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Writer's pictureStephen Wick

Three Sentenced for $88M Business Telephone Software Piracy Scheme

Jason M. Hines, 44, from Caldwell, New Jersey, was sentenced to one year and six months in prison, followed by 18 months of home confinement, and ordered to forfeit $2 million.

Three individuals have been sentenced for their roles in an international scheme involving the sale of tens of thousands of pirated business telephone system software licenses, with a total retail value exceeding $88 million.


Raymond Bradley “Brad” Pearce, 48, from Tuttle, Oklahoma, received a four-year prison sentence and was ordered to forfeit $4 million. His wife, Dusti O. Pearce, 46, also from Tuttle, was sentenced to one year and one day in prison and required to forfeit $4 million.


Jason M. Hines, 44, from Caldwell, New Jersey, was sentenced to one year and six months in prison, followed by 18 months of home confinement, and ordered to forfeit $2 million. The three defendants have also agreed to pay restitution, with amounts set at $17 million for Brad Pearce, $10 million for Dusti Pearce, and over $5 million for Hines. A separate court hearing will determine the specifics of the restitution order in the coming weeks.


Court documents reveal that Brad and Dusti Pearce conspired with Hines to commit wire fraud by generating and selling unauthorized Avaya Direct International (ADI) software licenses. These licenses were used to unlock features of the "IP Office" telephone system, which is utilized by thousands of companies worldwide. The ADI software licensing system has since been decommissioned.


Avaya Holdings Corporation, a California-based multinational business communications company, sold the IP Office system to many midsize and small businesses both in the U.S. and internationally. To access features such as voicemail and telephony, customers were required to purchase software licenses from authorized distributors.


Avaya implemented software license keys to protect its copyright and ensure that only paying customers could use its software. Each license also needed to be associated with a proprietary memory card that contained a unique serial number, which end users were required to retain for usage.



Brad Pearce, a long-time customer service employee at Avaya, used his system administrator privileges to generate tens of thousands of ADI software license keys that he sold to Hines and other customers, who in turn sold them to resellers and end users around the world. The retail value of each Avaya software license ranged from under $100 to thousands of dollars.


Brad Pearce also employed his system administrator privileges to hijack the accounts of former Avaya employees to generate additional ADI software license keys. Pearce concealed the fraud scheme for many years by using these privileges to alter information about the accounts, which helped hide his creation of unauthorized license keys. Dusti Pearce handled accounting for the 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 a de-authorized Avaya reseller. He bought ADI software license keys from Brad and Dusti Pearce and then sold them to resellers and end users around the world for significantly below the wholesale price. Hines was by far the Pearces’ largest customer and significantly influenced how the scheme operated. Hines was one of the biggest users of the ADI license system in the world.


Altogether, the Pearces and Hines reaped millions of dollars from the scheme. To hide the nature and source of the money, the Pearces funneled their illegal gains through a PayPal account created under a false name to multiple bank accounts, and then transferred the money to investment and bank accounts. They also purchased large quantities of gold bullion and other valuable items.


In July 2023, Hines pleaded guilty to conspiracy to commit wire fraud. In September 2023, the Pearces also pleaded guilty to conspiracy to commit wire fraud.




THANK YOU FOR YOUR TIME




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