Tuesday, April 16, 2024
Jersey business owner confesses to $88M software fraud.

Jersey business owner confesses to $88M software fraud.

Jersey business owner confesses to $88M software fraud. Listen to this article

A Caldwell Man Pleads Guilty to Participating in $88 Million Scheme

A Caldwell man pleaded guilty last week to participating in a massive, $88 million international scheme by selling pirated business telephone system software licenses.

The plea agreement was announced July 28 by the U.S. Attorney’s Office, Western District of Oklahoma, where the charges were filed in a June 2022 indictment. Jason Hines, 43, (aka Joe Brown aka Chad Johnson aka Justin Albaum) had been charged with two co-conspirators, Brad Pearce and Dusti Pearce, both of Tuttle, Okla., with multiple counts, including conspiracy to commit wire fraud and wire fraud.

The Unauthorized Avaya Direct International Software Licenses Scheme

Prosecutors say the scheme involved generating and then selling unauthorized Avaya Direct International (ADI) software licenses, which were used to unlock features of a popular telephone system used by thousands of companies around the globe. The licensing system has since been decommissioned.

“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 under his own name and also using an alias, Joe Brown, and then sold them to resellers and end users around the globe,” according to court documents released by prosecutors. “Brad Pearce, a long-time customer service employee at Avaya, allegedly used his system administrator privileges to generate those keys without authorization, creating tens of thousands of them that he sold to Hines and other customers. Brad Pearce’s wife, Dusti Pearce, is alleged to have handled accounting for the illegal business.

“Hines was by far the Pearce’s largest customer, buying over 55% of the stolen licenses, and significantly influenced how the scheme operated,” the documents continue. “In fact, Hines was one of the biggest users of the ADI license system in the world. As a result, Hines reaped millions of dollars from the fraud.”

Plea Agreement and Sentencing

Hines pleaded guilty to conspiring to commit wire fraud.

As part of the plea agreement, the Justice Department has agreed not to advocate for more than five years behind bars. Hines must also forfeit at least $2 million as well as make full restitution to his victims. The Justice Department said that a federal district court judge will determine any sentence after considering guidelines and other statutory factors. No sentencing date was announced.


ICYMI


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