A New Jersey business owner has pleaded guilty to his role in a massive international scheme involving pirated business telephone system software licenses. The scheme allegedly netted millions of dollars from sales of unauthorized software licenses, valued at a retail price of over $88 million.
According to court documents, Jason M. Hines, 43, of Caldwell, New Jersey, also known by multiple aliases, participated in a wire fraud conspiracy alongside co-defendants Brad Pearce and Dusti Pearce, who collectively used the pseudonym “Terri Jenkins”. The trio illicitly generated and sold unauthorized Avaya Direct International (ADI) software licenses, which unlocked features of a widely-used telephone system by thousands of companies around the globe. The software licensing system in question has since been discontinued.
Avaya Holdings Corporation, a multinational business communications company, marketed an IP Office product, a telephone system utilized by numerous small to mid-sized businesses both domestically and internationally. This system required customers to purchase Avaya-generated software licenses from authorized distributors or resellers to access additional functionality, such as voicemail or telephones.
Hines, operating through Direct Business Services International (DBSI), a de-authorized Avaya reseller previously known as Dedicated Business Systems International, purchased these unauthorized ADI software license keys from the Pearces and sold them to global resellers and end users.
Brad Pearce, a former customer service employee at Avaya, allegedly abused his system administrator privileges to generate these keys without authorization. His wife, Dusti Pearce, is suspected of having managed the accounting for their illegal operation. Hines, the couple’s largest customer, significantly influenced the operation and profited immensely from the fraud.
Having pleaded guilty to conspiracy to commit wire fraud, Hines now awaits sentencing. As part of his plea agreement, the U.S. has agreed not to advocate for a prison term exceeding five years. Additionally, Hines must forfeit a minimum of $2 million and make full restitution to his victims.
This high-profile case sends a clear warning to small businesses about the serious implications of software piracy. Not only does it highlight the stringent measures taken to protect intellectual property rights, but it also underscores the financial and legal risks involved in engaging in such illicit activities. The outcome of this case may lead to a broader understanding among small business owners about the importance of buying and selling only authorized software and licenses.
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The FBI is investigating the case. The prosecution is led by Assistant U.S. Attorneys Julia E. Barry and William Farrior for the Western District of Oklahoma and Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section.