Feds go after the Mod Chip industry

[Dervacumen]

Something about being a violation of the DMCA

I guess Nintendo's threat of a few months ago had a little more substance than most people thought.

[HaRuMaN]

boo!

[Green Giant]

GAY...

"These crimes cost legitimate businesses billions of dollars annually and facilitate multiple other layers of criminality, such as smuggling, software piracy and money laundering."

Wow, I guess I should cancel that shipment from the cartel for this weekend.  Have to move the laundering business offshore now.
Those damn modchipers and their money laundering.

Well, time to go have my parents hold some game systems for me.

[SNAAKE]

wow..I like how they make it sound like its a multi billion $ business. "money laundering and smuggling" 

[SavannahLion]

It's ---fouled up beyond all recognition--- up how Nintendo and other companies are able to shoehorn the legality of hardware modification under an umbrella law like the DMCA, then laugh in the face of the consumers. Even worse when dickless ---steaming pile of meadow muffin--- faced jerkwads calling themselves news reporters tilt the story making the ---fudgesicle--- knobs the victim.

When are judges and the general public going to figure out the hardware is a tool? It's still perfectly legal (as of this writing) to buy a crowbar, but it's obviously not legal to break into someones house with it. It won't be long before they require an ID, a fingerprint and a bank statement so people can buy tools more sinister than a measuring stick.

How I would love to see Bill Clinton's head crushed under truck tire on national TV for the mess he created.

[DarkBubble]

AGAIN?!   

Honestly, just because Sony's in a world of hurt, it doesn't mean that it's time for you to return to your old Gestapo tactics, Nintendo.  And to think, both the DS and the Wii were on my list.

*raises middle finger*  I'm doing this as hard as I can!

 

[danny_galaga]

yeah, just when i was forgetting how nasty nintendo were in the 90s! making it illegal to mod a console is akin to making hotrods illegal in my books...

[northerngames]

Microsoft, ESA and Nintendo Press Release on U.S. 'ModChip' Raids
>> Microsoft, The Entertainment Software Association (ESA) and Nintendo posted press releases concerning the raids on US modchip resellers.

The Microsoft press release:

Microsoft Corp. today issued the following statement in support of the U.S. Immigration and Customs Enforcement's (ICE) anti-piracy enforcement actions taken against distributors of modification chips designed to circumvent copyright protection on popular game consoles, including the Xbox® and Xbox 360™ game consoles:

"Microsoft applauds ICE for its effort to reduce piracy and protect the intellectual property of Microsoft and its industry partners. This is an important step in the continuing fight against piracy and the threat it presents to the global economy and consumers throughout the world."

The ESA press release:

The Entertainment Software Association (ESA) today commended U.S. law enforcement agents and prosecutors' work in undertaking the nation's first and largest anti-piracy raid of its kind. The action, code-named "Operation Tangled Web," targeted retailers selling modification chips through the Internet for the Microsoft, Nintendo and Sony game console systems. Law enforcement executed 32 search warrants in more than 20 localities across the country within a 24-hour period.

"Plain and simple, selling and distributing products to illegally bypass game consoles' piracy protections is a crime with real-life consequences. This is not a game; we're talking jail time. Enforcement initiatives of this scope send a clear message to both the public and pirate community that this illegal activity will not be tolerated," said Michael D. Gallagher, president of ESA, the trade association representing U.S. computer and video game publishers. "We commend Immigration and Customs Enforcement (ICE), the U.S. Department of Justice, and the participating U.S. Attorneys' offices for targeting individuals and groups selling 'mod-chips' and pirated game software."

Modification chips or "mod-chips" are typically installed in video game console systems to circumvent the technological protection measures and enable the user to play pirated game software. These chips, as well as other circumvention devices, are illegal under the Digital Millennium Copyright Act (DMCA).

"As an industry, we protect our intellectual property, encourage our government to crack down on those who break the law, and urge other governments to take similar action against video game pirates. Yearly worldwide piracy costs total over $3 billion and it impinges on businesses and employees who create, develop, and distribute innovative products," said Gallagher. "The ESA will work with federal law enforcement to ensure that those engaged in the illegal trade of circumvention devices are prosecuted to the fullest extent of the law."

