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San Diego GOP chairman co-founded international piracy ring
Miriam Raftery
Published: Tuesday April 29, 2008

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Any job applicant knows that background checks are routine – especially for jobs involving authority or oversight of money. So why didn’t the San Diego Republican Party do a simple Google search before naming Tony Krvaric as its chairman?

Online research reveals that Krvaric is the co-founder of Fairlight, a band of software crackers which later evolved into an international video and software piracy group that law enforcement authorities say is among the world’s largest such crime rings. After co-founding Fairlight in Sweden, Krvaric established U.S. operations for the organization, including an arm headquartered in Southern California—a major center for the computer and video game industry.

Krvaric has also been appointed by California Republican Party Chairman Ron Nehring to head up the state party’s budget committee. RAW STORY's investigation reveals the California GOP has put an alleged pirate in charge of its treasure trove.

An e-mail sent anonymously this week to a conservative listserv operator in San Diego County revealed an attached document titled “The Secret Life of Tony Krvaric.” The attachment alleged that Krvaric, using the alias “Strider,” founded Fairlight “to illegally crack and distribute copyrighted software.” Fairlight evolved from “an adolescent obsession into a full fledged multinational criminal enterprise,” the e-mail claimed.

These allegations come as no surprise to RAW STORY, which has been researching Krvaric’s ties to Fairlight for some time.

Krvaric, alias Strider

Currently a financial consultant and licensed securities broker, Tony Krvaric was born in Sweden in 1971 to a family of Croatian immigrants. He arrived in the United States in 1992 on an H1B visa, wanting to leave Swedish social democracy. Krvaric had been known even in his teens as a conservative; his motto was "Kill A Commie For Your Mommie." In his official Republican party biography, Krvaric claims that he was inspired by the legacy of Ronald Reagan and criticized the European system for not providing an economic climate that would “encourage free enterprise and competition.”

Krvaric obtained American citizenship in 2003 and joined the Republican Party, which welcomed him as a refutation of "those claiming the GOP is non-accepting and non-inclusive of immigrants." He made a meteoric rise through Republican party ranks, taking the helm of San Diego’s GOP just three years later. Krvaric "credits the man he succeeds, Ron Nehring with teaching him much about the functions of the Republican Party.”

However, behind this old-fashioned success story lies another and more shadowy version of Krvaric's life, his time spent as a video game pirate sporting the alias "Strider." In 1987, Strider and two buddies, using the names "Black Shadow" and "Gollum" founded Fairlight, devoted to "cracking" the copy protection on video games for the Commodore 64 and other early systems and redistributing them to acquaintances through electronic bulletin boards.

The "warez d00dz" of that time competed at being the first to get their hands on newly released games. Strider, who worked in a game store and would "borrow" new games to take home and crack, was one of the very best. According to an interview that a website claims was published in Scandinavian News in the 1980s, he quickly became "one of the most famous persons in cracking-scene ever seen: STRIDER of FAIRLIGHT."

A list of Commodore 64 games cracked by Strider is posted at a database of C-64 computer information -- complete with his photo, recent biographical details, and first name: Tony, described as a “coder, cracker, importer and organizer” for Fairlight. The listing confirms that Strider has since become a financial consultant and Republican in San Diego, married with four children. His impressive list of “accomplishments” includes cracking games ranging from PacMan to Indiana Jones and the Temple of Doom. The site also lists Strider’s motto: "Kill a commie for your mommie."

This pirate site lists Strider’s accomplishments chronologically including all the games he cracked in his formative years. It identifies Strider as “Toni K. (No. 1)” residing at Hallstorpsv. 38a - 212 32 Malmoe – Sweden. It also lists numbers of people he apparently recruited into the cracking business.

Although game cracking was already seen by the Swedish police as illicit in the ‘80s, trading cracked software was not made explicitly illegal in Sweden until 1993. By then Kravic was in the United States, finding new entrepreneurial opportunities for Fairlight in connection with the United Software Association. According to a website that celebrates the scene, "Strider from the Amiga Fairlight joined up with the USA guys early on and USA basically became the Fairlight PC division with it's own identity and management staff."

Kravirc formed Fairlight PC to specialize in games for the new PC's, but by the end of 1992, a set of high-profile arrests for credit card fraud among his American associates apparently led Krvaric to exit the PC game business as well and into a new operation called FairLight Trading..

