The business offered a variety of services including video production and Internet-security programs. "Drawing from over 25 years of experience in the multi-media and video production fields, Marty has a true understanding of the industry," the company's website said.

But according to court documents, Mr. Mullen was also breaking into the computer codes on satellite TV smart cards and cloning thousands of duplicates. His copies were so good they eluded electronic countermeasures that satellite companies use to catch fake cards.

Mr. Mullen's operation grew quickly and he was soon supplying thousands of cards across the United States and Canada. In one three-month period alone, Mr. Mullen distributed 16,000 cards in the United States, court records show.

He also developed an extensive network of distributors and card makers including at least one industry insider. Mr. Mullen gave each new distributor two days of training, a laptop computer with encryption software for making cards and 10 fake cards to get started (all in return for $37,500). He also provided them with full technical support and an instructional video, called Cyber-1 MIP Tutorial Video. And, he set up a secure website to keep his network up to date on the latest techniques.

But DirecTV and NDS had been keeping their eyes on Mr. Mullen. In 2001, NDS hired a private investigator to infiltrate his operation. The agent "created a persona and befriended Mr. Mullen," Mr. Stone said. "Marty opened up and showed him the whole operation."

Mr. Mullen was arrested at the Tampa airport last June on an immigration charge (he had been deported from the United States in 1987 on an unrelated charge and re-entered under a false name). Charges of fraud and satellite TV piracy were laid as well and Mr. Mullen pleaded guilty two months later.

Mr. Mullen is the second major satellite TV piracy case in the past year. In 2003, a Florida court sentenced Steven Frazier to five years in jail `for h@cking into smart cards. He was also ordered to pay $180-million in restitution.

Mr. Frazier, 29, had become something of a hero among h@ckers and even offered to provide free card-h@cking tips on the Internet. Prosecutors said he ran a massive international operation, but Mr. Stone said the Frazier case paled in comparison to Mr. Mullen's.

Mr. Frazier "would be at the level of one of Mullen's sub dealers," he said. "He was a big-time guy."