On April 20, 2011, the United States District Court for the Southern District of California entered a judgment in the amount of $214,898,600.00 and permanent injunction against Viewtech, Inc. and its principal Jung Kwak. The underlying lawsuit charged both Defendants with trafficking in Viewsat-branded receivers and software to facilitate the theft of DISH Network’s subscription-based programming. In granting Plaintiffs summary judgment, the Court determined that the Viewsat receivers violated the DMCA because they were designed, marketed and used for piracy and not for any supposed free-to-air use. The court’s order, which ended a nearly four-year legal battle, represents the final blow to the Viewtech operation. In July 2009, Kwak was indicted by a federal grand jury and arrested by the Federal Bureau of Investigation on charges of orchestrating a conspiracy to crack the new NagraStar security technology and from that develop software that would enable Viewsat customers to gain unauthorized access to DISH programming. Early last year, the court sentenced Kwak to 18 months in federal prison. Closing down Viewtech is another major victory in DISH Network and NagraStar’s campaign to prevent satellite television piracy in North America.
On May 6, 2010 Judge Whelan of the Federal District Court for the Southern District of California entered a Preliminary Injunction against Viewtech owner Jung Kwak freezing all of Kwak’s assets. In the Order, the Court found that DISH Network and NagraStar were likely to prevail on the merits of their claims at the conclusion of the litigation and therefore the injunction was warranted. The Court found further support in the admissions made by Kwak in the criminal proceeding against him for conspiracy to hack the NagraStar conditional access technology used to protect DISH Network programming from piracy. A copy of the Order is attached.
On April 16, 2010, Judge Thomas Whelan (Federal District Court for the Southern District of California) granted the plaintiff’s DISH Network and NagraStar a temporary restraining order (“TRO”) against Jung Kwak, the owner of Viewtech (Viewsat).
A hearing is set for May 6th to determine if the judge will convert the TRO to a preliminary injunction pending resolution of the claims against Kwak.
I have been involved with attempts to decrypt the Nagra 3 security system recently implemented by Dish network.
I want to share my experience with any others who are considering engaging in this type of conduct as regards Dish network or any other encrypted systems.
I have been arrested and pled guilty to trying to decrypt Nagra 3 to post the code for my financial gain, and now I face a serious sentence of incarceration as a result of my actions. Had I been successful, the decoding would have spurred sales of the free to air boxes in which I had an interest.
I now understand the federal government takes this kind of activity quite seriously, and they, in cooperation with Dish network investigators, will fine and imprison any persons involved in that activity. And we are not hard to find.
In addition to Dish network being a potential victim of the crime, all of the
networks to whom they pay a fee also lose money. Consequently, the money the networks have to pay all of the people who work in the industry suffer. This includes the writers, actors, directors, stage hands, etc.
I would urge any who read this to please take heed of the serious consequences of stealing encrypted material. And I would encourage others to continue to be law-abiding and to dissuade existing and future satellite pirates. What I have gone through and will go through is simply not worth it.
CEO Viewtech Inc.
OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California
United States Attorney
Karen P. Hewitt
For Further Information, Contact: Assistant U. S. Attorney Mitch Dembin, 619-557-5558 For Immediate Release
NEWS RELEASE SUMMARY – January 29, 2010
United States Attorney Karen P. Hewitt announced that Jung Kwak, also known as “Mr. Viewsat,” of Oceanside, California, Phillip Allison, also known as “thebroken,” and Robert Ward, also known as “TDG” and as “thedssguy,” both of Seminole, Florida, were sentenced today by the Honorable Janis L. Sammartino, United States District Judge based upon their pleas of guilty to conspiring to violate the Digital Millenium Copyright Act. The three defendants pleaded guilty on October 23, 2009, to a one count indictment. Mr. Kwak was sentenced to 18 months in custody followed by three years of supervised release. Mr. Allison and Mr. Ward were each sentenced to one month of custody and five months of house arrest.
In connection with their guilty pleas, the defendants admitted that beginning in or about March 2008, they determined to hire computer hackers to break the latest DISH Network encryption scheme, known as Nagra 3, so that the line of satellite receiver boxes sold by Mr. Kwak would continue to have a market. Mr. Kwak owns and operates Viewtech, Inc., in Oceanside, California. Viewtech imports “free-to-air” or “FTA” satellite receiver boxes and sells them to the public through a network of retailers under the brand name “Viewsat.” To illegally decrypt the DISH network signal, the FTA boxes must appear to have DISH smart cards. That is done by reverse-engineering DISH smart cards and creating computer code which, when downloaded to an appropriate FTA box, will emulate the existence of a smart card and trick the system. In the past, as DISH encryption and countermeasures were defeated, the code has been posted on the Internet and made available for download to anyone.
In the late fall of 2007, DISH announced that it had created a new encryption scheme, called “nagra 3,” and would start shipping new smart cards to its customers. As the new encryption scheme was deployed, owners of FTA boxes would no longer be able to view DISH programming without a subscription, and sellers of FTA boxes would lose their market. The defendants admitted that Mr. Kwak authorized Messrs. Allison and Ward to locate persons to work on cracking Nagra 3. Mr. Kwak agreed to provide funding and a substantial reward for success. Messrs. Allison and Ward admitted that they solicited a third party to join the scheme. Mr. Allison admitted purchasing a specialized microscope to be used in dissecting and analyzing smart cards for the third party and was reimbursed by Mr. Kwak. Mr. Kwak admitted meeting with and paying $20,000 in cash to the third party for photographs of a dissected smart card purported to be a Nagra 3 card. Mr. Kwak also admitted that he offered a reward of $250,000 if the EPROM (eraseable programmable read-only memory) for the Nagra 3 card could be obtained. This case was investigated by Special Agents of the Cybersquad of Federal Bureau of Investigation in San Diego.
DEFENDANTS Case Number: 09cr2646 -JLS
SUMMARY OF CHARGE
One Count – Title 18, United States Code, Section 371: Conspiracy to Violate the Digital Millenium copyright act
Copyright Act Maximum Penalty: 5 years’ imprisonment and $250,000 fine
Federal Bureau of Investigation