Sysadmin and spouse admit to part in 'massive' pirated Avaya licenses scam
- Reference: 1695212227
- News link: https://www.theregister.co.uk/2023/09/20/avaya_guilty_pleas/
- Source link:
Brad and Dusti Pearce admitted one count of conspiracy to commit wire fraud and each face a maximum penalty of 20 years in prison. After agreeing to a plea deal, the Pearces must also forfeit at least $4 million as well as gold, silver, collectible coins, cryptocurrency, and a vehicle, and "make full restitution to their victims," the US Department of Justice said.
The pair from Tuttle, Oklahoma – a city better known for its [1]cattle ranchers and alfafa hay than pirated software – were alleged to have sold pirated Avaya business telephone system software licenses.
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The licenses were then used to unlock features of the popular telephone system, which is used by thousands of companies around the globe. Dusti Pearce was said by prosecutors to have looked after the accounting side of the business, although only the wire fraud charge remains under the plea deal.
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Brad Pearce had previously worked as a customer service employee at Avaya, and was said to have used his admin privileges to "generate tens of thousands of ADI software license keys" that he sold to his main customer, Jason Hines, as well as "other customers, who in turn sold them to resellers and end users around the globe," [5]said the DoJ.
Hines, an Avaya reseller from Caldwell, New Jersey, was the Pearces' biggest client, say the feds, buying over 55 percent of the stolen licenses – and "significantly influenced how the scheme operated." Hines ran Direct Business Services International (DBSI), a de-authorized Avaya reseller, in New Jersey.
[6]Avaya reseller pleads guilty to role in $88m licensing scam
[7]Legacy comms outfit Avaya returns to Chapter 11 bankruptcy protection
[8]Critical vulnerabilities found in 'millions of Aruba and Avaya switches'
[9]Press 2 to make a bid: Troubled biz comms beast Avaya confirms fire sale
[10]Hines pleaded guilty to conspiring with the Pearces back in July this year, as we [11]reported at the time.
The DoJ claims Hines suggested he and Brad Pearce work together to "corner" the market in licenses – with Pearce supposedly telling Hines that customers could not obtain same-day ADI software licenses "from anyone else for anything even close to the Pearces' prices."
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The Pearces are said to have funneled their ill-gotten gains through PayPal (under a false name) to multiple bank accounts, after which they transferred the money to numerous other accounts as well as buying "large quantities of gold bullion and other valuable items."
The FBI is still investigating some aspects of the case.
As we mentioned earlier this year, Avaya [13]filed for Chapter 11 bankruptcy protection in February, but it emerged in May [14]with a new board following a restructure, after which it [15]hired more C-suite execs and inked a [16]deal with purchasing consortium Sourcewell. ®
Get our [17]Tech Resources
[1] https://www.okhistory.org/publications/enc/entry?entry=TU026
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZQsXIxIqrvBbRSrG232CxgAAAAc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQsXIxIqrvBbRSrG232CxgAAAAc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZQsXIxIqrvBbRSrG232CxgAAAAc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.justice.gov/opa/pr/computer-system-administrator-and-spouse-plead-guilty-massive-scheme-sell-pirated-business
[6] https://www.theregister.com/2023/07/31/avaya_reseller_licence_scam/
[7] https://www.theregister.com/2023/02/15/avaya_back_in_chapter_11/
[8] https://www.theregister.com/2022/05/03/aruba_avaya_critical_vulns/
[9] https://www.theregister.com/2019/05/10/avaya_confirms_fire_sale/
[10] https://www.justice.gov/opa/pr/business-owner-pleads-guilty-massive-international-scheme-sell-pirated-business-telephone
[11] https://www.theregister.com/2023/07/31/avaya_reseller_licence_scam/
[12] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/cybercrime&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZQsXIxIqrvBbRSrG232CxgAAAAc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[13] https://www.theregister.com/2023/02/15/avaya_back_in_chapter_11/
[14] https://www.businesswire.com/news/home/20230430005027/en/Market-Leading-Customer-Experience-Company-Avaya-Enters-Next-Chapter-of-Accelerated-Growth-and-Innovation
[15] https://www.businesswire.com/news/home/20230616992612/en/Avaya-Bolsters-C-Suite-to-Accelerate-Business-Transformation
[16] https://www.businesswire.com/news/home/20230807397726/en/Avaya-Awarded-Unified-Communications-and-Contact-Center-Contract-with-Sourcewell-One-of-the-Leading-Purchasing-Consortiums-in-North-America
[17] https://whitepapers.theregister.com/
Similarity to "BMW's pay-as-you-toast subscription failure" article in The Register?
This account of a "pirated Avaya licenses scam" appears to concern providing means to unlock features in software already in a customer's possession. The underlying issue seems similar to that reported in the article linked to below.
https://www.theregister.com/2023/09/18/opinion_column/?td=rt-3a
The matter generalises further into vendor attempts to restrict access to controlling software in agricultural machinery, and yet more into the territory of repairing or reconfiguring devices such as mobile phones.
With respect to software, it may be argued that any bundled with a device (or telephony system) falls in its entirety into the customer's hands to use with the device as he wishes. If full functionality requires 'unlocking' with a code, rather than installation of additional software, then a customer devising means to unlock or paying somebody else to do so is responding sensibly to a rigged market.
Re: Similarity to "BMW's pay-as-you-toast subscription failure" article in The Register?
Then vote with your feet and go to a manufacturer that doesn't play that game, don't just break the law anyway.
We're talking about telephony, something you need ZERO licences for, can host entirely in-house, can use pretty much any handset you like, etc.
The providers at my previous employer are still annoyed from years back that I moved everything to VoIP and denied their annual demand for payment for physical lines. (They were also singularly unable to demonstrate a single working SIP line to us, after much faffing and blaming our firewall, whereas a competitor did so almost immediately with no firewall changes required).
Then they started getting shirty about internal telephony, so I put in Asterisk on cheaper, better handsets, no ties, and joined to the same SIP trunk provider. Cut them out of the picture enormously.
I've also seen people RENTING telephony including cloud control and Yealink handsets... yes, renting a £25 handset. With monthly charge, minimum terms, completely reliant on their platform (which provides no way to export any of the setup, etc.) and without significant control without having to get someone else to make changes for you. The first monthly charge alone would have paid for the handset outright.
Like the BMW story of selling "heated-seats unlock codes" - if you don't want that to happen, don't GIVE THEM MONEY and then illegal unlock your BMW and risk further problems down the line.... just don't buy one, don't buy that add-on, or complain to BMW and let it be known. Because people did exactly that and now... BMW have backtracked, as reported only the other day on The Reg.
Unlike hardware
There is no physical difference* with license-enabled features in software, and I am happy to pay less for a package when I don't need the more advanced features that the IP-holder has paid to develop and needs to maintain and support - especially when I can just buy an upgrade if I later find I need those features.
* apart from it using a bit more disk space.
"popular telephone system"
Maybe with users (I have no evidence either way), but as someone who developed against the API, I hated its poor documentation, design, and being tied to Windows.
The infamous Tuttle!
Previously known only for making the headlines for https://www.theregister.com/2006/03/27/tuttle_email/