For taking part in a large international scheme to earn millions of dollars by selling pirated business telephone system software licenses, a computer system admin and his spouse pled guilty.
Software licenses with a retail value of over $88 million are said to have been sold as a result of the whole operation.
The U.S. Department of Justice reported that in a scheme that involved creating and selling fake Avaya Direct International (ADI) software licenses, Brad Pearce, 48, and Dusti O.
Pearce, 45, of Tuttle, Oklahoma, allegedly teamed up with Jason M. Hines, aka Joe Brown, Chad Johnson, and Justin Albaum, 43, of Caldwell, New Jersey, to commit wire fraud.
The ADI software licenses were then used to unlock the capabilities of a popular telephone system used by thousands of businesses worldwide. Since then, the ADI software licensing system has been shut down.
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Avaya Holdings Corporation, a worldwide corporate communications firm headquartered in California, sold an IP Office product. This phone system is utilized by several midrange and small enterprises both domestically and internationally.
Customers had to buy software licenses from an authorized Avaya distributor or reseller to enable extra features of IP Office, such as voicemail or telephones, created by Avaya.
Avaya utilized software license keys to restrict access to its copyright-protected software and ensure that only customers who had paid for it could use it.
Long-time Avaya customer service employee Brad Pearce created tens of thousands of ADI software license keys using his system administrator rights, which he then sold to Hines and other clients, who then sold them to resellers and end users worldwide.
Each Avaya software license had a selling value that ranged from less than $100 to thousands of dollars. For the unlawful business, Dusti Pearce was in charge of accounting.
Hines, who purchased more than 55% of the stolen licenses, was by far the Pearces’ biggest client and had a big impact on how the program was run.
Additionally, Brad Pearce used his system administrator rights to access former Avaya workers’ accounts and steal their license keys for the ADI software.
“Furthermore, he used these privileges to alter information about the accounts to conceal the fact that he was generating ADI license keys, preventing Avaya from discovering the fraud scheme for many years,” DOJ said.
The Pearces moved their illicit profits from many bank accounts to numerous additional investment and bank accounts using a PayPal account that was established under a fictitious name to conceal the kind and source of the funds.
They also bought a lot of gold bullion and other expensive things.
Dusti and Brad Pearce admitted to conspiring to conduct wire fraud. The maximum sentence for both of them is 20 years in jail.
According to the plea deal, Brad and Dusti Pearce must give up a car, cash, gold, silver, rare coins, cryptocurrencies, and a money judgment of at least $4 million. They must also compensate their victims in full.
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