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 716.874.2088. Free catalog. 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