Three individuals have been sentenced for participating in an international scheme involving the sale of tens of thousands of pirated business telephone system software licenses with a retail value of over $88 million.
Raymond Bradley “Brad” Pearce, 48, of Tuttle, Oklahoma, a computer system administrator, was sentenced yesterday to four years in prison and ordered to forfeit $4 million. In June, Dusti O. Pearce, 46, also of Tuttle, was sentenced to one year and a day in prison and ordered to forfeit $4 million. In July, Jason M. Hines, 44, of Caldwell, New Jersey, was sentenced to one year and six months in prison and an additional 18 months of home confinement and ordered to forfeit $2 million. Additionally, the three defendants have agreed to pay restitution—specifically $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.
According to court documents, Brad and Dusti Pearce conspired with Hines to commit wire fraud in a scheme that involved generating and then selling unauthorized Avaya Direct International (ADI) software licenses. The ADI software licenses were used to unlock features and functionalities of a popular telephone system product called “IP Office” used by thousands of companies around the world. The ADI software licensing system has since been decommissioned.
Avaya Holdings Corporation sold IP Office to many midsize and small businesses in the United States and abroad. To unlock features such as voicemail or telephones on IP Office systems, 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 its copyright-protected software and ensure that only paying customers could use it. Each software license had to be associated with a proprietary memory card with a unique serial number that the end user had to keep in possession.
Brad Pearce used his system administrator privileges at Avaya to generate tens of thousands of ADI software license keys that he sold to Hines and other customers who then resold them globally at significantly below wholesale prices. He also hijacked accounts of former Avaya employees using his privileges to generate additional ADI software license keys while concealing his activities by altering account information. Dusti Pearce managed accounting for their illegal business.
Hines operated Direct Business Services International (DBSI), formerly known as Dedicated Business Systems International—a New Jersey-based business communications systems provider—and bought ADI software license keys from Brad and Dusti Pearce before reselling them worldwide at discounted rates.
Altogether, the Pearces and Hines profited millions from their scheme by funneling illegal gains through various bank accounts under false names into investment accounts while purchasing gold bullion among other valuables.
In July 2023, Hines pleaded guilty to conspiracy to commit wire fraud; in September 2023 both Brad and Dusti Pearce did likewise.
Principal Deputy Assistant Attorney General Nicole M. Argentieri; U.S. Attorney Robert J. Troester for the Western District of Oklahoma; Acting Special Agent in Charge Jason Kaplan of the FBI Oklahoma City Field Office made the announcement.
The FBI Oklahoma City Field Office investigated this case.
Senior Counsel Matthew A. Lamberti from the Criminal Division’s Computer Crime & Intellectual Property Section along with Senior Litigation Counsel Julia E Barry prosecuted this case.
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