Three people have been sentenced as part of an $88M pirated business telephone software license case.
The three individuals involved in the case, Raymond Bradley “Brad” Pearce, Dusti O. Pearce, and Jason M. Hines, have all been given custodial sentences.
The FBI Oklahoma City Field Office investigated the case. The Justice Department report also stated Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Senior Litigation Counsel Julia E. Barry for the Western District of Oklahoma prosecuted the case.
Three people sentenced in business telephone license case
According to court documents, the three individuals committed wire fraud by procuring and selling unauthorized Avaya Direct International (ADI) software licenses. This was more commonly known as an “IP Office” license to operate a purchasable communications service.
Many well-known companies across the country use these licenses, which have been discontinued due to the sentencing and court action.
The company at the core of the court action was Avaya Holdings Corporation. It maintained a steady roll of customers domestically and internationally. Most companies were small to mid-sized entities that bought the IP Office product.
According to the report, to use the product’s features, “such as voicemail or telephones, customers had to purchase software licenses generated by Avaya from an authorized Avaya distributor or reseller. Avaya used software license keys to control access to Avaya’s copyright-protected software and to ensure that only customers who paid for the software could use it.”
Avaya generated an ID key to ensure there was a measure of control and that the paid service remained intact. This would be stored on a proprietary memory card with a serial number unique to the end user.
Brad Pearce had bespoke access to code generation, and the court heard that he created thousands of keys. Then, he sold them to Hines and other individuals to make a profit and ensure a steady stream of codes; he hijacked the accounts of other Avaya employees.
Hines owned and controlled Direct Business Services International (DBSI), based in New Jersey. Hines gained millions in resales of the illegally created codes for telecommunications services.
As a trifecta, the Pearces and Hines made millions and traded the ill-gotten gains via bank accounts and a shell PayPal. They also made physical purchases like gold bullion to convert the illegally gained cash.
Raymond Bradley “Brad” Pearce was given four years in prison and ordered to forfeit $4 million. Dusti O. Pearce was sentenced to one year in prison and forced to forfeit $4 million. Hines was sentenced to one year, six months in prison, and an additional 18 months of home confinement and ordered to forfeit $2 million.
According to the report, all three individuals have agreed to pay “$17 million for Brad Pearce, $10 million for Dusti Pearce, and more than $5 million for Hines. The court will hold a separate restitution hearing in a few weeks to determine the details of the restitution order.”
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