Paul LaBarre and Ernest McKay, principals of a former Mesa-based cable company, have each been sentenced to five years' probation for selling pilfered DirecTV signals.
The criminal convictions and sentencing, which included six-figure restitution orders, follow a 2010 judgment in a civil lawsuit requiring the two men and several co-defendants to pay DirecTV $400,000 for the scam.
Eagle West Communications of Mesa, no longer in business, once served customers from Williams to Cave Creek. But when the company ran into financial trouble in the mid-2000s, McKay and LaBarre concocted a scheme to pipe DirecTV's signal, obtained fraudulently, to homes and businesses who had cable subscriptions.
Dozens of bars, hotels, and residents across Arizona received unauthorized DirecTV programming in return for their monthly payments to Eagle West.
The scheme began when Eagle West set up a deal with DirecTV to provide service to customers for a subsidiary company called Hotel Movie Network. DirecTV provided McKay and LaBarre with access to a Satellite Master Antenna Television system, which allows DirecTV's signal to be fed to a hotel or apartment complex, then split off to the individual TV watchers.
McKay, LaBarre, and their cohorts hijacked that master signal and fed it to their own cable-TV customers.
Had any Eagle West employees contacted the cable-TV programmers, they and the programmers would probably have realized immediately that some customers were, in fact, getting DirecTV. LaBarre told his employees that if they ever contacted cable programmers directly, they would be fired.
In February 2009, the company's customers saw their TVs go dark when the FBI raided the offices of Eagle West and Indevideo, another former Mesa company with ties to Eagle West that was accused in the fraud.
McKay, who was sentenced in late May, paid $175,000 in restitution to DirecTV as part of the criminal conviction. He had pleaded guilty to one count of unauthorized use of a satellite communications.
Reached at his Mesa home today, McKay says he had to sell his former home to pay the restitution.
In an embarrassing irony, McKay's currently featured in the Mormon Church's "I'm a Mormon" Internet ad campaign. He lives his faith by "trying to give service to my fellow man," he writes. Of course, giving service is exactly what got him in trouble.
He seems to provide the ad's readers with a veiled reference to his legal troubles: "I don't know that I am the best example of the gospel of Jesus Christ, but I hope that I can one day stand in his presence and know his grace is sufficient."
LaBarre, who had also pleaded guilty to the same criminal count as McKay and was sentenced on Wednesday, owes more than $157,000 in restitution. He's agreed to pay $1,000 a month.
Despite his legal woes, LaBarre, who lives in Gilbert, continued in the digital entertainment industry after his 2009 indictment.
He's CEO of a penny-stock company, B2Digital, which appears on life support with its disconnected Mesa phone number.
Paul LaBarre called us back on Thursday evening and said B2Digital is still viable, and that the website hadn't been updated since the phone number was changed.
Last year, the company touted the appointment of entrepreneur Rodney Hunt as chairman. The new job couldn't stop Hunt's $23 million D.C.-area mansion from foreclosure, though.
LaBarre, 68, said he doesn't feel he didn't anything criminal, and that the debacle was really a civil matter and contract dispute that escalated because DirecTV "wanted its pound of flesh."
He signed the plea agreement mainly because he didn't want to take the chance of losing in trial and being sent to prison, he says.
DirecTV's spokesman, Robert Mercer, gave us this comment from the company about the sentencings:
"The sentences in this case are an acute reminder that unauthorized use of a satellite signal is a serious matter that has consequences under both civil and criminal law. We remain committed to using all available resources and legal remedies to eliminate piracy and protect our signal, our customers and programming partners from this illegal activity."