The Nintendo Press Release:

Today U.S. Immigrations and Customs Enforcement agents executed 32 federal search warrants in 16 states as part of an investigation into the alleged sale and distribution of illegal modification chips for various video game consoles, including Nintendo's Wii™ home video game system. The mod chips designed for the Wii console circumvent the security embedded in the hardware and allow users to play counterfeit Wii software.

This Immigrations and Customs Enforcement investigation represents the largest national enforcement action of its kind targeting video game piracy. Nintendo has worked closely with this branch of the Department of Homeland Security, and fully supports its actions and other investigations currently underway.

"Nintendo and its developers and publishers lost an estimated $762 million in sales in 2006 due to piracy of its products," said Jodi Daugherty, Nintendo of America's senior director of anti-piracy. "Nintendo's anti-piracy team works closely with law enforcement officials worldwide to seize mod chips and counterfeit software. Since April, Nintendo has seized more than 91,000 counterfeit Wii discs globally."

[Green Giant]

This will be hilarious if they actually try to bring someone to court for just having a modchip installed.  Especially if they only have copies of games they actually own.

This brings ownership rights of anything you own into question.  Is that really your tv or are you renting the technology from the maker.  Do I own this computer I am using or should I ask AMD if I can keep typing or overclock their processor?

[Samstag]

I'd imagine that they're only busting people who were installing chips and preloading illegal content.

A quick browse through craiglist would turn up hundreds more potential busts.

[Dervacumen]

The Nintendo Press Release:

"Nintendo and its developers and publishers lost an estimated $762 million in sales in 2006 due to piracy of its products"
"Since April, Nintendo has seized more than 91,000 counterfeit Wii discs globally."

Let's see here.  Assuming games cost $50 each, a $762M loss would mean 15,240,000 illegal copies in 2006.
In four months, Nintendo seized 364,000 copies.  Extrapolated out to a year that's 1,092,000 illegal copies they could confiscate.  I suppose that's a reasonable estimate if you assume they are only confiscating 7% of the available illegal copies, primarily from the big players.
With that much on the line I wouldn't be surprised if Nintendo was working on a way to brick wii's with modchips installed, or at the least prevent new titles from running.  I mean, if most of the mod chips can be updated via DVD doesn't it make sense that Nintendo would reverse engineer the modchip update software and use it to create their own detection code on their new releases?

I suspect the ensuing lawsuits might prevent them from doing so.

[ChadTower]

It also doesn't account for people downloading game images and burning themselves or people renting and copying themselves.

[tommy]

Death to the ripoff that is gamestop.

[patrickl]

It's always a bit of a guess what their loss is. Do they count every copy that might ever be made? If people download games or buy cheap copies, it's not realistic to claim the same people would have bought all those games if they had to pay full price.

[Green Giant]

I'd imagine that they're only busting people who were installing chips and preloading illegal content.

A quick browse through craiglist would turn up hundreds more potential busts.

"investigation into the alleged sale and distribution of illegal modification chips for various video game consoles, including Nintendo's Wii"

There is no illegal software that can be preloaded onto the wii, and the article says distribution of mod chips, not the games.  If they raid some guys house who people hire to install modchips, what will be there argument?  Lots of places adds out there say we will install your modchip for you.

The only case they have is if these people give you copies of games or with an xbox, have it preloaded on the system.  Hell you could sale xbox's with them that have the software to rip the games already loaded.

If the raids weren't for people selling illegal games, just selling modded systems, then the government is about to get a countersuit.

[ahofle]

If the raids weren't for people selling illegal games, just selling modded systems, then the government is about to get a countersuit.

It is apparently part of the ridiculous Digital Millennium Copyright Act:
"...criminalizes production and dissemination of technology, devices, or services that are used to circumvent measures that control access to copyrighted works (commonly known as DRM) and criminalizes the act of circumventing an access control, even when there is no infringement of copyright itself."

I always thought the modchips themselves were legal (until yesterday).  As my infinitely bad luck would have it, I lost my Wii in this raid.  The modder actually called me.  My Wii was packed up and just about ready to ship out that morning.  He said they took all his consoles (including mine) and his home computer, but didn't charge him with anything.  I know it's pretty unlikely they would go after little fish like me, but I'm pretty nervous about them having my name/address which was in his customer database.    The funniest part about this to me is that this little 'operation' is being performed by the US Customs and Immigrations Departments, who apparently rank busting illegal solderers higher than watching our borders and stopping illegal immigration.

