14 DAY TRIAL // Jung Kwak, 33, of Oceanside, California, and owner of a company called Viewtech, has been indicted along with Phillip Allison, 35, and Robert Ward, 54, of Seminole, Florida, for conspiring to violate the Digital Millennium Copyright Act. The defendants are accused of paying an unnamed individual to reverse-engineer the EPROM of the smart cards used by the DISH Network.
According to the indictment, Kwak's company sold free-to-air receivers (FTA) called Viewsat, which are normally capable of capturing free satellite TV signals. Despite the generally low interests for such free programs, Kwak's business ran quite successfully, with profits in the millions-of-dollars range.
This is explained by the fact that Kwak integrated special programming into the receiver boxes, allowing them to decode paid programs offered by TV networks to their subscribers, making them very attractive. Knowing that its previous signal-scrambling technology had been cracked, Echostar's DISH Network developed a new encryption scheme, known as "Nagra 3."
The company started distributing Nagra 3-based smart cards to its subscribers beginning with November 2007, in time seriously crippling Kwak's FTA receiver business, which was no longer able to decode the newly encrypted signals.
According to the indictment, Kwak, known online as "Mr. Viewsat," Phillip Allison, aka "thebroken," and Robert Ward, aka "thedssguy," set on to crack the new encryption. In order to do this, the three contacted a third-party individual, whose name is not disclosed and to whom Kwak promised over $250,000 if he succeeded.
It is also mentioned that Kwak paid for an $8,500 special microscope that was required to analyze the DISH smart cards in order to reverse-engineer their EPROM, referred to as "rom 240." Kwak is also said to have covered other research expenses. It is noted in the indictment that, on April 5, this year, he paid the third party an additional $20,000 for photographs of the smart cards' micro-circuitry.
San Diego 6 News reports that Assistant U.S. Attorney Mitch Demblin has filed a motion to hold Mr. Kwak without bail, but, according to DishNewsOnline, he eventually posted the bond, which was set at $500,000 by Magistrate Judge William McCurine Jr.