From your link:
Frederick Brown 'had allegedly built up a thriving business selling counterfeit games and installing mod chips, having advertised his services on Craigslist and other web sites. He allegedly sold pirated games from his Vista, CA residence as well, including both discs and hard drives preloaded with games that he would install into customers' Xboxes and Xbox 360s.
That's absolutely nothing like what is being done in the article. This guy is modding the hardware to make the ps3 portable, the guy in your link was putting mod chips in the 360's so people could play pirated games, which he also sold. Just because the word "mod" is used in both stories doesn't make them similar.