It is illegal to sell modchips in any form, although it's not illegal to buy them. However, 99.999% of the time, no one cares to enforce the laws, so mod chips are freely sold and installed at thousands of places.
Very similar to "Head Shops". They sell what amounts to drug paraphenalia, but sell it as "novelties" so as to get around the rules. Cops are busting down on them nowadays though. Sex toys are treated in much the same fashion in Texas. They must be distributed as "novelties", but many stores have just come out selling them as what they are. Which is illegal. But no one really cares.
This guy was busted because the DoJ didn't like his website because it facilitated the trading of pirated software. Plain and simple. The first thing they did was illegally seize his domain. It was the thing first and foremost on what they wanted to do. His site, and a few others like his (none of which I shall list here) have played an integral role in bringing warez from a very small closeknit group of guys who just cracked software to prove they could and shared is amongst themselves, to the huge thing that it is today where virtually everyone has a number of pieces of pirated software.
It is back up and running on a new domain name with a new provider, and Ricci is appealing his case and filing a countersuit on the illegal seizure as the website was hosted overseas and is illegal for the DoJ to seize.
But you can't charge someone with facilitating the trade of pirated software, so they had to nab him for something. So, as soon as he started selling modchips, they had something to nail him for. And what better example than hitting the webmaster, and stealing his website, of one of the most prolific facilitators in the warez scene.
I operate one of the main dumps that warez groups use to distribute their items, so I've been following the case pretty closely, as what I do is far more damning than what he does. Personally, it doesn't really bother me one bit that he was caught. Websites like his aren't thought of very highly amongst warez groups.
