Insiders Sell $88m of Pirated Avaya Licenses

The Western District of Oklahoma has indicted three individuals for selling $88m of pirated Avaya licenses. 

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Avaya Direct International (ADI) software licenses were purportedly stolen and used to unlock telephone system features used by small and medium-sized businesses in the US and abroad.  

The grand jury charged three people with 13 counts of wire fraud and conspiracy to commit wire fraud, and two of the three received further charges of money laundering and conspiracy to commit money laundering.  

The United States Department of Justice, Office of Public Affairs, announced:

“Brad Pearce, a long-time customer service employee at Avaya, allegedly used his system administrator privileges to generate tens of millions of dollars 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 globe.  

“The retail value of each Avaya software license ranged from under $100 to thousands of dollars.  

“The Pearces and Hines’ operation not only prevented Avaya from making any money on its stolen intellectual property but also undercut the global market in Avaya ADI software licenses because the Pearces and Hines were selling licenses for significantly below the wholesale price.”  

Avaya’s ‘IP Office’ was at the centre of the piracy operation. In order to use IP Office functionality such as voicemail or other telephony services, customers were required to purchase software licenses, which were generated by resellers and distributors.  

As an Avaya employee, Brad Pearce had access to these licenses, which he is then alleged to have illegally sold. He is also alleged to have hacked the accounts of previous Avaya employees to gain furth license keys, as well as using his systems administration privileges to edit account information to hide his activities.  

Pearce was not supposedly acting alone. He is said to have colluded with Jason Hines, who helped mainly as a reseller of the stolen goods, and Pearce’s wife, Dusti Pearce, who is believed to have acted as an accountant for the illicit gains.  

The Department of Justice revealed: “Altogether, the Pearces and Hines allegedly reaped millions of dollars from the fraud.  

“Moreover, to hide the nature and source of the money, the Pearces allegedly funnelled their illegal gains through a PayPal account created under a false name to multiple bank accounts and then transferred the money to numerous other investment and bank accounts.  

“They also allegedly purchased large quantities of gold bullion and other valuable items. The indictment lists numerous assets subject to forfeiture including cash, gold, silver, collectable coins, cryptocurrency, and real property.”  

The FBI carried out the investigation. Although the three individuals have been officially indicted, their innocence is still presumed until a verdict has been reached.  

Avaya recently revealed it had raised $600m in funding to speed up its business model transformation.  

Avaya is a multinational technology company specialising in cloud communications and workstream collaboration solutions. The company offers UCaaS, CCaaS, and CPaaS services via its OneCloud platform.

 

 

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