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Man Gets 7 Years for Software Piracy 296

Posted by Zonk from the sucks-to-be-him dept.
mytrip writes to mention a C|Net article about the largest sentence for software piracy ever handed down by a U.S. court. Nathan Peterson of Los Angeles has been levied with an enormous fine after selling millions of dollars worth of software between 2003 and 2005. "U.S. District Court Judge T.S. Ellis III on Friday ordered Peterson to pay restitution of more than $5.4 million. Peterson pleaded guilty in December in Alexandria, Va., to two counts of copyright infringement for illegally copying and selling more than $20 million in software. Justice Department and industry officials called the case one of the largest involving Internet software piracy ever prosecuted. "
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Man Gets 7 Years for Software Piracy More

Man Gets 7 Years for Software Piracy

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  • So? (Score:5, Insightful)

    by HairyCanary ( 688865 ) on Sunday September 10, 2006 @09:51PM (#16078274)
    This is considerably different than the average "pirate" who downloads software for him/herself and perhaps distributes copies to friends. This guy was *selling* pirated software. That's a whole different ballgame, and it makes him a garden variety criminal in my opinion. Not really news, and certainly not relevant to me in a "Your Rights Online" sort of way.

    • Re:So? (Score:5, Funny)

      by __aaclcg7560 ( 824291 ) on Sunday September 10, 2006 @09:55PM (#16078293)
      He won't have any Slashdot priviliges in prison.

    • Espically since (Score:5, Insightful)

      by Sycraft-fu ( 314770 ) on Sunday September 10, 2006 @10:18PM (#16078398)
      Selling illegally copied software is fraud. Unless you are being explicitly clear that people are buying an illegal copy (in which case they aren't likely to buy) you are defrauding them. They believe that they are getting a great deal on legit software. Ok, you can argue they should be smarter than that but hey, fire sales happen sometimes (for example I got a free copy of Visual Studio 2005 for going to a launch event). Regardless, the crime is on the seller's end. They are the ones pushing their merchandise as legit.

      So while I firmly believe that copying software illegal for personal use is a minor civil infraction, like speeding, and should be punished accordingly (a small fine that's enough to make you not want to do it but proportional to the harm) I believe that commercial copyright infringement is much more serious.
      • ... clear that people are buying an illegal copy (in which case they aren't likely to buy) ...


        Duh ?!?!?

        If the price is right, people will buy anything. Why do you think pawn shops are doing good business?

        • Re: Especially since (Score:4, Funny)

          by Ingolfke ( 515826 ) on Sunday September 10, 2006 @10:52PM (#16078538) Journal
          Why do you think pawn shops are doing good business?

          I was thinking prime locations, friendly staff and clean stores with outstanding merchandise... no?

        • Re: (Score:3, Insightful)

          by Bodrius ( 191265 )
          I'd take a guess that if the price was right for pirated copies, he wouldn't be making US$ 20 million dollars selling them.
          Or maybe it's like the 'change bank', it's all about volume?

        • Re: Especially since (Score:5, Informative)

          by UncleRage ( 515550 ) on Sunday September 10, 2006 @11:45PM (#16078726)
          Actually, having worked in a pawn shop in my younger years, I feel forced to chime in here.

          Most states have extremely strict laws regarding the pawn trade; and most pawn shops today are extremely careful concerning their business practices.

          Pawn shops in Florida (as an example) are highly regulated and are required to work with both state and local authorities. Forms (including make, model and serial numbers) of merchandise are filled out in triplicate and provided to the local police. When make, model and serial are not applicable (as in the case of jewelry), exact measurements (in both carat and composition) of stones and and metals are recorded as is a precise description of said piece. All of the above are matched against local and state stolen item reports on a weekly to monthly basis. (I use Florida as my example, as that is the state in which I worked; I gladly tie that in with others, as the National Pawnbrokers Association allowed me the opportunity to meet and speak with pawnbrokers from all over the country -- 99% of which followed the same practices).

