Unusual Case History: Busting Cable Pirates

Out of the Files: Unusual Case Histories
Busting the Biggest Band of Cable Pirates in U.S. History

02/02/05

Consider: a Jersey City street vendor who sold hot dogs, relish, and “hot” cable box de-scramblers. A crook who “innocently” told our undercover agents, “The only way the FBI could get me is if they were standing right here, right now watching me do this.” A corrupt lawyer who crashed his own car and even shot himself in the neck—just to get out of entering a plea in court.

They’re all part of “Operation Cable Trap”—a strange case from our files that smashed what turned out to be the nation’s largest cable piracy ring ever.

At the center of it all was Joe Smith*, a Florida crook with ties to the mob. For years, he sold illegal cable boxes that unscrambled signals and provided “free” cable service. His partners in crime? Corrupt cable company insiders who provided the boxes, other thieves who stole them, technicians who modified them, and crooks who sold them, to name just a few.

We learned of the ring in 1991, when we got a tip about that duplicitous hot dog stand. To bust the ring, we created “Prime Electronics & Security, Inc.” in a 2,000-square foot warehouse in Kenilworth, New Jersey. We filled it to the brim with cable boxes and staffed it with undercover agents and a local police officer. We didn’t have to wait long for our criminal customers to come calling.

To unearth all elements of the scheme, we even agreed to help the crooks launder their illicit proceeds across the world. As a result, we soon turned up a massive money laundering operation based in the Cayman Islands, which led to another major investigation—“Operation Hot Money.”

Smith’s pirating days came to an end in 1995, when he ordered up a thousand cable boxes from our “business.” At the same time, agents in many other states executed 39 related search and seizure warrants on his criminal partners. Ultimately, we seized $15 million in ill-gotten gains from the ring.

These cable pirates didn’t have to walk the plank, but they did land in the brig. In the end, 34 members of the ring were convicted—including Smith, who pled guilty. The investigation also generated dozens of spin-off cases involving not just money laundering, but public corruption/bribery, insurance fraud, and bank fraud.

The case had more than its fair share of fascinating details. Follow this link if you want to learn more. And go to our FBI History webpage to read about more interesting cases from our files.

* — Not his real name. Photo: Two members of the cable ring arrange a deal.