Jan. 12, 2007— Sixteen-year-old Matthew Bandy was about as normal a teenager as you could find. He actually liked hanging out with his family.

"He was a happy-go-lucky kid," said his mother, Jeannie Bandy. "Very personable, and big-hearted. I sound like a boastful mom, but I guess the biggest thing is that he could always make me laugh."

"We went on vacations and had a lot of fun together," Matthew said. "I just enjoyed the life I was living. But after I was accused, everything changed."

What was Matthew Bandy accused of? Jeannie and Greg Bandy were shocked to discover that their son was charged with possession of child pornography.

One December morning two years ago, Matthew's life took a dramatic turn. In an exclusive interview with "20/20," the Bandy family reveals how the world as they knew it came crumbling down, and how Matthew's life has since changed.

A Family Shattered

It has been two years since police officers stood at the doorstep of the Bandy home with a search warrant bearing a devastating charge — possession of child pornography.

"It was 6 a.m. It was still dark…there was this pounding at the door," Jeannie Bandy said. "I was petrified."

Police officers stormed into the house with guns pointed. "The first thing I thought was, someone's trying to break in our house," Matthew said. "And then there [were] police officers with guns pointed at me, telling me to get downstairs."

Greg Bandy was handed the search warrant and informed that the central suspect was Matthew. According to the warrant, nine images of young girls in suggestive poses were found on the Bandy family computer. Yahoo monitors chat rooms for suspicious content and reported that child porn was uploaded from the computer at the Bandys' home address.

"When they asked me have you ever looked up or uploaded or downloaded erotic images of minors, I was just taken aback and…I said, 'No,'" says Matthew.

Nevertheless, Matthew did have an embarrassing confession. He had been sneaking peaks at adult erotic photos on the family computer. "I got the Web site from a bunch of friends at school. [It was] just adult pornography…Playboy-like images."

Difficult to admit, but not illegal — or so it seemed. Still, it didn't look good for Matt, as police confiscated the computer and left the house that December day. A family was shattered.

"I still remember when they were cleaning up and leaving and of course I was still in my pajamas and my bathrobe and my fuzzy slippers," Jeannie Bandy said. "I said, 'What do we do now? Should I contact a lawyer?' [The police officer] said, 'Well, they are felonies that the state takes very serious.'"

The Bandys would soon find out just how serious the charges against Matthew were. The family hired Ed Novak, a well-respected attorney from a large law firm in downtown Phoenix.

"20/20" correspondent Jim Avila asked Novak what the family was up against.

"We faced 10 years per count, there were nine counts," said Novak. "If Matt was convicted, those sentences would have to be served consecutively. In other words, he would have been sentenced to 90 years in prison. He would have served time until he died."

Greg and Jeannie Bandy knew their son well. They were shocked at the serious charges against him and frightened by the prospect of such a serious sentence.

"He's never done any drugs," Greg said. "He never drank a drop of alcohol. He's never been a problem, never stayed out late and gotten into trouble or anything like that."

A Sex Offender?

Arizona child pornography laws are among the harshest in the country. As soon as Matthew was charged, he was put on virtual house arrest, and an electronic bracelet was attached to his ankle to monitor his movements 24 hours a day.

"It was just terrifying. I didn't know what was going on. I didn't know why it was happening," Matthew recalled.

Matthew was in an awful predicament, and he tried to keep his house arrest a secret. He wore longer pants to hide the ankle bracelet, but he was scared he would be discovered.

"Yes, I was very scared," he said. "If they found out that I was wearing an ankle bracelet all of a sudden they would be wondering, why are you wearing that? And I had no good answer for them."

The shy young boy could not explain how such pictures appeared on his computer hard drive. The stress of the situation got so bad for Matthew that he told his parents the charges hanging over his head made high school impossible.

"He said 'Mom, I'm hurting,'" said Jeannie. "'I can't sleep. I don't want to disappoint anybody, but I just can't go on anymore.'"

Matt's dreams had been destroyed and his mother was crushed. And even though there was no proof that Matthew personally downloaded those nine pictures, it would be difficult to prove his innocence. Novak said that the pictures alone were practically all the evidence the police needed.

"I thought his chances of winning were probably 20 percent," said Novak. "They didn't care that I denied it," Matthew said. "They just kept on asking me and kept on thinking that I did it. They just had it built into their mind that this kid is guilty."

What is so frightening about Matt's case? It could happen to anyone.

