Former Avaya system administrator Raymond “Brad” Pearce was sentenced to four years in federal prison for his role in a scheme to generate and resell unauthorized software license keys for Avaya IP Office phone systems. The Department of Justice (DOJ) valued the licenses sold at more than $88 million, a retail-value estimate—not a measure of the defendants’ personal proceeds.
How the Avaya license scheme worked
Avaya IP Office is a business telephone system used by small and midsize organizations. Customers needed software licenses generated through Avaya’s licensing system to enable features such as voicemail and additional telephones. The licenses were tied to proprietary Avaya Secure Digital (SD) cards with unique serial numbers kept by the end user.
| # | Preview | Product | Price | |
|---|---|---|---|---|
| 1 |
|
Avaya J179 SIP IP Desk Phone POE (Power Supply Not Included) | $145.00 | Buy on Amazon |
| 2 |
|
Avaya 9508 Digital Phone - 700504842 | $98.00 | Buy on Amazon |
| 3 |
|
Avaya Partner 18D Telephone Black | $99.00 | Buy on Amazon |
| 4 |
|
Avaya 1408 Digital Telephone | $102.00 | Buy on Amazon |
| 5 |
|
Avaya Partner 18D Euro Set – Black, , Six Month Warranty (Renewed) | $59.95 | Buy on Amazon |
According to the DOJ’s July 2024 sentencing announcement, Pearce used administrator privileges from his long-term customer-service job to generate tens of thousands of unauthorized Avaya Direct International (ADI) license keys. He sold keys to Jason Hines and other customers. The DOJ’s 2023 account said individual licenses ranged in value from under $100 to thousands of dollars, and that Hines bought more than 55% of the stolen licenses.
The DOJ said Pearce also used former Avaya employees’ accounts to generate additional keys and changed account information to conceal the activity over a period of years. His wife, Dusti O. Pearce, handled accounting.
#1 Best Overall
Hines ran Direct Business Services International (DBSI), a New Jersey business communications provider and de-authorized Avaya reseller. The DOJ said he bought keys from the Pearces and resold them to resellers and end users around the world at prices substantially below wholesale.
What the $88 million figure means
The DOJ described the retail value of the pirated licenses sold as more than $88 million. That figure is the government’s estimate of the licenses’ retail value; it is not the amount the defendants personally received or a dollar-for-dollar finding of realized loss. The DOJ’s 2024 announcement reported separate financial penalties and restitution agreements for each defendant.
Rank #2
- A Sleek, High-End Phone Designed for Small Business Executives and Managers The Avaya 9500 Series Digital Deskphones allow small and medium sized businesses to deliver highly reliable,
Sentences, forfeiture and restitution
| Defendant | Role described by DOJ | Prison or confinement sentence | Forfeiture | Agreed restitution reported by DOJ |
|---|---|---|---|---|
| Raymond “Brad” Pearce | Avaya employee who generated and sold unauthorized keys | Four years in federal prison | $4 million | $17 million |
| Dusti O. Pearce | Handled accounting for the scheme | One year and one day in prison | $4 million | $10 million |
| Jason M. Hines | Purchased and resold keys through DBSI | One year and six months in prison, followed by 18 months of home confinement | $2 million | More than $5 million |
The restitution figures are amounts the defendants agreed to pay, as reported by the DOJ in July 2024. The department said a separate restitution hearing would determine the details of the order; the announcement therefore does not establish that these are the final court-ordered sums. Forfeiture is a distinct penalty and should not be added to the DOJ’s retail-value estimate as if all three figures represented the same kind of loss.
How the case progressed
- June 29, 2022: The DOJ announced an indictment. The conduct described at that stage was alleged, not yet established by guilty pleas or sentencing.
- July 28, 2023: Hines pleaded guilty to conspiracy to commit wire fraud.
- September 19, 2023: Brad and Dusti Pearce pleaded guilty to the same conspiracy.
- July 2024: The DOJ announced the sentences. Brad Pearce’s sentence was imposed July 25; the sentencing release was dated July 26. It also reported Dusti Pearce’s June sentence and Hines’s July sentence.
What this means for Avaya IP Office users
The DOJ says Avaya’s ADI license system has since been decommissioned. This case concerns an unauthorized licensing operation, not a current route for obtaining IP Office licenses. The prosecution’s account shows how privileged access and misuse of accounts were combined with resale through a third party; it does not establish that every license or IP Office installation was affected.
Recommended Free Tools
Quick Recap
Best Value
- 2 Line X 24 character display
- Provides feature buttons for 16 outside line, or programmable features such as Do Not Disturb and Auto Dial numbers
- Feature Button to simplify programming and access features Hold, Drop, Conference, Transfer, and two Intercom buttons
- Built-in speakerphone and microphone for totally hands-free calling
- Refurbished, Six Month Warranty
Rank #4
- The 1400 Series Digital Deskphones is a new, value-priced family of deskphones designed to meet
Rank #3
- Branded Lucent or Avaya - same phone
Sources
- DOJ Western District of Oklahoma, sentencing announcement, July 26, 2024.
- DOJ, Pearces’ guilty pleas, September 19, 2023.
- DOJ, Hines’s guilty plea, July 28, 2023.
- DOJ, indictment announcement, June 29, 2022.
- BleepingComputer’s independent summary, July 29, 2024.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