According to an archived Fairlight webpage, FairLight Trading was originally incorporated in Sweden in 1990. "For two years prior it operated as a sole proprietorship. As business grew, the need for incorporating was obvious. The decision to do so was made in the summer of 1990 when funding was obtained from additional investors. Business was mainly concentrated to computer parts such as microprocessors, simm modules and hard drives. A completely different facet also surfaced though; nonperishable foodstuffs. . . In January of 1993, FairLight Trading, Inc. was incorporated under the laws of the State of California as a wholly owned subsidiary. Soon thereafter all operations were run from our offices in San Diego."

However, even this new enterprise was operating in a legal grey area. According to a 1996 version of Krvaric's webpage, "We are a trading company engaged in wholesale of various goods. Among our current offerings are Super WildCard DX 32MBiT Super Nintento(tm) back-up units."

The Super Wildcard DX was a copier for Nintendo games, put out by a Hong Kong company as a backup system, but also used for illegal copying. That kind of circumvention device was made illegal by the Digital Millenium Copyright Act, which was already in the works by 1996, though not passed by Congress until October 1998. But by the end of 1997, Krvaric was apparently out of that business as well, and soon after obtained a Securities Broker license.

After Krvaric's apparent departure in 1992, FairLight PC was reconstituted by others and continued to carry on software piracy. In 2004, several members of the group were arrested in an international operation that involved police from eleven countries and led to 120 arrests.

Fairlight co-founder Bacchus (Pontus Berg) implicated Krvaric as still in charge of in charge of Fairlight PC and C64 activities in an interview published in 2004—shortly before international stings by law enforcement. “So I'm on my 15th year as a fairlighter and I'm seriously considering having the Amiga logo drawn by Angeldawn tattooed on my arm. Fairlight is now controlled by Strider, JBM and myself. Currently active sections are the C64 demo section and the PC demo section. The PC ISO section was put to sleep recently, but who know what the future might hold."

Krvaric responds privately

Tony Krvaric has never fully disavowed his piratical past.

Ever a buccaneer at heart, he even lists an e-mail address with his pirate nickname (strider@cts.com) at his business listing under Tony Krvaric with the San Diego County Businesses directory. Krvaric provided the e-mail address tkrvaric@fairlight.com in his League of Women Voters information materials when he ran for the San Diego Republican Party central committee in 2006. Running for reelection in 2008, Krvaric currently lists tkrvaric@fairlight.com with the Registrar of Voters.

Krvaric has not responded to multiple requests for comment. But in an email message sent to fellow Republican committee members last week, leaked to RAW STORY, he admitted swapping video files but asserted that the charges were part of a "hit piece."

"Apparently there’s a hit piece floating around on me, “exposing” my wild high school, teenage years where I was in a computer club where we swapped Commodore 64 games (similar to how kids swap mp3 music files these days)," he wrote Monday. "This was in the 80’s, on a computer that’s long since defunct!"

"1990 [sic] I graduated high school, grew up and started my own business, and then in 1992 I came to this country, continuing the same business (selling computer and video game chips and accessories as well as some nonperishable foodstuffs, taking over my father’s business for a while after he died in 1994) until I left that field when the profit margins became too thin to make any money – around 1997 or so," he added. "That’s when I became a financial consultant, which I remain to this day."

"I’m sure glad they didn’t look in to my elementary school years, as there’s some really embarrassing stuff that I did in 4th grade," he continued. "BTW, I also heard a rumor that another fellow committee member (who shall remain unnamed) once made a tape copy of his friend’s favorite vinyl record."

"I don’t know who is spreading this," he concluded, "but just wanted to let you know what’s going on out there. Likely it’s someone who wants us to take our eye off the ball in 2008, be it the democrats, labor or someone else. Either way, we’re not going to let them get away with it. Thanks for your leadership."

After moving to San Diego, Strider was asked in an interview if he had any regrets about his hacking days.

“No,” he replied.

Gaming is Big Business for California, nation

In his statement, Krvaric dismissed his game-swapping past as trivial. But for the fast-growing interactive entertainment industry in California as well as national and international law enforcement authorities, copyright violations and piracy are very big concerns.

In California, the computer and video game industry is a $1.7 billion business, employing 40% of the industry employment nationwide. California has more than 190 video game facilities, employing over 9,000 people directly and 25,000 indirectly, including industry giants such as Sony in San Diego. In 2006, the computer and video game industry added $3.8 billion to the U.S. GDP, the Entertainment Software Association reports (link).

