Avaya Software Pirates Running $88 Million Scheme Sentenced

Three individuals have been sentenced for their roles in a massive international scheme involving the sale of pirated Avaya business telephone system software licenses worth over $88 million.

Raymond Bradley “Brad” Pearce, 48, of Tuttle, Oklahoma, a former computer system administrator, received a four-year prison sentence and was ordered to forfeit $4 million. Dusti O. Pearce, 46, also from Tuttle, was sentenced to one year and a day in prison and required to forfeit $4 million. Jason M. Hines, 44, of Caldwell, New Jersey, was sentenced to one year and six months in prison, followed by an additional 18 months of home confinement, and ordered to forfeit $2 million. The three defendants are also required to pay restitution: $17 million for Brad Pearce, $10 million for Dusti Pearce, and over $5 million for Hines, with a separate restitution hearing set for the coming weeks to finalize these amounts.

The scheme, according to a U.S. DoJ announcement, involved the unauthorized generation and sale of Avaya Direct International (ADI) software licenses, which were used to unlock features of the “IP Office” telephone system product sold by Avaya Holdings Corporation, a California-based multinational business communications company. This product is widely used by midsize and small businesses globally. The ADI system, which has since been decommissioned, required customers to purchase software licenses from authorized Avaya distributors or resellers. Brad Pearce exploited his system administrator privileges at Avaya to generate and sell these licenses illicitly.

Avaya's IP Office system required specific software licenses to enable various features, with each license linked to a proprietary memory card with a unique serial number. Brad Pearce, leveraging his insider access, generated tens of thousands of ADI license keys, which he sold to Hines and other customers. These keys were then distributed to resellers and end users at prices significantly lower than the legitimate wholesale rates. Pearce also hijacked the accounts of former Avaya employees to create additional license keys, concealing his fraudulent activities by altering account information.

Dusti Pearce managed the accounting for the illegal operation, while Jason Hines, operating through his company Direct Business Services International (DBSI), formerly known as Dedicated Business Systems International, played a pivotal role as the primary buyer and distributor of the pirated licenses. DBSI, a New Jersey-based business communications systems provider, had been de-authorized by Avaya but continued to distribute the illicit licenses globally.

The fraudulent scheme allowed the Pearces and Hines to amass millions of dollars. To obscure their illicit gains, the Pearces funneled money through a PayPal account created under a false name, transferring funds to various bank and investment accounts, and purchasing large quantities of gold bullion and other valuable items.

The investigation was conducted by the FBI Oklahoma City Field Office. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Senior Litigation Counsel Julia E. Barry for the Western District of Oklahoma prosecuted the case. The sentences followed guilty pleas from Hines in July 2023 and the Pearces in September 2023, all for conspiracy to commit wire fraud.