          Often, in the case of theft, the Pawn Shop owner is the one that actually loses out in the case of stolen merchandise; as the property is then pulled into state custody as evidence and eventually returned to its owner.

          The pawn trade itself is, by and large, nothing more than a lending mechanism for the lower (to lower-middle class) establishment. Afterall, please tell me a single bank that's going to loan Bob Whoever a c-note to cover his insurance payment while waiting for a drywall job to pay up. Granted, it charges a higher interest rate, but even that is regulated in most states.

          I might suggest you take a look at the business models of both Cash America and Value Pawn as an example of how the industry has changed. Personally, I think the indy shop has more in the way of value for the lendee, but I mention them only to counter the "dark and stinky" shop notion that seems to surround the pawn industry.

          So, if you want to cite a comparison between immoral activities (such as the active sale of pirated software and something else), why not point the finger at professional lobyists, criminal defense lawyers and/or telemarketing firms?

      • Re: (Score:3, Insightful)

        by Richard W.M. Jones ( 591125 )

        So while I firmly believe that copying software illegal for personal use is a minor civil infraction, like speeding, and should be punished accordingly (a small fine that's enough to make you not want to do it but proportional to the harm) I believe that commercial copyright infringement is much more serious.

        Where to start? Speeding endangers not just yourself but other road users and pedestrians. The amount of energy in your car increases with the square of speed making stopping harder and your car m

    • This is considerably different than the average "pirate" who downloads software for him/herself and perhaps distributes copies to friends. This guy was *selling* pirated software. That's a whole different ballgame, and it makes him a garden variety criminal in my opinion.

      Yes, this guy is a "criminal", while the "average pirate" that downloads warez (and distributes copies to friends) is guilty of a "civil" infraction of copyright infringement. Unless this "average pirate" does this for more than $1000 wort

  • Sold $20 returns $5.4 = Profit! ? (Score:4, Interesting)

    by Blahbooboo3 ( 874492 ) on Sunday September 10, 2006 @09:52PM (#16078283)
    Wait, so he sold $20million, pays $5.4 back? Not a bad return I would think. Should I assume the government also seized all his assets etc?

    • Re: (Score:2, Informative)

      by Average_Joe_Sixpack ( 534373 )
      Appears to be a total asset forfeiture as well. Merc News [mercurynews.com]
      • Good. At least the government gets SOMETHING right :) However, I bet he has some nice off-shore bank accounts with some money hidden away.
        • I doubt he has anything hidden offshore unless it is actual hidden some were. Generaly, it is almost impossible to hide assets from the government in this day and age. 20 years ago, it might have been more likley. Most countries now, will either have records of the money tranferes, or actualy willing to inform the government or the acounts people hold. There is probably a database availible for different governments to search thru.

          A few years ago, a friend had some over seas utility bonds mature. He had the

    • Re: (Score:2, Funny)

      by __aaclcg7560 ( 824291 )
      If he was smart, half his assets should be in a Swiss bank account and someone will be waiting with plane tickets to a safe-haven country when he gets out in three years for good behavior. Only then will crime pay.
      • Don't count on good behavior getting him out too fast. This was a federal case (interstate crimes?). "Good behavior" doesn't get you too far with Federal Prisons. Best he can hope for is a Club Fed prision which I'm doubting. Be it three, seven, or even one year in a pound me in the ass fed prision will likely scar this white-collar for life and you don't get away from those memories.

    • Re: (Score:3, Informative)

      by The Wing Lover ( 106357 )
      No, I think he sold "$20 million worth of software"... counted at the retail price. I suspect he made nowhere near the $5 million that he will have to pay. Not to mention th efact that he's gotta sit in jail for 7 years.
  • He got what he deserved.

    He was stupid to allow himself to be caught. Lost 7 years of your life for only money.

    Again everything in this world seems related to money one way or the other.
    • He was stupid to allow himself to be caught. Lost 7 years of your life for only money.

      Reminds me of a job I had.

  • A tad harsh (Score:5, Insightful)

    by saskboy ( 600063 ) on Sunday September 10, 2006 @09:57PM (#16078306) Homepage Journal
    I think people who cheat others out of their legitimate software purchases ought to get jail time when it's obvious they or others will do it if no harsh penalty is on the table.