Reducing software piracy could create hundreds of thousands of new jobs, billions in information technology (IT) spending and economic growth, and new tax revenues to support local services worldwide, according to "The Economic Benefits of Lowering PC Software Piracy," a 2008 study commissioned by the Business Software Alliance (BSA) and conducted independently by International Data Corporation (IDC) (pdf link).

In March, U.S. Attorney General Michael Mukasey met with software and entertainment industry executives in California, warning that huge profits generated from intellectual property crimes including piracy are fostering terrorism: "Criminal syndicates, and in some cases even terrorist groups, view IP crime as a lucrative business and see it as a low-risk way to fund other activities. A primary goal of our IP enforcement mission is to show these criminals that they're wrong."

Video and computer gaming sales "definitely" contribute significantly to the economy of San Diego County, according to Wanda Meloni, president of DFC (David F Cole Intelligence), a market research firm in San Diego that tracks the gaming industry. Sony, Midway, and High Moon Studios (owned by Vivendi, which recently merged with Activision) all have operations here, she noted.

Asked whether piracy is a serious issue for San Diego based gaming manufactures, she replied, "Piracy is a big concern when you are talking about retail products. All of these companies are selling their products internationally."

The lowdown on Fairlight

According to the Center for Digital Government, an international advisory group, after Krvaric’s reported departure from Fairlight PC, Fairlight grew to become one of the “most notorious online piracy release groups in the world,” specializing in “the illegal distribution of computer games, including PC and console games.”

An article at DVD Recordable in 2004 described Fairlight as “the most sophisticated criminal syndicates on the planet, trading in a commodity worth hundreds of millions of pounds…They are part of the highly secretive 'warez scene' - an online community of hi-tech criminals responsible for pirating 90 per cent of the world's music, computer software and DVD movies.”

Globally, piracy is big business. Pirated PC software approached $50 billion in value in 2005, according to a study by the Business Software Alliance.

“These groups are the tip of the iceberg, if you think of software piracy as a pyramid,” said John Wolfe, spokesperson for the Business Software Alliance. “It’s the release groups like Drink or Die, like Fairlight, whose sold purpose in life is to get hold of preferably new releases…and get it out over the Internet…If someone wants to join a group they may charge them money.”

Asked if he would trust his finances to an individual with an alleged background in cracking and pirating products, he replied, “If I knew that someone was guilty of something or involved in federal crimes in the past, I clearly would be uncomfortable with that…If someone has never been convicted of a crime? I’m not sure.”

In 2003, three men pled guilty to felony conspiracy to commit copyright infringement in the U.S. – including Seth Kleinberg of Pasadena, who admitted that he was a senior member of Fairlight and Kalisto. Using the online nickname "Basilisk," Kleinberg supplied those groups with new software titles, assisted in the "cracking" process and served as a courier to distribute pirated products to servers around the globe.

Those busts, made under Operation Higher Education, were part of six U.S. convictions made under a global law enforcement effort known as Operation Fastlink, which has resulted in 50 convictions worldwide and 120 searches in 12 countries including Belgium, Denmark, France, Germany, Hungary, Israel, the Netherlands, Singapore, Spain, Sweden, the United States, Great Britain and Northern Ireland. In addition, the sting operations have netted over $50 million in illegally copied software, games, movies and music.

A 2004 article in the Guardian revealed that “last summer several key members of Fairlight said that they were going into retirement because the FBI was closing in on them. In 2004, Operation Fastlink raids seized several computers in San Diego, but no arrests were made.

As law enforcement closed in, a post signed by the “Fairlight Team” at a Commodore 64 gamers site stated that it was now time for Fairlight to close its doors for good. But a subsequent post signed by "Bacchus, Fairlight Council Spokesperson," warned, “Until you see a statement by Strider, JBM or Bacchus declaring our death, don’t believe what you read. And perhaps you shouldn’t anyway, as both Strider and myself have ensured that there is a new generation of Fairlighters ready to take over from their fathers when that day comes. Remember that legends never die!"

Despite Krvaric’s long ties to Fairlight and continued use of tkrvaric@fairlight.com, however, the website www.fairlight.com today has no company information or product descriptions listed, but merely a notice that “This website is coming soon.”

Raw Story Research Director Muriel Kane contributed to this report.

PART TWO, WHICH WILL INCLUDE REACTIONS FROM SAN DIEGO REPUBLICANS, WILL RUN WEDNESDAY

 
 


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