Pirates Trip Over Web

Author:
Updated:
Original:

Los Angeles -- In the end, it was a cable pirate's
dedication to technical support that led to the raid of two Web-based sellers of doctored
set-top converters.

Cable investigators used the area code listed with the
tech-support number to ferret out the Moreno Valley, Calif., location of Cable Converter
Concepts, which did business on the Web using the name "testchip."

The business drew the attention of investigators from
MediaOne Group Inc. in a simple way: Mike Bates, director of security for the
company's Southern California region, did a browser search on the phrase, "cable
descramblers," and the Moreno Valley business topped the list of several-thousand
sites.

The locations of Web-based businesses are frequently hidden
because of the use of 800 numbers. But this online firm listed a second number for use by
customers to report problems with their purchases.

MediaOne began its investigation about four months ago, and
it quickly received additional information on the site from General Instrument Corp.,
which was also looking into it.

The MSO took its information to the Moreno Valley Police
Department and conducted surveillance for two months before law enforcement sought the
warrants that were served last week.

MediaOne officials got more than they expected. During the
investigation, officials said, a man they identified as the office manager of Cable
Converter Concepts, Charles Balan, proved the adage that there is no honor among (alleged)
thieves.

Balan took the Cable Converter Concepts idea and opened his
own competing shop, identified by authorities alternately as High-Tech or High-Tek
Converter Labs. It does business on the Web under the "testcube" name.

Officers raided Balan's residence last Wednesday, as
well as the home rented by the principal of Cable Converter Concepts, identified by
authorities as Nathaniel Biely, and the home of a third associate in nearby Romoland.
These communities are located 60 miles east of Los Angeles.

Police arrested Balan for violation of a state law
prohibiting the manufacturing of devices designed to receive unauthorized cable-TV
signals. A second man, Brian Fulk, was detained after he arrived at the scene and
identified himself as an employee of Cable Converter Concepts.

During the searches, officers found a sophisticated
modification lab at the home allegedly rented by Biely -- an operation that took up all of
the space on the second floor.

Also discovered were doctored converters that appeared to
have been stolen from both MediaOne and AT&T Broadband & Internet Services, both
of which operate cable systems in the immediate area.

Raw materials worth about $400,000 wholesale were recovered
from the locations, and investigators said the stock on hand would have potentially
brought the pirates more than $1 million.

According to written records viewed during the raid, the
Moreno Valley men had national businesses. Indeed, packages were labeled and ready to go
to New York and New Jersey, investigators said.

Not only were piracy tools for analog boxes found, but
bogus Digital Satellite System smart cards were seen, Bates said. No signs of
digital-cable piracy were immediately apparent.

Neighbors said they called Biely and told him to come home
when they saw police at his house. He is still at large.

MediaOne notified the press about its intended raid in an
effort to garner publicity for its anti-theft efforts.

But the operator learned a lesson that other systems should
examine before launching a media blitz. The Moreno Valley Police Department and its sister
agency, the Riverside Sheriff's Department, put the kibosh on full coverage of the
raid, citing a recent decision by the U.S. Court of Appeals, Ninth Circuit. Ironically,
that decision was triggered by cable coverage.

The decision, Berger vs. Hanlon, concluded that the
media had violated personal-property rights when producers for Cable News Network reached
an agreement with federal law enforcement to participate in a Montana raid.

The news agency sought footage for an environmental show
that would prove that Montana ranchers were poisoning eagles. The ranchers sued, and the
Ninth Circuit found that the media, by participating in the raid, had become
"government actors" and violated the ranchers' Fourth Amendment property
rights.

Riverside County authorities interpreted the ruling to mean
that the press could not even be on the public street as the warrants were executed, and
they threatened press with arrest if they stepped on the homeowner's property after
the search.

Related