    Isn't 7 years a bit long in comparison to more serious crimes of violence and fraud? Perhaps 7 years is average for a fraud conviction, but I don't understand why rapists [in Canada at least] get about 5 year sentences, mercy killers [Robert Latimer] 10 years, and serial killers [Karla Holmolka] gets 9 years. Where is the equity?

    • Re: (Score:2)

      by Somnus ( 46089 )
      A good point -- the marginal cost of serious (e.g., violent) crime goes down if you're already doing a mandatory drug minimum or get the book thrown at you for stuff like this. It just encourages sociopaths to enter previously innocuous rackets.

      Also, if he pays restitution, what's the point of the jail sentence?
      • Also, if he pays restitution, what's the point of the jail sentence?

        There's no deterrent to others if the only punishment is paying back what you made and carrying on with your life.

      • Re: (Score:2)

        by fm6 ( 162816 )

        It just encourages sociopaths to enter previously innocuous rackets.

        And why is that bad? Would you rather have sociopaths committing armed robbery or selling bogus software?

        Anyway, I'm a little tired of the way sociopaths tend to dominate every discussion of criminal penalties. Most criminals aren't sociopaths, and trying to design your criminal justice system around sociopaths is stupid. That system is supposed to deter and rehabilitate, and those are things you can't do with outright sociopaths.

        • Re: (Score:2)

          by Somnus ( 46089 )

          And why is that bad? Would you rather have sociopaths committing armed robbery or selling bogus software?

          a) They won't give up their established entreprises when they branch out to piracy.

          b) I'd rather that software pirates not use violent means to get payment for their merchandise or guard their turf, like drug dealers do now.

          Anyway, I'm a little tired of the way sociopaths tend to dominate every discussion of criminal penalties. Most criminals aren't sociopaths, and trying to design your criminal justice

    • Re:A tad harsh (Score:5, Interesting)

      by themonkman ( 877464 ) on Sunday September 10, 2006 @10:19PM (#16078407)
      While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists. The courts tend to favor the rights and property of corporations over that of human lives. It's deplorable.

      I'm sure that this man had sold this software at prices far below what any legitimate retailer could afford. With that being a reasonable assumption (since he sold so damn much of this software), the people he sold it to would probably have been unlikely to purchase the software at all had it not been at such a deep discount. If they would not have purchased the software otherwise, there is a net damage of almost zero to the manufacturer of the software. There is no lost supplies, real property, or investment. They did not have to do the advertising for this person's business either. If anything, the pirated software he did sell made for great PR to those software companies. The people who would've not otherwise purchased the software at regular or semi-discounted prices are probably pleased with their purchase, and will now be far more likely to buy the new improved releases of that product later on.
      • While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists.

        On the one hand, you have someone who was convicted of several thousand counts of software piracy. Comparing that to what someone gets for maybe a dozen acts of rape would be useful to factor in. On the other hand, if a child rapist is going away for less than 7 years, a fix would start by putin them away for longer.

        Remember to always factor in the number of coun

      • While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists.

        You know very well that's not really true. Convicted pedophiles are marked for life, having to register where they live and sometimes not able to live certain places at all. Sex crimes generally prevent people from obtaining decent employment as well. People convicted of sex crimes are punished until the day they die, not just while they are in prison. Many would say t

        • Re: (Score:2)

          by saskboy ( 600063 )
          I'd argue that theivery is something you can train people not to resort to if they have a decent skill, but pedophillia is something a person lives with until they die or have brain surgery at the very least.
          • There is a difference between wanting something and doing it. I would hazard a guess that almost every male on the planet, and a significant fraction of the females too, has been intruiged by the idea of rape or fantasized about it. This doesn't mean 70% of humanity are rapists, because the vast, vast majority of us will never do it.