[Green Giant]

As my infinitely bad luck would have it, I lost my Wii in this raid.  The modder actually called me.  My Wii was packed up and just about ready to ship out that morning.  He said they took all his consoles (including mine) and his home computer, but didn't charge him with anything.

Wow, that sucks man.  I feel for you there.  As long as you don't have any illegal games, it shouldn't be a problem. 

After seizing game systems and attacking people putting the chips in, this will get some major awareness.  This is the sort of thing that goes all the way to the supreme court.  Sucks for you cause if that happens, you won't see your wii again until after the Wii2 comes out.

They never got mad at tv makers for having tuners built in that would allow a tv to steal cable.  Wonder if they are gonna go after gun makers since guns are used in crimes.

[ChadTower]

Sounds like you got lied to, bro... law enforcement doesn't go into people's homes, seize their goods, and not charge the person with anything.  It's either illegal to have them, and they get charged / good seized, or it's not illegal and they do nothing.

[tommy]

What do you guys think the purpose of all this is for? They don't want people stealing software and do not want anyone making mods to encourage that sort of thing. It's not difficult to understand. You spend good money and effort to make a game and just want the money you deserve from customers who would buy your work, that's all, and the law is protecting those people in anyway they can.

[whatzcrackn]

Whatz-a-mod-chip 

[HaRuMaN]

Sounds like you got lied to, bro... law enforcement doesn't go into people's homes, seize their goods, and not charge the person with anything.  It's either illegal to have them, and they get charged / good seized, or it's not illegal and they do nothing.

Was Harpal modding that Wii??    

[Howard_Casto]

Allow me to take a step back here an be devil's advocate for a minute.  They didn't take this action back when modchips had a valid use (homebrew). They decided to act now, when the wii and 360 modchips literally can only be used to circumvent copyright protection... in other words they are only useful for piracy. 

I have a wii, but I sure haven't bought/made a modchip for it yet.  Why?  Well aside from running illegal copies of brand new games, I can't do anything with it. 


I will say the profit losses are extremely exaggerated, as is the "danger" of such mods.  The problem I always have with these estimates is they neglect to mention that the manufacturer's don't lose a dime from piracy (you don't swipe a copy off the shelf, you download a copy off the net, meaning no physical product is stolen.. only "i.p.") and generally speaking, people willing to steal games aren't the ones buying said games, meaning they didn't lose a potential sale.

These mod-chip manufacturer's seriously rip off their customers btw.  The average modchip is about 5 bucks in parts (often parts you can buy off the shelf), yet they generally start at 40 bucks..... averaging out to around 50-60 bucks a chip.   So while defending your personal rights is one thing, I wouldn't exactly side with the mod-chip makers and "pro" installers, who are screwing you and the original manufacturer at the same time.

[ahofle]

Sounds like you got lied to, bro... law enforcement doesn't go into people's homes, seize their goods, and not charge the person with anything.  It's either illegal to have them, and they get charged / good seized, or it's not illegal and they do nothing.

That thought crossed my mind, but I highly doubt it.  His entire website is shutdown too. 

Also, in response to Howard, the wiikey modchip can be used to run Gamecube homebrew on the Wii (which I was really interested in as I hear there are some good emulators for it).

[danny_galaga]

It also doesn't account for people downloading game images and burning themselves

[ChadTower]

That thought crossed my mind, but I highly doubt it.  His entire website is shutdown too. 

Of course it is shutdown... he's afraid to maintain the business.  Sending out those units is illegal, he knew it then but now he's afraid they'll come down on him.  So he closed up shop and kept whatever units he had in for service.  What he told you happened is an illegal seizure if no one was charged with anything.

[ahofle]

Well maybe it is a scam (I would actually feel BETTER if that were the case), but he is one of the biggest modders in the country, so I can't imagine he would be excluded from the raids.  Also he sounded genuinely freaked out on the phone when he called me.  I just figured the police raiding the place wouldn't know a modchip from a potato chip, or even know how to open a Wii, so anything they confiscated would be taken to the lab for examination and then the charges would be filed.  Also, I've never heard that you have to have charges prepared to obtain a search warrant, just probably cause.

[ChadTower]

A search warrant is different from seizure of goods.  It's either illegal to have them (and thus you can be arrested on the spot) or it's not, and they can't seize something legal to have.  They have a warrant to search for illegal goods... and of course, by their nature, they are illegal, so he'd be arrested for possessing them.

