Software pirate gets 87 months in prison

Nathan Peterson pleaded guilty to copyright infringement in December

A 26-year-old California man who pleaded guilty last December to criminal copyright infringement charges was sentenced today to 87 months in federal prison -- the longest U.S. sentence ever for software piracy -- for his role in illegally copying and selling pirated software (download PDF).

Nathan Peterson, of Antelope Acres, Calif., was sentenced today in U.S. District Court in Alexandria, Va. and ordered to pay $5.4 million in restitution, according to the Software & Information Industry Association (SIIA), a software and digital content trade group based in Washington.

Peterson, former owner of the Web-based business, iBackups, illegally copied and sold software by mail and over the Internet, according to the government statement. Officials called his operation "one of the largest for-profit software piracy Web sites to operate in the United States."

Peterson pleaded guilty in December to the charges of selling illegal software valued at more than $20 million. He earned $5.4 million from the illegal sales, equal to the amount of restitution he must pay.

In his plea agreement, Peterson said he began his piracy business in 2003 and operated it until February 2005, when it was shut down by the FBI following an undercover investigation. Peterson controlled the site, which sold copies of software products that were copyrighted by companies such as Adobe Systems, Inc., Macromedia Inc., Microsoft Corp., Sonic Solutions and Symantec Corp. at prices substantially below suggested retail, according to prosecutors.

The software products purchased on Peterson's Web site were reproduced and distributed either by instantaneous computer download of an electronic copy and/or by shipment of a CD copy through the mail. Peterson often included a serial number that allowed the purchaser to activate and use the product, according to the government.

"SIIA appreciates the tireless work of both the FBI and the US Attorney's Office," Keith Kupferschmid, SIIA's vice president of intellectual property policy and enforcement, said in a statement. "We brought this activity to light in order to stop a specific crime from being perpetrated against our members. Law enforcement's decision to aggressively pursue this case, I believe, sends a message to those who illegally copy and sell software that they will be punished to the fullest extent of the law."

Peterson's sentence is the longest ever given for software piracy in the U.S., according to the SIIA, with the average sentence over the past six years being 22 months.

SIIA first alerted the FBI of possible software piracy in the case in 2003 and later worked with investigators and prosecutors to make sure Peterson's operation was stopped.

Copyright © 2006 IDG Communications, Inc.

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