            I will bet that for every pedophile who carries through on his or her desires, there are a thousand or more who share the same desires and would happily jail for life anyone who

            • Re: (Score:2)

              by RsG ( 809189 )
              True, but (at least in a just society), we don't punish thought, we only punish action. While there are some people on the planet who want to make thinking certain thoughts illegal, thankfully the law isn't on their side yet.

              Ergo, somebody who has actually commited rape is considered monsterous, whereas someone who's merely thought about it is not. And moreover, the rapist has proven through action that they are willing to commit such a crime - in other words, they have identified themselves as dangerous.
      • While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists. The courts tend to favor the rights and property of corporations over that of human lives. It's deplorable.

        Rape is almost never prosecuted in the federal courts.

        Economic crimes that impact interstate commerce are prosecuted frequently in the federal courts. The Feds have never taken economic crimes lightly.

        However, the chances are excellent that when on the rare -

      • Re: (Score:2)

        by shark72 ( 702619 )

        "While I hate thieves more than most, it is quite maddening and ironic that we put software pirates away for longer than we do child rapists."

        Can somebody please provide an example of somebody who was convicted of raping a child and who received less than seven years? I'm sure there are examples out there, but my guess is that they are quite rare. By comparison, the seven year sentence for software piracy was the largest such ever. So, seven year sentences for software piracy are also exceedingly rare.

        • Re: (Score:2)

          by Rix ( 54095 )
          No, that isn't an example of the broken window fallacy, as the total economic production after an act of piracy is not lower than it was before. ie, there's no missing window.

      • Re: (Score:3, Interesting)

        by poot_rootbeer ( 188613 )
        it is quite maddening and ironic that we put software pirates away for longer than we do child rapists.

        I know you chose "child rapists" for your comparison to provoke a specific emotional response, but let's think about what happens to those people when they're caught.

        Convicted felons might not have much honor, but the unwritten prison code deals pretty harsh justice onto people who hurt children. A molestor is much more likely to be killed my another inmate than a software pirate. And even one does surviv

    • Isn't 7 years a bit long in comparison to more serious crimes of violence and fraud? Perhaps 7 years is average for a fraud conviction, but I don't understand why rapists [in Canada at least] get about 5 year sentences, mercy killers [Robert Latimer] 10 years, and serial killers [Karla Holmolka] gets 9 years. Where is the equity?

      I doubt this'll make much difference, but I'll throw it out there: The article says he was charged with two counts. Would I be correct in assuming that if it had been one count, h

      • Re: (Score:2)

        by saskboy ( 600063 )
        In Canada people don't get consecutive sentences, they are concurrent. In the States, I think consecutive penalties [which often make more sense for serious crimes] are the norm. So yes that may be why the years are so many in this criminal's case.

    • Re: (Score:3, Interesting)

      by westlake ( 615356 )
      Isn't 7 years a bit long in comparison to more serious crimes of violence and fraud? Perhaps 7 years is average for a fraud conviction, but I don't understand why rapists [in Canada at least] get about 5 year sentences, mercy killers [Robert Latimer] 10 years, and serial killers [Karla Holmolka] gets 9 years. Where is the equity?

      In the American system crimes of violence are almost always prosecuted at the state and local level. Prisons are crowded, courts are stressed, and there is pressure to cut a deal.

    • I think people who cheat others out of their legitimate software purchases ought to get jail time when it's obvious they or others will do it if no harsh penalty is on the table.
      What if pirates do not hide the fact that software they sell is not legitimate? At least those I've dealt with so far never tried to conceal it.
  • Well, that should give him PLENTY of time. Heck, I could do it in a few minutes!
  • *drumbroll* sell pirated software to defraud BOTH the customer and the company that made it and land in pound me in the ass prison. Piracy is one thing, but making a buck off of it is something else entirely. At least with a personal pirater theres a chance they'll buy the next version (say they need support). People doing what this guy does deserve every day they get (and white-collar criminals have a much harder time behind bars). Now if only we could get the same kind of treatment with equally criminal C
  • It's not like he was out gunning people down, conning windows out of their money or touching children. I don't like the idea of someone out there ripping businesses off. But when there is no discernable victim I'm not sure the punishment fits the crime in this case.
    • Victims:
      1) Software companies not making the money for the copies used
      2) The guys who thought they were buying the real thing, only to eventually find out they don't have Adobe/MS support, because they bought a copied version
      • 1. not discernable. that was the key word there.
        2. fair enough. I guess I didn't realize that people were buying software from the guy without realizing that they were getting a pirated copy. (15% of the price didn't tip them off?)
        • 1. not discernable. that was the key word there.

