U.S.

Feds Sting Satellite Pirates

By CBSNews.com staff CBSNews.com staff

August 8, 2000 / 5:00 PM EDT / CBS

The federal government announced Tuesday that is cracking down on a flourishing black market that has allowed people to steal satellite TV signals, CBS News Correspondent Stephanie Lambidakis reports.

Twenty-two people have been charged and four others have pled guilty to trafficking in "smart cards," the thin plastic cards issued by satellite TV businesses to access their programming.

Two years ago, the U.S. Customs Service discovered large quantities of either pirated or counterfeit access cards coming across the border from Canada.

They also found people selling the cards on the Internet for $325 to $425. While that seems like a high price, some satellite TV bills can run over $100 per month.

So customs launched a sting dubbed "Operation Smartcard.net." They created their own Web site offering the cards for sale.

Hundreds of people bought the cards despite the warning that "unauthorized use of access cards is illegal in the United States."

In all, agents sold 3,195 illegal cards to dealers and 382 cards to individuals.

Those who were charged were buying in bulk to resell to others.

DirectTV, which says it spent more than $1 billion to develop its satellite TV system, claims it lost more than $6 million annually to pirated cards.

The charges carry a maximum penalty of five years in prison and a $500,000 fine.

The suspects come from more than a dozen states, including California, Washington, Florida, Arizona, New York, Indiana, Michigan, Texas, and Vermont.