Software pirate pleads guilty to charges

Nathan Peterson faces up to 10 years in prison and a $500,000 fine

A California man who operated a Web site selling millions of dollars worth of pirated software has pleaded guilty to two counts of criminal copyright infringement, the U.S. Department of Justice said.

Nathan Peterson, 26, of Antelope Acres, Calif., pleaded guilty yesterday in U.S. District Court for the Eastern District of Virginia in Alexandria. Peterson was owner of iBackups.net, "the largest for-profit software piracy site ever shut down by law enforcement," U.S. Attorney Paul McNulty of the Eastern District of Virginia said in a statement.

Peterson faces a maximum sentence of 10 years in prison and a $500,000 fine. Sentencing is scheduled for April 14. Including restitution of $5.4 million, the penalties may be the highest ever imposed on a software pirate, said the Software & Information Industry Association (SIIA). The trade group alerted the FBI in 2003 of possible copyright violations at iBackups.net.

Peterson's Web site was responsible for close to $20 million taken away from software vendors, the Justice Department said. Peterson told customers that software sold on iBackups was legal "backup software" to protect against computer crashes, SIIA said.

The iBackups site, distributing products via downloads or mail, sold software "substantially below" suggested retail prices from companies such as Adobe Systems Inc., Macromedia Inc., Microsoft Corp. and Symantec Corp., the DOJ said.

Law enforcement authorities shut down iBackups in February, and the site now tells visitors it was shuttered by the FBI and DOJ. The site started operating in 2003 and advertised its products over the Internet, SIIA said.

Peterson used iBackups to fund an "extravagant lifestyle," including purchases of multiple homes, cars and a boat, the DOJ said. The government seized numerous assets from Peterson, including a restored 1949 Mercury Coupe vehicle purchased for $44,000, a 2005 Dodge Ram, a 2003 Chevrolet Corvette, a 2004 Toyota Camry, a 2005 Toyota Corolla and a 2006 Mercedes-Benz S-Class bought for $125,000.

Copyright © 2005 IDG Communications, Inc.

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