          The piracy argument of "wouldn't otherwise buy" is a lot less effective here, simply because people are buying the stuff, albeit at reduced prices. I think that argument has merit in economic harms discussions in regards to people playing with photoshop as amateurs, but most of the people paying for pirated copies would probably use it somewhere.

          Insofar as people getting duped, why would you buy software you thought was pirated when 99% of it is free on th
          • Redirecting potentional customers away from a company, depriving them from profits. Even if you do it in an illegitmate way (as this person has done), is not the same as stealing.

            Mostly I feel uncomfortable handing out harsh punishment to non-violent criminals. If you gave a compulsive shoplifter 7 years in prison, I would feel the same way. Although I might be more sympathetic to the shoplifter, they might have a legitimate illness.

            Also, I would like to point out that I never mentioned the whole "wouldn't
            • 1) I never said it was equal to stealing, I just said these are more of potential customers than your average guy bittorrenting a copy of CS2. I didn't mean to put words in anyone's mouth, just convey that.
              2) And for the record, I still think that this guy getting less jail time than some rapists is frakked up.

  • Worse yet... (Score:5, Informative)

    by TheOtherChimeraTwin ( 697085 ) on Sunday September 10, 2006 @10:11PM (#16078372)

    ... his website ibackups.net [ibackups.net] has been defaced.

    (serves him right)

  • I don't believe that putting a person in prison for seven years and make them pay an unrealistic fee is good public policy. I think that anyone convicted of a non-violent crime should receive no more then one year in prison and the fines should not exceed 10% of their expected lifetime income. Now we have to pay $250,000 to house this guy and he will never pay the fines against him becuase they are impossible to pay. I remmeber in the 90's a man accidently started a fire and the USFS gave him a bill of $1
    • Just because the crime is not violent doesn't mean it should have a more leinient sentance.

      I know there is a huge difference between murder and copyright/fraud etc, but White collar crime should be treated as seriously as others. A 7 year sentance should discourage anyone of trying the same thing, if this guy got 12 months with 6 on good behaviour whats to stop the next guy doing the same thing and hiding his profits in an offshore account with the intent to serve a minimum sentance.

      Cases like this are not
      • If it was, there would be no more killings in states with capital punishment. Hell, I for one certainly don't want to die!

        Whether a crime is committed depends only on two factors: How much is to gain and how likely is it to be caught. The only thing punishment means is that people will go out of their way to avoid it, probably committing worser crimes to circumvent it.
    • I agree with your overall idea pretty much. Hell, if I had mod points right now I'd mod you up myself.

      People do need to be punished, but the punishment should also fit the crime. And when it comes to intellectual property, rarely is there even a victem. Lost sales is NOT victimization because you cannot guarantee those numbers would have been concrete sales. What he did do was violate the copyright codes and there should be defined punishements for that. However, like most things in the US court system ther

  • DRM (Score:2)

    by TLouden ( 677335 )
    Still, it seems like we should lock down all consumer products because it's not like the real profit killers are organized and highly motivated people who can get around it anyways.
  • The FBI and the Computer Crime & Intellectual Property Section of the United States Department of Justice have essentially "tagged" the web site of a piracy guy. That's the first time I've seen them do that and I hope it is an effective way to keep raise awareness of the consequences of disregarding the law. see: www.ibackups.net [ibackups.net]

    The individual responsible for the operation of the iBackups website has pleaded guilty to two counts of criminal copyright infringement in the U.S. District Court for the E

  • Software piracy resulted in a loss of $34 billion worldwide in 2005, a $1.6 billion increase over 2004, according to a study commissioned by the Business Software Alliance.

