DIRECTV Targets Canadian Suspects in Extensive Fraud Scheme; Nine Locations in Canada Raided; Lawsuit Claims $20 Million in Damages; Grey Market Piracy Also Alleged

EL SEGUNDO, Calif.--()--March 3, 2005--DIRECTV, Inc. announced today that it has filed a lawsuit in Ontario, Canada against 19 Canadian citizens and five of their businesses that it believes were participating in a scheme to activate fraudulent DIRECTV accounts that enabled individuals to receive DIRECTV programming without authorization by or proper payment to DIRECTV.

In connection with the lawsuit, DIRECTV executed civil seizure orders at nine separate locations in southern Ontario and recovered a significant volume of computer files and business records related to the activation fraud scheme and grey market activity, as well as equipment used in the past to modify DIRECTV access cards to enable theft of DIRECTV programming.

The culmination of a six-month investigation by DIRECTV's Office of Signal Integrity and Legal department, the raid was the largest ever conducted by DIRECTV on a single day.

The defendants who DIRECTV believes played the most prominent role in the fraud include: Paul Arthur Cater, Waterloo, Ontario; Mile Turkalj (aka Mike Turkalj), Kitchener, Ontario; Martyn Gillott (aka Martin Gillott), Beamsville, Ontario; Theresa Patterson, Kitchener, Ontario; and Karen Gauthier, Shakespeare, Ontario. The defendants were affiliated with a number of businesses that were also identified or named as defendants in the lawsuit including Zed Marketing, Inc. and Huworks.tv, which DIRECTV believes are the biggest players in the scheme. The two companies, along with several key defendants in this case, have a long history of pirate activity and several of them have been charged criminally in other signal theft cases. Other businesses allegedly playing prominent roles in the fraud were Eonme.com. Inc. and Satonline.cx.

The lawsuit alleges that the defendants perpetrated the scheme through a complex network of companies and Web sites used to provide bogus U.S. addresses and other false information to establish DIRECTV accounts, which were then used to illegally activate programming for individuals, who then paid the defendants to receive DIRECTV(R) programming without authorization by or proper payment to DIRECTV.

Through their sale and distribution of piracy technology and activations, including DIRECTV access cards to dealers and consumers in the United States and by facilitating the unauthorized reception of DIRECTV programming, DIRECTV alleges the defendants violated provisions of Canada's Radiocommunication Act. Under the provisions of the Act, DIRECTV is entitled to damages, which DIRECTV estimates is in excess of $10 million. DIRECTV also claims punitive damages of $10 million.

"Since DIRECTV secured its signal from pirates with new generation access cards in June of last year, these individuals turned to other illegal means to receive DIRECTV programming without our authorization," said Dan Fawcett, executive vice president, Legal and Business Affairs, DIRECTV, Inc. "We were able to detect the fraudulent activity, and through an extensive investigation we have identified these individuals, who we believe have engaged in various forms of piracy, including grey market activity, over a long period of time."

He added, "Through this action we believe we have broken the piracy-fraud ring, and where grey market activity is involved, it also demonstrates our commitment to respect the territorial limitation of our programming service and prevent those in Canada from using false U.S. addresses to receive DIRECTV service."

DIRECTV recently filed a lawsuit in U.S. District Court in Florida against seven individuals it claimed created false subscription accounts and illegally activated hundreds of access cards and receivers. It also recently settled a claim with a Utah couple it took legal action against in September of last year for similar fraudulent activity.

DIRECTV is the nation's leading and fastest-growing digital multichannel television service provider with more than 13.9 million customers. DIRECTV and the Cyclone Design logo are registered trademarks of DIRECTV, Inc., a unit of The DIRECTV Group Inc. (NYSE:DTV). The DIRECTV Group is a world-leading provider of digital multichannel television entertainment and broadband satellite networks and services. The DIRECTV Group is 34 percent owned by Fox Entertainment Group, which is approximately 82 percent owned by News Corporation. For more information visit www.directv.com.

Contacts

DIRECTV, Inc.
Robert Mercer, 310-726-4683

Contacts

DIRECTV, Inc.
Robert Mercer, 310-726-4683