The Free Zone Board

[QuasimodoJones]

You're not a thief, you're just someone who steals

http://www.local6.com/news/2300176/detail.html

POSTED: 2:27 a.m. EDT June 28, 2003
UPDATED: 2:55 a.m. EDT June 28, 2003

TAMPA, Fla. -- A man who schemed to steal satellite television signals now has something much bigger than a cable bill to pay - a whopping $180 million restitution order on which he is to make monthly payments on for the next 30,000 years.

Steven R. Frazier will also serve five years in federal prison on a conspiracy charge. Frazier, 28, had plead guilty to a scheme to manufacture and sell devices which would decrypt satellite television signals and allow people to get premium service for free.

"He will have to lead a long and healthy life," quipped Kenton V. Sands, Frazier's defense attorney. Frazier is not actually expected to pay off the entire amount, Sands added, but the monthly $500 payments which were ordered are going to put a bite on his budget once he's out of prison.


"He'll never end up paying a million of that, that's not a realistic figure," said Tampa attorney Richard Escobar, who also represented Frazier.

U.S. District Judge James Moody ordered the restitution Wednesday based on a formula of how much Frazier's intended victims, Direct TV and Echostar, would have lost had his scheme succeeded. The television companies estimate they could have lost $900 million in business.

"I think that's the largest one we received," said Larry Rissler, vice president of Direct TV's Office of Signal Integrity. "We take this very seriously."

Frazier, of Sacramento, Calif., was arrested in Dallas in October by FBI and U.S. Customs agents trying to board a flight to Mexico. The programming device, called the Mikobu III, which he helped design and develop, was bound for about 5,000 customers.

Assistant U.S. Attorney Tony Peluso said Frazier was no stranger to authorities when he was arrested. In 2000, he'd testified before a grand jury regarding satellite piracy and was allowed to return to California.

Instead of mending his ways, Peluso said, Frazier set out to create a better piracy system and soon was regarded among the upper echelon of international satellite pirates.

Frazier was in the middle of trying to hack Direct TV's latest satellite card and "he came within a hair's breath" of doing so, Peluso said.

"He deserves credit for near-genius intellect," Peluso said. Escobar disputes that his client is the masterful pirate the government describes.

Frazier was arrested in October 2002, when Customs agents tracking his operations found computer chips and hacking gear in his luggage after on a flight from Canada.

Frazier has again agreed to cooperate. Peluso said there are 50 open cases stemming from the investigation.

An estimated 3 million people illegally watch satellite television using devices that unscramble satellite TV signals. The industry estimates it looses $4 billion a year in revenue.

Rissler, a retired FBI agent, said what Frazier will pay will hardly scratch the surface of what satellite television companies spend each year trying to protect their signals and track down satellite pirates. Echostar declined to comment on the sentence.

Direct TV employs five former FBI agents, a bevy of engineers and keeps on retainer three law firms in the U.S. and Canada all aimed at fighting piracy, Rissler said. The company uses civil lawsuits against everyone from the pirates to those who buy the illegal devices in hopes of recouping their losses.

Judges are often advised on how much a defendant did, or in Frazier's case could have, cost a company and the restitution awards are based on those estimates. Rissler said the company has a formula which multiplies the value of the loss programing, the number of illegal devices distributed and how long they were in used to come up with a dollar figure.

"He (Frazier) was a significant player because, in my view, he trafficked devices and was involved in developing technology," Rissler said.

Sands said Frazier wasn't shocked by the amount of restitution. It will be up to the judge to decide if Frazier will keep making payments after his three years of probation ends.

"He was prepared for a number like that," Sands said, explaining that law enforcement and the television companies are becoming more aggressive in punishing satellite pirates.

"I think whether it is $900 million or $180 million of $1.5 million it is completely irrelevant to him. Those numbers are so large they are rendered more or less meaningless."