    The BSA has been making up numbers of this type since its founding. Please note, that their acronym has many other fun derivations. These Bull Shit Artists are claiming that there has been a 34 BILLION dollar loss, and worse, it's a 1.6 Billion dollar increase over last year! While they have yet to PROVE unequivocably that there is this

  • Good. Should have 20 years probation too. (Score:4, Funny)

    by notaprguy ( 906128 ) on Sunday September 10, 2006 @11:41PM (#16078711) Journal
    In my experience, people who steal once tend to do it again...even if they get caught. It becomes a wierd habit. Look at George Bush. He stole the first election and, even thought he got caught, he proceeded to steal another. Software thiefs are much the same.

  • What Ibackups.net did, kind of like MP3.com (Score:3, Insightful)

    by twitter ( 104583 ) on Sunday September 10, 2006 @11:47PM (#16078733) Homepage Journal

    I see lots of people saying things like, "He deserves it and death!" but no one bothering to report exactly what ibackups.net actually did. According to this [complaints.com], the guy was selling "backup coppies" of software that people claimed they already owned. The business model, presumably, was made to fill the very real service gap in commercial software for people who manage to lose their original distribution media. As far as M$ and many other companies, people like that are out of luck and have to buy the software all over again. This happens much more often than you would think. Unlike MP3.com, it was not possible to check if the customer had a copy by asking them to insert it though he could have asked for product activation keys. In any case, this guy was not simply pressing CDs and selling them, he depended on the honesty of his customers.

    It's no surprise that this guy got slapped down after the demise of MP3.com's similar backup scheme.

    I don't really understand the vindictiveness of the responses. Once again, using free software avoids all of this monkey business. Why give money to people who throw people in jail for trying to help you? It's not like the guy actually hurt anything but the bottom line of some of the country's most wealthy companies. Seeing as those companies are still doing just fine selling software to complete suckers, I don't see where this person hurt anyone. Financial ruin should be punishment enough. I don't want my government wasting law enforcement resources on nonsense like this.

    • Re: (Score:2)

      by MC68000 ( 825546 )
      "It's not like the guy actually hurt anything but the bottom line of some of the country's most wealthy companies"

      Umm, WOW. So I can shoplift from WALMART because it's a big company?
      "Seeing as those companies are still doing just fine selling software to complete suckers, I don't see where this person hurt anyone"

      Yeah, I know I'm a sucker for thinking proprietary software is ever worth anything. The GIMP is so much better than Photoshop, right? Can you really claim with a straight face that Audacity is b

      • Yeah, I know I'm a sucker for thinking proprietary software is ever worth anything. The GIMP is so much better than Photoshop, right? Can you really claim with a straight face that Audacity is better than SoundForge?

        I can tell you with a straight face that only a few professionals actually need the one or two tweaks found in non free software and that even they would be better off if software patents and device makers games did not make things that way. Given the choice between a free and non free progra

    • Re: (Score:2)

      by shark72 ( 702619 )

      "The business model, presumably, was made to fill the very real service gap in commercial software for people who manage to lose their original distribution media."

      "Unlike MP3.com, it was not possible to check if the customer had a copy by asking them to insert it though he could have asked for product activation keys. In any case, this guy was not simply pressing CDs and selling them, he depended on the honesty of his customers."

      When head shops tell you that their stuff is for smoking tobacco, they

  • Crimes and Punishments (Score:4, Insightful)

    by edward.virtually@pob ( 6854 ) on Monday September 11, 2006 @12:43AM (#16078911)
    I don't like those who sell pirated versions of software. They deserve to be heavily fined and driven out of business. However, in a world in which the man who started a war in the middle east [wikipedia.org] based on [slashdot.org]pretenses [cnn.com] continues to roam free and unpunished, I think condeming them to seven years of being imprisoned, subject to the whims of power tripping bureaucratic thugs and regular anal raping is a bit disproportionate. I'm sure this will be mod'd off-topic, but it really isn't.

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