Los Angeles, California Man Arrested For Stealing Trade Secrets(January 2, 2003)
DOJ Seal
January 2, 2003

Federal Bureau of Investigation
Los Angeles Field Office
11000 Wishire Blvd
Los Angeles, CA 90024
Phone: (310) 996-3341
Fax: (310) 996-3345
Contact: James W. Spertus
Assistant United States Attorney
Phone: (213) 894-5872
FBI Press Office
Phone: (310) 996-3341,3342

Los Angeles Man Arrested for Stealing Trade Secrets

Case Alleges Theft of Information on DirecTV’s Most Advanced ‘Smart Card’ That Was Posted on Hacker Sites on Internet

In the first federal case in Los Angeles that alleges the theft of trade secrets, a Los Angeles man was arrested this morning for stealing secret information used to control access to the digital satellite services offered by DirecTV.

Igor Serebryany, 19, a student at the University of Chicago, was taken into custody this morning without incident by special agents with the Federal Bureau of Investigation. In a criminal complaint filed Tuesday in United States District Court in Los Angeles, Serebryany is accused of stealing trade secret information pertaining to DirecTV’s latest and most sophisticated conditional access card, the “Period 4” access card.

The information was stolen from the law offices of DirecTV’s legal counsel, Jones Day Reavis & Pogue in Los Angeles. DirecTV had provided the information to Jones Day in connection with civil litigation between DirecTV and one of its security vendors, NDS Americas, Inc. Serebryany was temporarily employed by an outside document imaging service that was hired by Jones Day to prepare documents in relation to the litigation. Serebryany obtained access to documents without Jones Day authorization and in violation of established procedures and agreements.

DirecTV delivers digital entertainment to millions of homes and businesses throughout the United States. A consumer wishing to subscribe to DirecTV programming must first obtain necessary hardware items, including a conditional access card, to receive the satellite signals. The access card is the key security component in the DirecTV system.

DirecTV invested more than $25 million to develop the latest generation access card with the assistance of its security venders. The three earlier versions of the DirecTV access cards have been compromised by hackers who have developed ways to circumvent DirecTV’s security technologies. The Period 4 access card is the only DirecTV access card that has yet to be compromised by the pirate community.

Jones Day was outside counsel for DirecTV and represented the company in civil litigation that was filed earlier this year by DirecTV against NDS, which was the developer and supplier of the proprietary encryption and smart card technology. In preparation for this litigation, DirecTV delivered trade secrets to Jones Day. Some of the trade secret information was so secret and valuable to DirecTV that DirecTV had previously maintained the information only in an encrypted format on computer hard drives secured at DirecTV facilities.

In September and October 2002, some of this sensitive trade secret information was posted on pirate websites on the Internet. These secrets included confidential internal design notes and correspondence between DirecTV and NDS regarding the Period 4 access card architecture and security features. Through forensic analysis of computer evidence and other investigative techniques, the FBI determined that Serbryany stole the trade secret information and published it to members of the hacking community for the sole purpose of helping the hacking community with its efforts to crack the Period 4 access card.

Serebryany is expected to make his first court appearance this morning in Courtroom 341 of the Roybal Federal Building, 255 East Temple, downtown Los Angeles. Serebryany faces a statutory maximum 10-year sentence if convicted.

The case was investigated by the Federal Bureau of Investigation which received substantial assistance from DirecTV and the law firm of Jones Day Reavis & Pogue. CONTACT: Assistant United States Attorney James W. Spertus

(213) 894-5872 FBI Press Office

(310) 996-3341, (310) 996-3342