It's possible he had them at a different site and thus he wasn't there when they took them.  It's also possible they didn't arrest him if they couldn't tell by looking whether or not they were modded.

[Samstag]

A search warrant is different from seizure of goods.  It's either illegal to have them (and thus you can be arrested on the spot) or it's not, and they can't seize something legal to have.  They have a warrant to search for illegal goods... and of course, by their nature, they are illegal, so he'd be arrested for possessing them.

While this all makes sense, it's not the way things work.  When computers are involved it's fairly common for a police raid to involve taking everything that might be remotely connected to the crime including every PC and console in the home/business, every disk of any kind, etc.  They can keep it all quite a long time, whether they ever charge you with a crime or not.

Ask Steve Jackson about that!

[northerngames]

here is what a convicted person of this had to say this was a member from another site that made the news today..




FallsInc - When ICE hit me, they had a warrant for my grandma's house where I had all my packages sent. They had a picture of the house, and a description of it, meaning they were ready to come find me. When they were there, they didn't find much, since I hadn't had my computer and most modding stuff there for a while, but I continued to have the orders sent there for security of the packages. They went in the house and woke everyone up and watched them get dressed and started going though everything that was in my old room, and the stuff I had in the garage. They took anything that was related to gaming. They opened all the mail I had waiting for me there (which included someone's Xbox and $150 for a mod and 400gb), and took all the consoles and all console parts that I had stored there they even took my original xbox1 games, that were in retail cases. They took my 360, power brick and video cable, while its modded with xtreme 5.1b, it has never had 1 single burned game booted on it. They also felt it necessary to take all my old Xbox parts, mostly dead, my controllers for the 360 and Wii (?) and packed it in a box, and left.

They got my phone number from my grandma and they called me, but I was sleeping, just like everyone else in Ohio. They eventually figured out where I was, and came to find me at my girlfriends' house. They asked me about modding and what I did, and how I did it. They showed me the list of modchips that they collected, and asked me if I ever imported modchips from Canada. I told them I did, but I didn't know it was a Canadian site until after I made the order. They asked me how much money I made, and how many mods I've done, and how many chips I still had, and where they were and where my computers were.

I wasn't forced to turn over my stuff since they didn't have a warrant for where it all was, but they told me that if I volunteered it, it would look better when the case is reviewed. They also said that I would have a better chance of getting it back (at first, they promised that I would get it back in 10 days, but once we got to the location, that was changed to "better chance" and "looks better in the eyes of XX". I did the only thing I felt I could do, I let them take what they wanted. We went to where I had my workshop area. They took my laptop, and desktop, and the soldering iron (which was one of their main things to find for some reason). All the chips and relative parts were taken on the recommendation of the computer forensics guy who was to be doing the analysis on my things.

In their defense, the ICE people who came to my girlfriends house were nice people, and they tried to help me make the right decision. I knew they were just doing their job, but I have been out of work since early may, and modding is the only thing that was keeping me above water with the bills. Now I can't mod, and I can't even sell anything off to pay for bills either since it has all been confiscated due to a ludicrous interpretation of the DCMA. Now it's all said and done, and I just have to wait for them to decide what I did wrong, but while I'm waiting, I have NOTHING of any worth anymore, other than a computer monitor, and my car. Because of what happened I'm not allowed to see my girlfriend and our 4 month old daughter, and last night, I slept in my car and my girlfriend sent me a text message telling me it felt like someone was taking me away from her. They took my life away. I would like to formally thank Microsoft and Nintendo for cracking down on the little guy with a soldering iron in his garage, rather than going after the people that are responsible for the bootlegs being available.

[ChadTower]

Oh man, that guys effed himself over thoroughly.  He admitted right to them what he was doing?

Get a lawyer, man.  Get a lawyer before you start talking.

[shardian]

Oh man, that guys effed himself over thoroughly.  He admitted right to them what he was doing?

Get a lawyer, man.  Get a lawyer before you start talking.

If they didn't read him his rights before asking him to tell them info, then his rights were violated and he can get off scott free. He BETTER at least get a public defender.

[Texasmame]

Sounds like you got lied to, bro... law enforcement doesn't go into people's homes, seize their goods, and not charge the person with anything.  It's either illegal to have them, and they get charged / good seized, or it's not illegal and they do nothing.

Untrue.

Charges can be brought after the search. 

