
SCRAMBLING NEWS: DSS FIX RELEASED - PART 1

This article is Copyright 1995 by David Lawson and
Scrambling News. Both parts may be reprinted and
distributed freely as long as they are not modified in
any way.

The Canadian group has released their fix for the DSS
system. Their chief engineer is said to be Dectec's
former head engineer. The fix will be marketed from
Canada and Mexico, and through the underground
in the U.S.

The fix is a paddleboard which fits into the cardslot.
It uses two microprocessors including a Dallas 5002
and an Atmel with Fastram. There is also a 256k ram
chip with a lithium battery backup. In order to receive
Pay-Per-View programming an EEPROM in the
receiver must be reprogrammed with a new ID.
According to informed sources, the first-run
paddleboards suffer from a 30% failure rate. In addition,
they are extremely sensitive to static electricity. If
zapped, they cannot be reprogrammed.

The developers are grabbing every penny they can on
this fix. The wholesale cost to dealers purchasing in
quantities is $400 each so retail will likely be $600-$700.
This is the cost of one year's programming and it is longer
than the fix is going to last. Opening the DSS receiver will
also void any warranty.

There is another, more elegant smartcard fix which has
been developed by another group. It is not yet on the
market. Someone placed an anonymized ad in
rec.video.satellite.dbs recently that they have
hundreds of pirate smartcards for sale. It is possible
that someone obtained a supply of blank cards and
programmed them but it is unlikely they would be
sold openly through the internet.Thousands could
very easily be sold quietly through the satellite
underground without fanfare.

Subscribers to our newsletter ($29.95 for 12 issues)
will receive more information by mail next week.
(12/4/95). It will include important information on
the new Cyber 1 fix for the VCII PLUS. One of the
individuals now distributing the paddleboard fix is
one of the individuals who was charged and convicted
in the U.S. Customs sting of 1993. That sting involved
a fix for the Videocipher II PLUS satellite system.
We have included the article we did on that sting.
It may be of interest to some of you, and it will provide
you with an account of how the satellite piracy
business works.Our article was prepared from court
documents and interviews with the participants. All
those charged were convicted.

The sting started in the spring of 1993 and culminated
at the SBCA trade show for satellite dealers on Septem
ber 7, 1993 in New Orleans. Here is what happened:

With impeccable timing, the U.S.Customs Service
executed a sting on several of the largest suppliers of
satellite television modifications in the country. Most
dealers got their first news of it through a message by Ron
Mac Donald, on his Canadian BBS. The message quickly
spread across North America, with many individuals
changing the name on the header to their own. Here is
the text:

Msg#:19752 *News*
09-08-93 22:30:23 (Read 40 Times)
From: RON MACDONALD
To: ALL
Subj: FBI & GI STING

Well it seems that the FBI and the U.S. Customs
department in conjunction with GI have pulled
off a MAJOR sting operation in New Orleans
yesterday. By now everybody has heard of the
so-called VCII Plus clone fix that has been shown
around in the states.

The story starts 6 months ago and I will try to set
out the players in order of appearance.Everybody
has asked for a VCII plus fix - when will it be released?
A new member on this BBS using the name Gerald
?XXXX kept bugging me about a rumour he was
hearing and trying to chase down. I kept saying it
is too hard and too expensive to develop. But lo and
behold, 2 weeks ago, he called me and said he found
the guys with the VCII PLUS clone fix and he was now
representing them and was marketing it for the
developers. The developers wanted to keep their
names out of the picture completely.

We were told that Gerald's associate "Richard
Collins" would be in touch with us to do a demostration
of the product. Arrangements were made for "Richard"
to meet us in Canada just across from the border of
Buffalo. But at the last minute Richard called and said
he wouldn't cross the border with the VCII units and we
have to go to the states for the demo. We complied and went to
see the device. Sure enough, he had a MASTER unit and three
clones of that ID number.

All three were tested seemed to be identical. The three
cloned units had a soft epoxy on them and we were told
that the parts under the epoxy could be bought at Radio
Shack for the simple mods.

One of the cloned units was picked at random, put on line
and called in for a subscription to be added to the unit.
The hit came down within minutes and on came the new
subscribed channel. This verified the existence of a cloned
unit.

Richard informed us that the price of the technolgy was
$50,000.00. They wanted 20 people to put up $50,000.00
each to pay off the developers a total of $1,000,000.00. This
fix was to be guaranteed for a year.

A meeting was going to be held in New Orleans on Sept 7
1993 for a demo of the so-called keypuller/reader/writer device.
At this meeting we would be taught the full operation of the
process and then pay for it and leave with the product. We
stalled off on answering their questions about when we
would arrive in New Orleans.

