Avaya reseller pleads guilty to role in $88m licensing scam

Comms vendor's employee allegedly generated bogus licences and hijacked sysadmin accounts to make more

A New Jersey man has plead guilty to selling pirated Avaya software licenses, allegedly generated and shopped by one of the vendor's system administrators.

News of the plea came from the US Department of Justice, which last Friday identified Jason M. Hines – aka Joe Brown, aka Chad Johnson, aka Justin Albaum – as the operator of an outfit called Direct Business Services International (DBSI) that was an authorized Avaya partner.

Hines was not a very good partner, though. The DoJ alleged that he bought a surfeit of Avaya Direct International (ADI) license keys from a chap named Brad Pearce, whom the agency described as "a long-time customer service employee at Avaya [who] allegedly used his system administrator privileges to generate those keys without authorization, creating tens of thousands of them that he sold to Hines and other customers."

Pearce also allegedly used his sysadmin privileges to hijack the accounts of former Avaya employees so he could generate even more dodgy license keys. His sysadmin sign-on allowed him "to alter information about the accounts to conceal the fact that he was generating ADI license keys, preventing Avaya from discovering the fraud scheme for many years."

Hines was Pearce's top customer and acquired 55 percent of the licenses the Avaya employee shopped. The total retail value of dodgy licenses Pearce generated topped $88 million, meaning the rotten reseller Hines profited to the tune of millions.

Pearce's wife, Dusti, kept books for their shady software. She and Brad were charged with conspiracy to commit money laundering as well as actual money laundering.

A reminder: Avaya sought bankruptcy protection in February 2023 (after escaping it in 2017), then emerged from a period of restructuring in May with a new board and a balance sheet that execs asserted set it up for future growth.

The DoJ's announcement reveals that Hines copped to a wire fraud charge under a plea agreement that will see the Feds agree not to advocate for more than five years in prison. Hines will, however, have to pay at least $2 million as well and make full restitution to his victims. A federal district court judge will determine any sentence after consideration of the sentencing guidelines and other statutory factors. ®

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