[Texasmame]

That thought crossed my mind, but I highly doubt it.  His entire website is shutdown too. 

Of course it is shutdown... he's afraid to maintain the business.  Sending out those units is illegal, he knew it then but now he's afraid they'll come down on him.  So he closed up shop and kept whatever units he had in for service.  What he told you happened is an illegal seizure if no one was charged with anything.

Again, untrue.

[Texasmame]

Oh man, that guys effed himself over thoroughly.  He admitted right to them what he was doing?

Get a lawyer, man.  Get a lawyer before you start talking.

If they didn't read him his rights before asking him to tell them info, then his rights were violated and he can get off scott free. He BETTER at least get a public defender.

AGAIN, untrue.

This thread is funny.   

[ChadTower]

You're actually going to dispute that he shouldn't have admitted to the cops what he was doing, rather than having an attorney present?

sharidan, he only has to hear his rights if they arrest him.  But he should already know that talking to cops, if you're the suspect, is always lose-lose-lose.

[Green Giant]

Wow, this is getting ridiculous.  Sucks for the guy losing all his stuff, but will be interesting to see what happens if they tell him modifiying hardware is illegal.

You can't start claiming modding hardware to enable it to possibly steal something is illegal.  If this sneaks by an appellate court and possibly the supreme court, I will be shocked.  They will be able to raid anyone without probable cause saying their computer could be used to download movies since it has an internet connection.

I see this going nowhere at all.  Like the kid said, he has done nothing.  Go after people offering up the illegal games.

Think about the guys on this forum that have made racing cabs using a modded xbox.  If they own 10 racing games and made things simple with a modchip, what is the crime.  I wouldn't want to have to have access to the xbox to change a game if I was them.    No more mame on an xbox cab either. 

[Texasmame]

You're actually going to dispute that he shouldn't have admitted to the cops what he was doing, rather than having an attorney present?

sharidan, he only has to hear his rights if they arrest him.  But he should already know that talking to cops, if you're the suspect, is always lose-lose-lose.

In regards to that first question - that's neither right nor wrong, it's just a matter of opinion.

Also, Miranda doesn't come into play unless he is in custody (arrested) AND they are going to question him about things that pertain to the arrest.  Just because you're arrested doesn't mean you get Mirandized automatically.  That's just on T.V.   

[Texasmame]

Wow, this is getting ridiculous.  Sucks for the guy losing all his stuff, but will be interesting to see what happens if they tell him modifiying hardware is illegal.

You can't start claiming modding hardware to enable it to possibly steal something is illegal.  If this sneaks by an appellate court and possibly the supreme court, I will be shocked.  They will be able to raid anyone without probable cause saying their computer could be used to download movies since it has an internet connection.

I see this going nowhere at all.  Like the kid said, he has done nothing.  Go after people offering up the illegal games.

Think about the guys on this forum that have made racing cabs using a modded xbox.  If they own 10 racing games and made things simple with a modchip, what is the crime.  I wouldn't want to have to have access to the xbox to change a game if I was them.    No more mame on an xbox cab either. 

Well, if they can substantiate that he was advertising his services under the guise that they could be used for playing illegal copies of games, that could be problematic for him.  However, the bigger problem would be for him to prove that the modding services he did ALSO allowed for other, clearly legal, things to be done on the system - like homebrew.

If he can show that he didn't hype up the illegal aspects of his work to potential customers AND that his work could also be used for legitimate, legal purposes, he SHOULD be fine.  But you never know - it's all a crap shoot in the forked up legal system.  

[SNAAKE]

real question is, should I hide my xbox or what..I dont want anyone take that. I have my xbox live street fighter winning record there. SS rank and 90% win ratio..I wanna keep it for the sake of my ego

or we should burn our mame cabinets..before you know they will raid mame cabinet builders too. LOOK ! he is playing pacman without paying for like the 9000th time..GET HIM !!

[geomartin]

real question is, should I hide my xbox or what..I dont want anyone take that. I have my xbox live street fighter winning record there. SS rank and 90% win ratio..I wanna keep it for the sake of my ego

or we should burn our mame cabinets..before you know they will raid mame cabinet builders too. LOOK ! he is playing pacman without paying for like the 9000th time..GET HIM !!

Actually, this could become a real threat.  Microsoft and Nintendo are sure to point out that MAME is a threat to their classics available on their download services.  I could easily see them going after ROM burners.