Something was fishy! Richard was using the same sales
pitch on too many people in the inustry! Feedback was
coming in from all over the country! Even from people that
I knew, who could not afford the $50,000.00 price tag -
why were they attending this so-called hush-hush
meeting. Were they playing around with the price tag?

Better off to sit back and let it shake itself out.

Did you ever see that Eyewitness Video episode on
how a police department setup a phoney front that
bought any hot stuff from crooks. After 3 or 4 months
in operation they had a party for all of these "customers"
of theirs and then the FBI raided them and hauled them
off to jail.

Well I couldn't get that episode out of my mind! I keep
thinking - what a major catch for the FBI and GI.A perfect
STING operation - 20 or more of the top chippers in the
industry, all in one spot at one time! And that is exactly
what GI and the FBI and U.S. Customs did!

Now the others players who were involed in setting
up the sting:Richard Collins - possible alias: Ted La
Fever - U.S Customs agent Gerald XXXXX - New
Orleans - hosted the demo ! Dana XXXXXXX -
Corning N.Y. - was he busted or was he also selling
the fix. aka: Jason Bates

Busted:
          Tony- Magna Systems
          Jeff C.- Tennennese
          Jeff P. - Tennennese
          Scottie- S&S Satellite
          Kenneth- New York
          Theo- Nassau
          Robert- Kentucky

According to official sources here is what really happened.
This information was obtained exclusively by Scrambling
News. Two individuals were arrested in New Orleans
on September 7, 1993. They were Jeffery Carr of TN,
referred to in Criminal Complaint number 93-223 MAG
in the U.S. District Court in the Eastern District of
Louisiana, and Douglas Stewart, a Canadian, with a
residence in Santa Clara, CA, and referred to in
Criminal Complaint 93-221 MAG. Both cases resulted
from the work done by an undercover officer employed
as a Special Agent of the U.S. Customs Service.

In the case of Douglas Stewart: On August 3, 1992 a
counterfeit Videocipher II descrambler module, a
device used primarily for the unlawful interception of
encrypted satellite cable programming was ordered
from Troy Stewart. The module arrived but had to
be returned due to defects. On August 28 a
replacement module arrived. The module is commonly
known as a Sunboard (a counterfeit Videocipher II module).
The module successfully descrambled encrypted
programming on satellite G5, without paying for the
services. General Instrument Corporation analyzed the
module and found that it successfully descrambled services
without paying for them.

On or about October 7, 1992 Troy Stewart telephonically
introduced the undercover officer to his father Douglas
Stewart. Then on October 29 the agent contacted Douglas
Stewart and told him that he was interested in purchasing
Sun board descramblers. During that undercover contact
the officer told Stewart that they must be careful about the
 authorities and he asked Stewart how he gets descramblers
 into the United States. Stewart told the officer that although
it was risky he just drove them past U.S. Customs Inspectors.

On December 1, 1992 the officer telephoned Douglas Stewart
at his home in California. During that conversation Stewart
agreed to sell to the officer, two modified Videocipher II
descrambler modules for $400 each. Stewart instructed the
officer to send the money to a California residence.

The officer phoned Douglas Stewart on December 15
concerning the purchase made on December 1. He told
Stewart that $800 had been sent via the U.S. Mail. Stewart
said that he did not accept U.S. Mail because it was mail
fraud. He instructed the officer to have the package containing
the funds returned by the U.S. Post Office and requested that
the money be sent to an address in Canada.

On or about January 8 the two modified Videocipher II
descrambler modules ordered from Douglas Stewart were
received. The package had been sent directly from Canada to
the officer's undercover address and contained an insufficient or
false description of the contents of the package for proper
declaration to U.S. Customs.

Between January 8, and February 17, 1993 the officer negotiated
from New Orleans with Douglas Stewart for the purchase of 40
additional modified Videocipher modules for a total price of $14,000.
Stewart agreed to meet the officer in Blaine WA for the transaction.

On or about February 17, the officer called Douglas Stewart in
Canada. Stewart said he was still working on the modules but
would meet the officer on February 18, in Blaine. At the February
18 meeting the officer and Stewart discussed how necessary it
was to be leery of the F.B.I. Stewart said he had just come from
the airport and that he was on the lookout for someone who fit his
profile of an F.B.I. agent. He also said that when agents recently
raided his son's home in California that they had seized 1500
GP-28 adapters, just like the ones that had been installed on the
boards which had been ordered on December 1. Stewart said
that the descramblers were at a private mailbox and that he
shipped Sun Boards from there on a regular basis.

