Former Avaya employee Brad Pearce abused his administrator rights to generate tens of thousands of software licenses and sell them illegally at significantly lower prices.

Three individuals from the United States were convicted of illegally selling tens of thousands of pirated business phone system software licenses valued at $88 million. The Avaya licenses were illegally generated and resold at significantly lower prices through the administrator account of Brad Pearce, who was still employed by Avaya customer service at the time. This resulted in an estimated loss of $88 million for Avaya, but filled the bank account of Pearce and his employees with millions of dollars.

Now the three people involved are on trial for the illegal practices and will receive a prison sentence and damages of up to four million dollars, according to a statement from the US Department of Justice.

Illegal activities

The product at the heart of the illegal practices was “IP Office” from Avaya, a multinational business communications company. IP Office was a telephone system product for voicemail and call management, among other things, that could only be activated with the software license from Avaya, Avaya Direct International (ADI).

Court documents show that former Avaya employee Brad Pearce abused his administrative privileges to generate tens of thousands of ADI software licenses. He conspired with Dusti Pearce, who assumed the role of accountant, and with Hines, the owner of Direct Business Services International (DBSI) and a former Avaya reseller (who subsequently had his authorization revoked).

According to the announcement, Hines sold the ADI licenses to resellers and end users around the world at significantly lower prices, resulting in huge losses for Avaya, while the three men earned millions of dollars from their scheme.

Prison sentence

Last week, the U.S. Department of Justice announced that the three men face several years in prison and may have to pay up to $4 million in damages.

Brad Pearce received a four-year prison sentence and must pay $4 million in restitution. Dusti O. Pearce served a year and one day in prison and must also pay $4 million. Finally, Hines received a prison sentence of one year and six months, plus a further eighteen months of house arrest and $2 million in restitution.