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News Corp Subsidiary Allegedly Hired Hacker to Develop Piracy Software

By Ethisphere.com

EchoStar Communications, the parent company of DISH Network, filed a corporate espionage lawsuit against News Corp’s NDS Group, alleging that the firm hired one of the “two best hackers in the world” to hack into DISH’s satellite network and steal the company’s security codes, according to a report by Reuters. NDS, which provides various security technologies to a number of companies including DirecTV (a rival of DISH), allegedly used the secret codes to “flood the market with pirated smart cards costing DISH $900 million in lost revenue and system-repair costs.”

NDS says that Christopher Tarnovsky, the hacker in question, was only employed to reverse engineer rival companies’ products. Tarnosvsky admitted he helped develop pirating software, but testified that he didn’t use it to hack into DISH’s security system. Tarnokvsky did say, however, that his first payment came in the form of $20,000 cash “hidden in electronic devices mailed from Canada,” such as CD and DVD players. Doesn’t sound like the most transparent way of doing business. He also said that he was paid by Harper Collins, another News Corp subsidiary, on a regular basis for 10 years.

While Tarnovsky says he “never got money for reprogramming Echostar cards,” he did admit that he created something called “the stinger,” a tool capable of electronically communicating with any smart card in the world. To further complicate NDS’s position, another hacker testified that a third hacker and an NDS employee used the stinger to reprogram a number of EchoStar smart cards.

A good breakdown of EchoStar’s allegations can be found by heading over to Wired Magazine’s report on the story.

Full post as published by Ethisphere Blog - Good. Smart. Business. Profit. on April 28, 2008 (boomark / email).