The officer, accompanied by a female U.S. Customs officer
followed Stewart and his business partner Alan Reimer to the
private mail box company, located in Blaine WA where
Stewart and Reimer loaded the 40 modified descrambler
modules into the agents' rental car. They commented that the
trunk of the agents' car was larger than that of the rental car
they had used to transport the modules.When the officer
presented Douglas Stewart with the $14,000 cheque, he
expressed concern that the bank would generate an IRS
form because the transaction was over $10,000.

In a subsequent phone call the officer adked Alan Reimer
about the method of importation of the modules purchased
on February 18. He asked how the Customs Inspector did
not notice the boxes in the rear of the mini van that he and
Stewart were driving that day. Reimer said that they had
used another vehicle with a trunk and had been able to
drive past U.S. Customs. In later conversations between
the officer and Douglas Stewart, Stewart repeatedly
expressed concern over being caught by U.S. authorities
for being involved in the purchase/sale of modified
Videociphers or equipment designed to aid in the
modification of Videociphers and that the purchase or
sale of this type of merchandise could result in a jail
sentence.

On September 7, 1993 the officer again met with
Douglas Stewart in New Orleans and during that
conversation Stewart admitted that he committed
the act of smuggling satellite descrambling devices
on or about February 18 and numerous other acts as
well. At that time he was arrested by assisting U.S.
Customs agents and the undercover officer revealed
his true identity. Douglas Stewart was charged under
Title 47 United States Code, 605 (e) (4) for unlawfully
distributing devices designed primarily for use in the
unauthorized interception of satellite cable programming.

In the case of Jeffrey Carr: The undercover officer had
made contact with Dana LaFever of Corning, NY. LaFever
had told him that he could sell or install VMS devices
which enable satellite customers to download cable
security codes via a computer modem and telephone
line so that they can receive encrypted satrellite cable
programming without authorization. LaFever quoted a
price of $115 each.

On or about June 2, the officer again contacted LaFever.
LaFever said that either he or Bill Hunter, a Canadian who
is in the satellite piracy business would sell a host
program for $750 which would allow the officer to
automatically provide his customers with the codes
for the encrypted channels.

In a phone conversation on or about June 9, LaFever
said that his tec support program, which will enable
customers to receive the code updates would go on
line that night. LaFever told the officer that there was a
legitimate use for the VMS device but then added that it
was necessary to have a gimmick. It was necessary to
be able to claim that the device has some legitimate
purpose. At that time the officer ordered a host program,
one remote program for $900 and ten VC 018 modules
with ten VMS devices installed by LaFever for $1950.

On June 17, the officer placed another order for another
host program, remote program and a security device.
LaFever stated at that time that he tries to conduct his
business without paper work.

On July 15, during the S.B.C.A. show the officer met
Dana LaFever at the Fiddler Inn in Nashville. for the
purpose of purchasing more VMS devices. He was
introduced to Jeffrey Carr who works for Video Marketing
Services which manufactures the devices. After Carr left,
LaFever told the officer that Carr does all the programming
and that he had just paid Carr's partner over $30,000 in cash.
LaFever had a sealed box in the room which he said contained
100 VMS devices. The officer purchased 15 of them with
modems for $95 each.

The officer next met with Dana LaFever on August 30, at his
residence in Corning NY in order to purchase more illegal
satellite cable programming descrambling devices and to
demonstrate the latest illegal device, modified Videocipher
II PLUS modules. The officer told LAFever that the devices
were clearly illegal and LaFever acknowledged that he knew
they were. LaFever tested the modules and and had at least
three telephone conversations with Jeffrey Carr. LaFever
initiated the first phone call and Carr returned at least one call
to LaFever. After one of the conversations the officer was
requested to connect two of the descramblers to the same
satellite cable receiving system in order to determine if the
descramblers would receive authorization simultaneously if
only one of the unit addresses was was provided to a legitimate
programmer. LaFever said that if both descramblers allowed
the viewing of scrambled services simultaneously based on a
single unit address then it truly was a clone fix. The officer told
LaFever that an illegal seed key pulling device was in existence
in New Orleans. the officer also said that if LaFever wished to
purchase the device he would have to travel to New Orleans for
a complete demonstration and that the device was for sale for
$50,000.

THE END - PART 1 OF 2 PARTS

Scrambling News, 3494 Delaware Ave., #123, Buffalo, NY,
14217-1230. Newsletter. $29.95/12 issues. Voice/FAX
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