California Federal Court Enters Final Judgment and Permanent Injunction against nFusion Defendants:

On May 25, 2011, the United States District Court for the Central District of California entered a consent Final Judgment and Permanent Injunction against Warren Scheibe, www.nFusionOnline.com and Scheibe’s distribution companies Forward Motion Products, LLC and Forward Motion, Inc.  DISH Network, NagraStar and EchoStar Technologies filed suit against Scheibe and his companies in June 2010 for their role in the marketing and distribution of nFusion-brand receivers and components.  The Court’s Order enjoins defendants from marketing or distributing similar devices in the future and awarded DISH Network and NagraStar a judgment in the amount of twenty five million ($25,000,000) against the distribution companies.  Scheibe has also forfeited Defendants’ substantial remaining nFusion inventory to NagraStar for destruction, as well as turning over the various nFusion-related websites used for marketing and online product sales.  The Court’s permanent injunction further prevents Defendants from any future assistance in circumvention which will carry a statutory penalty of up to $110,000.00 per violation.

IKS is highly traceable – End-users beware!

NagraStar has recently initiated very successful efforts to investigate and prosecute end-users for the theft of DISH Network programming.  Evidence obtained by NagraStar through their investigations of unlawful activities by upstream dealers and prosecutions of distributors of piracy related hardware and software, is being used to assert claims against downstream end-users.  NagraStar takes any attempt at the circumvention of their technology and customers’ subscription-based television services very seriously and is committed to taking all available legal action against offenders, whether they are coders, product distributors, website operators or downstream end-users.  NagraStar remains willing to work with anyone who has knowledge or evidence of any such individuals or businesses.

Tax investigation into satellite scheme nets jail time for former Sundridge man

Sudbury, Ontario, May 6, 2011… Davin Omeir, formerly of Sundridge, Ontario, pleaded guilty in the Ontario Court of Justice in Parry Sound on March 15, 2011 to two counts of income tax evasion under the Income Tax Act and to one count of fraud over $5,000, one count of money laundering and one count of possession of proceeds of crime under the Criminal Code. On April 1, 2011, in the Ontario Court of Justice in Sudbury, Justice Glaude sentenced Omeir to one year in prison for each count of tax evasion, to be served concurrently. Mr. Omeir was also sentenced to two years in prison for each count under the Criminal Code, to be served concurrently. The prison sentences for the Criminal Code counts are consecutive to the tax evasion sentence, making the total jail sentence three years. In addition to the jail sentence, the Judge levied a fine of $223,849, representing an amount equal to 100% of the total federal taxes sought to be evaded. The fine must be paid within three years.

Omeir, the sole shareholder and director of Cantopia.Com Inc., provided a tax preparer with financial information for his personal and corporate tax returns. The Canada Revenue Agency (CRA) investigation revealed that Omeir understated the corporation’s income by $626,331 during the taxation years 2003 to 2007 and, as a result, the corporation failed to remit $81,423 in federal taxes. In addition, Omeir appropriated funds from the corporation and did not report these funds as income on his personal income tax returns for the years 2002 to 2007. In doing so, Omeir attempted to evade personal federal taxes of $142,426.

Cantopia.Com Inc. was an internet-based business that sold equipment and services enabling persons to decode encrypted satellite television programming signals without paying a subscription fee. The CRA investigation revealed that the business activity used by Omeir to evade taxes also defrauded the lawful distributors of encrypted subscription programming signals in Canada and the United States. The scheme allowed Omeir to participate in money laundering activities in the amount of $300,000. On-line merchant accounts were used to process payments for the sale of the illegal products and services and proceeds were sent to bank accounts located in Switzerland, Malta and the Turks and Caicos. As a result of the illegal scheme, Omeir was able to use some of these funds to pay for personal living and travel expenditures, the maintenance of a home in Sundridge, the rental of a home in Mississauga, and the purchase of a home in Turks and Caicos.

The preceding information was obtained from the court records.

“Canadian taxpayers must have confidence in the fairness of the tax system,” said Vince Pranjivan, the Acting Assistant Commissioner of the Canada Revenue Agency for the Ontario Region. “To maintain that confidence, the CRA is determined to hold tax evaders accountable for their actions.”

Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the Canada Revenue Agency (CRA) against them. These individuals may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA’s website at www.cra.gc.ca/voluntarydisclosures.

Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.

California Federal Court Enters Preliminary Injunction Banning Further Sales of SV-Lan and New Link Products

On April 25, 2011 the Honorable Thomas J. Whelan of the Southern District of California issued a Preliminary Injunction Order banning further distribution of devices marketed as the “SV-Lan” and “New Link” pending final resolution of DISH Network and NagraStar’s litigation against ProSonicview and its owner Christopher Whitcomb.  Whitcomb was a former employee of Sonicview USA, Inc. which has also been sued by DISH Network.  In that case, Judge  M. James Lorenz, also in the Southern District of California, entered a similar injunction order on March 29, 2010 enjoining sales of the Sonicview iHub, 8PSK TFEC boards and related software.  The iHub was the predecessor product for both the SV-Lan and New Link, and all three devices as determined by the Courts were designed and distributed to work with Sonicview-branded receivers to engage in piracy of DISH Network programming.

California Federal Court Enters $214 Million Summary Judgment against Viewtech and its CEO

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.

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