A federal grand jury in Sacramento, Calif., has indicted two men on felony charges related to their business of selling pirated cable set-tops.
The men — Darryl Poll of Simi Valley, Calif., and Carlo Mireles of Las Vegas — are already known to cable's signal-theft investigators. Both were prosecuted in 1996 for similar offenses and were permanently enjoined from manufacturing and selling descramblers.
Agents from the Internal Revenue Service, Sacramento Valley High-Tech Crimes Task Force and U.S. Secret Service raided a business operated by the two men on Nov. 25.
The indictment accuses the men of "masterminding a fraudulent nationwide and international cable-piracy scheme" that resulted in the sale and distribution of approximately 50,000 descramblers designed to steal cable signals.
McGregor Scott, the U.S. Attorney for the Eastern District of California, announced the indictment on Dec. 17. He estimated that the illicit operation's gross topped $10 million.
The suspects conducted business via the Internet and through magazine ads. Investigators pursued the offers for Comcast Corp. and CSC Holdings Inc. (Cablevision Systems Corp.).
Cablevision owned a system in Simi Valley in 1996 and participated in the earlier prosecution. At that time, Poll was found liable on civil charges and enjoined from operating a set-top business.
According to the indictment, the two men structured the company to make it appear as if it was based in Las Vegas and controlled by Mireles. They were doing business under the names Wholesale Electronics and Red Rock Group Ltd., according to authorities.
"This indictment demonstrates that Comcast and other operators in the industry will continue to work with law enforcement to pursue these thieves," said Susan Gonzales, Comcast's Sacramento-area spokes-woman.
The National Cable & Telecommunications Association called the indictment the largest anti-piracy prosecution of 2003.
The two men aren't the biggest pirates known to the industry but are still "pretty significant," said Nilda Cid Gumbs, director of the Office of Cable Signal Theft.
"Anytime we see law enforcement hunker down and go after them like this, that's great," she said.
The indictment accuses the men of conspiracy to intercept communications services, mail fraud, assisting in cable signal theft and conspiracy to commit money laundering. If convicted, each could be sentenced to 62 years in jail, plus fines of $3.5 million or double the "pecuniary gain" of the venture, whichever is greater.
Poll was taken to the U.S. District Court in Los Angeles Dec. 19 for further proceedings. That court issued the 1996 injunction.
Mireles was scheduled to appear in court in Sacramento on Dec. 22, according to Scott.