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L.A. Game Store Owner Pleads Guilty to Hacking Xboxes

A co-owner of a Hollywood video game store that caters to celebrity clients on Wednesday pleaded guilty to participating in a conspiracy to violate federal copyright laws by selling Xbox video game consoles modified to play pirated games.

Jason Jones, a co-owner of ACME Game Store, entered a guilty plea in federal court in Los Angeles. His business partner, Jonathan Bryant, has signed a plea agreement and is scheduled to plead guilty to a conspiracy count on Monday, prosecutors said.

Jones pleaded guilty, and Bryant agreed to plead guilty, to one felony count of conspiring to traffic in a technology used to circumvent a copyright protection system, conspiring to infringe on a valid copyright for financial gain, and willfully infringing a copyrighted work by reproducing and distributing pirated works worth more than $1,000.

Jones, reached at the Electronic Entertainment Expo (E3), said he does not know how to modify an Xbox and that he pleaded guilty to the broad set of charges in order to reach an agreement with prosecutors.

"I don't know how to modify a f—-ing Xbox," Jones said.

He added that performing such modifications requires significant training and that the prevalence of such tampering has not reached epidemic proportions.

A third defendant, Pei "Patrick" Cai — who allegedly made the modifications to Microsoft Corp.'s (MSFT) original video game console to allow users to copy rented or borrowed games onto the console for future play — has missed his court appearances and the government considers him a fugitive.

Cai is charged with conspiracy, two felony violations of the Digital Millennium Copyright Act — which prohibits trafficking in technology designed to circumvent digital copyright protection technology — copyright infringement and copyright infringement for profit.

Prosecutors said the defendants, who reportedly count stars such as actor David Arquette and rapper Snoop Dogg among the people who have visited their fashionable Melrose Avenue store, sold the modified consoles for $225 to $500.

Pricing depended on the extent of the modifications and the number of games preloaded to the hard drive.

"We're like the Heidi Fleiss of video games," said Jones, referring to the famed "Hollywood Madam."

He added that his supporters have stood by throughout the ordeal and that he plans to open a bigger, better store in another Los Angeles location.

"Overall, its been good ... provided we don't go to jail," said Jones, who is scheduled for sentencing on August 7.

He faces a maximum sentence of five years in federal prison and a fine of $250,000, or twice the gross gain or gross loss resulting from the offense.