"The computer had accessed a 'Yahoo' account where there was child pornography," Andrew Thomas, Maricopa County district attorney said. "That was the basis for the search warrants issued by a court."

Yet, the evidence submitted by the Phoenix police department did not identify a specific user. Matt's clean reputation, his good grades and protective family could not stand up to the cold fact that child porn was on that computer. The police and the district attorney had the incriminating photos from the Bandys' computer and the prosecutors were determined to send Matt away.

A Family Fights Back

Matthew Bandy found himself outmatched in the national campaign against child pornography — harsh laws designed to keep track of pedophiles and punish them severely.

"They didn't care that I denied it, they just kept on asking me and kept on thinking that I did it," he said. "They just had it built in their mind that this kid is guilty, and we're going to make sure that he's convicted. No matter what the means are."

The Bandy family contends that Thomas was on a mission and that his desire to convict was so strong that he ignored important evidence — like the fact that Matthew passed a lie detector test. The fact that the test indicated that Matt was telling the truth wasn't taken into account.

And that's when the Bandy family really began to fight back. They hired two polygraph examiners who confirmed Matthew was telling the truth. Then they ordered two psychiatric evaluations which concluded that Matthew had no perverted tendencies.

ABC's Jim Avila asked Thomas about the results of the lie detectors tests and Matt's psychiatric evaluations.

"Quite frankly, criminal defendants are not famous for being forthcoming with the facts," Thomas explained. "I'm not a big believer in polygraph tests. And certainly, they're not admissible in court. At the end of the day, we certainly felt there was a good faith reason to go forward with the prosecution." (Click here to read excerpts of Jim Avila's interview with Thomas.)

Despite the positive polygraphs and psychiatric exams, the district attorney pressed on. So the Bandys and their attorney tackled the most difficult question on the table. If Matthew didn't put the pictures on the computer, how did they get there?

For that answer, they turned to computer forensic expert Tammi Loehrs.

"If you have an Internet connection, high speed, through, let's say, your cable company, or through the phone company, that computer is always on, and basically you have an open doorway to the outside," Loehrs said. "So the home user has no idea who's coming into their computer."

Loehrs went into the Bandys' computer and what she found could frighten any parent — more than 200 infected files, so-called backdoors that allowed hackers to access the family computer from remote locations, no where near Matthew's house.

"They could be on your computer and you'd never know it," she said.

Loehrs says she does not believe that Matthew uploaded those images onto his computer "based on everything I know and everything I've seen on that hard drive." But police still had those pictures, and the harsh child porn laws made going to court risky for Matthew.

"All the jury would know is that there were these images on the computer," Matthew said. "And here's me sitting in the courtroom…let's blame him because he was on the computer, obviously he did it."

'We Had No Faith'

Even if he was only convicted on one count, Matthew would have faced 10 years in jail, and have his "life ruined," said Novak.

"We had no faith," said Jeannie Bandy. "Our lawyers had no faith. We were told he more than likely would end up in jail."

So the Bandys took a deal from the prosecution. In exchange for dropping all counts of child pornography, Matthew pleaded guilty to the strange charge of distributing obscene materials to minors — a "Playboy" magazine to his classmates.

"To be precise, he was charged with showing [a Playboy magazine to other 16-year-olds] before school, at lunch and after school," Greg Bandy said.

But the Bandy family nightmare was not over. While the prosecution deal offered no jail time for Matthew, he would still be labeled a sex offender. Under Arizona law and in most states around the country, sex crimes carry with them a life of branding. Matthew would be forced to register as a sex offender everywhere he lived, for the rest of his life.

"I have to stay away from children," said Matthew. "I cannot be around any area where there might be minors, including the mall, or the movies, or restaurants or even church. To go to church I have to have written consent from our priest, I have to sit in a different pew, one that doesn't have a child sitting in it."

'Computers Are Not Safe'

The judge couldn't believe the prosecution was insisting on sex offender status and invited Matthew to appeal. "20/20" was there when two years of fear and misery finally ended. A message arrived from the judge, ironically on the computer, informing them that Matthew would not be labeled a sex offender. Matt and his parents had won his life back.

In the den of the Bandy home sits the family computer, now unplugged from the Internet. The Bandys learned that, for them, the Web is simply too dangerous.

"It means that computers are not safe," said Jeannie. "I don't want to have one in my house. Under even under the strictest rules and the strictest security, your computer is vulnerable."