Former Avaya employee gets 4 years for $88M license piracy scheme

Three individuals who orchestrated a massive software pirating operation involving the sale of Avaya business telephone system software licenses worth over $88,000,000 have been sentenced to prison.

The three men, Raymond Bradley "Brad" Pearce, Dusti O. Pearce, and Jason M. Hines, were also ordered to forfeit large amounts of money as part of their sentencing, ranging from $2 to $4 million.

The three men were indicted in Oklahoma in June 2022. U.S. Hines pleaded guilty in July 2023, while B. Pearce and D. O. Pearce pleaded guilty in September 2023.

"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," reads a Department of Justice announcement.

"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."

Pirating Avaya licenses

Avaya is an American technology company providing unified digital communications services to 220,000 customers across 190 countries.

The product at the epicenter of the pirate scheme was Avaya's IP Office business telephone system. This now-discontinued suite offered a range of features, including voicemail, conferencing, and call management.

Certain functions in IP Office were unlocked by purchasing specific licenses (ADI software licenses), typically distributed through authorized resellers to clients.

Brad Pearce, who was a customer service agent at Avaya, reportedly abused his admin privileges to generate thousands of ADI software licenses of varying values that could be used to unlock higher product tiers.

The announcement says B. Pearce also hijacked the accounts of former Avaya employees so he could generate additional licenses without getting detected.

Together with Dusti O. Pearce, who handled the accounting for the illegal operation, the two resold those licenses to Hines, the owner of Direct Business Services International (DBSI) and a former Avaya reseller (de-authorized at the time of the scheme).

The DOJ says Hines bought the ADI licenses and sold them to resellers and end users worldwide at much lower prices than their designated cost, causing massive losses for Avaya, estimated at $88,000,000.

The U.S. Department of Justice announced late last week that the three men received multi-year imprisonment sentences and were ordered to pay substantial restitution amounts.

Brad Pearce was sentenced to four years in prison and must forfeit $4 million. Dusti O. Pearce was sentenced to one year and a day in prison and must also forfeit $4 million. 

Hines was sentenced to one year and six months in prison, with an additional 18 months of home confinement, and must forfeit $2 million.