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“I never got money for reprogramming Echostar cards. Someone is trying to set me up,” said Christopher Tarnovsky with regards to the allegations leveled against him.
News Corp claims hackers only assisted in internal network security

The world’s “second best hacker” says he was hired under the table by media conglomerate News Corp, which owns the Wall Street Journal, MySpace, Fox News, and DirecTV.

Christopher Tarnovsky, testifying in Echostar v. NDS, says he was paid $20,000 -- mailed inside electronics sent from Canada -- to break into DISH Network’s satellite system and steal security codes necessary for pirating DISH Network’s satellite signals. EchoStar communications, which owned the DISH Network before a split in December of 2007, alleges that hackers from NDS Group, owned by News Corporation, employed hackers to flood the market with smart cards for satellite receivers designed specifically to steal paid DISH content. Both EchoStar and DISH, as separate entities, are plaintiffs in the case.

The suit alleges that the smart cards cost DISH $900M in lost sales and network repairs.

Tarnovsky says that while he was employed to develop “pirating software,” it was not used against DISH or any other rival – instead, it was designed to secure DirecTV’s network.

DISH attorneys said Tarnovsky constructed a device called “The Stinger” – which Tarnovsky admitted to doing – that was able to interface with any smart card, regardless of which company it was designed to work with. Tarnovsky says his actions with The Stinger were aboveboard, but DISH attorneys claimed that hackers and/or NDS employees used it to reprogram at least 50 DISH Network smart cards.

“I never got money for reprogramming Echostar cards,” Tarnovsky testified. “Someone is trying to set me up.”

Patent records reveal Tarnovsky received patent protection on a “system for testing, verifying legitimacy of smart card in-situ and for storing data therein” in 2005.

Earlier, fellow hacker and associate Tony Dionisi testified that he recalled Tarnovsky bragging to him about The Stinger, and told the court that he knew of “another hacker and NDS employee” who used the machine to reprogram DISH’s smart cards.

Tarnovsky says he was paid on a regular basis for 10 years, and received paychecks from Harper Collins, News Corp’s publishing company.

DISH lead attorney Wade Welch, speaking earlier this month, said NDS’ plan was to take hackers “off the streets” and “turn them on the competitors.”

“They called it the Black Hat Team,” said Welch.

NDS says it’s done nothing wrong. “Because this is a competitive business, NDS also monitors competitors,” said NDS attorney Richard Stone. “NDS has done nothing to illegally harm or damage EchoStar. All NDS has done is compete hard and fair in the marketplace.”



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By mpjesse on 4/25/2008 12:33:43 AM , Rating: 2
These hackers were employed by NDS. Though NDS is a seperate entity, it does not legally exclude DirecTV from liability due to the satellite equipment tie-in.
That said, stretching liability to News Corp is a little far fetched and silly to suggest at this point. Just because News Corp owns NDS doesn't mean this lawsuit will go any further than NDS.

Regardless of liability it looks like NDS is in a lot of trouble. I wouldn't be surprised to see criminal charges show up in the near future. Even if the actions of these hackers weren't sanctioned by NDS, they were still employed by NDS at the time and were probably given access to technology that otherwise would not be available to a card hacker (hence the liability). Furthermore, it seems NDS all but encouraged these hackers to break into DISH's network. That in and of itself is concerning, but the accusation that the hackers used the information to provide a means for the public to hack DISH cards is very, very scary.

This whole "reverse engineering" defense NDS has presented sounds awfully fishy. Someone at NDS has used some very poor judgement. When it comes to trade secrets the DoJ doesn't mess around. Simply google "coca-cola espionage case" and you'll know what I mean.

Where there's smoke there's a fire. NDS isn't going to come out of this one unscathed.




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