Baltimore Man Indicted for Selling $4M in Hot Software: BSA Applauds

 
 
By Darryl K. Taft  |  Posted 2012-07-13 Email Print this article Print
 
 
 
 
 
 
 

The Business Software Alliance (BSA), a Washington, D.C.-based advocate for the software industry, applauds the indictment of a Baltimore man for selling more than $4 million in pirated software.

The Business Software Alliance applauded the recent indictment of Baltimore resident Naveed Sheikh, who illegally sold more than 1,000 copyrighted commercial software programs from BSA members Microsoft, Adobe, Apple and others that totaled a retail value of more than $4 million.

From 2004-2008, Sheikh led a conspiracy that involved recruiting and compensating individuals running multiple rogue Websites that sold illegal copies of software. Sheikh€™s Websites, including ezencode.com, lazer-toners.com and coark.net, sold corrupted versions of software that forced users to disable security protections that could result in malware infection and other vulnerabilities. If convicted, Sheikh faces a maximum sentence of five years in prison and a $250,000 fine for the conspiracy and for each of three counts of copyright infringement. The indictment also requests forfeiture of $4 million for the proceeds of Sheikh€™s operation.

€œBSA applauds the quick action by the Department of Justice, the Department of Homeland Security and the Office of the United States Attorney,€ Jodie Kelley, BSA€™s senior vice president of anti-piracy and general counsel, said in a statement. €œWith the rate of software piracy rising each year, it is more critical than ever that the public and private sector work together to protect American innovation. BSA looks forward to working with the federal government to support intellectual-property rights and prevent future software piracy.€

Sheikh knew that he was under investigation and fled to Pakistan shortly before initially being indicted January 13, 2011. Sheikh was arrested at Washington€™s Dulles Airport at the end of January 2012 as he was attempting to re-enter the U.S. The initial indictment against Sheikh only called for forfeiture of $256,000. However, a federal grand jury returned a superseding indictment against Sheikh on June 28 seeking $4 million.

The superseding indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement€™s (ICE) Homeland Security Investigations (HSI); Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Acting Postal Inspector in Charge Peter R. Rendina of the U.S. Postal Inspection Service, Washington Division.

Sheikh allegedly advertised through his Website and sold infringing copyrighted commercial software at prices well below the suggested retail prices of legitimate, authorized copies of the software. According to the indictment, Sheikh advised purchasers that the programs offered for sale were not legal because they were copies of original software programs or €œcracked€ versions and could not be registered with the legitimate companies that developed the software programs and held copyrights covering the software. Some of the copyrighted works included Microsoft Office, Microsoft Money 2006 Small Business, Adobe Acrobat, Adobe Photoshop and Adobe After Effects Pro 7.0, Veritas NetBackUp Pro 5.1, Solid Works Office 2000 Premium, Quicken Premier Home and Business 2006 and Apple iLife 2006.

The indictment alleges that Sheikh advised purchasers that software programs could be mailed to purchasers on compact discs and downloaded from the Internet. Sheikh caused the creation of DVD-Rs and CD-Rs with copyright-infringing software programs and crack codes. Crack codes allow an individual to modify software to remove or disable security protections. Sheikh allegedly requested that purchasers send money orders for infringing software to a post office box he maintained in Towson, Md. Sheikh also permitted customers to pay for infringing software through credit card charges and electronic fund transfers. Sheikh paid a company that hosted Internet domains to register multiple Internet domains. Sheikh hosted the Website, www.ezencode.com, on computers in Scranton, Pa., and Bel Air, Md. Sheikh used computers at his residence in Bel Air, Md., and other computers, to contact and control his computer located in Scranton, the indictment said.

€œWhile this individual was purposely selling illegal software, many people don€™t realize that seemingly innocent actions like buying a single license for a software program and installing it on multiple computers is software piracy as well,€ Peter Beruk, senior director of compliance marketing at BSA told eWEEK. €œThis exposes companies and individuals to devastating legal, financial and security risks. In fact, one in five pieces of software on computers is installed illegally. BSA offers free tips and an online course to help companies manage their software assets properly and avoid this from happening.€

According to a BSA study on software piracy for the year 2011, more than half the world€™s PC users€”57 percent€”admit they pirate software. That includes 31 percent who say they do it €œall of the time,€ €œmost of the time,€ or €œoccasionally,€ plus another 26 percent who admit they pirate, but only €œrarely.€ Fewer than four users in 10 (38 percent) say they €œnever€ acquire software that is not fully licensed.

These findings come from a survey of 15,000 computer users in 33 countries that together make up 82 percent of the global PC market. Ipsos Public Affairs conducted the interviews in January and February of 2012 as part of the ninth annual BSA Global Software Piracy Study.

The commercial value of this shadow market of pirated software climbed from $58.8 billion in 2010 to $63.4 billion in 2011, a new record, propelled by PC shipments to emerging economies where piracy rates are highest, according to the BSA.

Meanwhile, from a larger trend perspective, as the average consumer grows increasingly comfortable purchasing software and applications and installing them on their own devices, there has not been a parallel increase in the average consumer€™s knowledge of information security best practices, the BSA said.

Many consumers compromise the security of their online information every day without knowing it by using default passwords to secure wireless networking equipment or very simple passwords to protect their email and online bank accounts. The BSA warns that although deals like those offered by Sheikh may seem great, a software seller instructing customers to disable their antivirus protections to install software should be a red flag that the seller is engaged in illegal activity. In addition to the obvious risks associated with sharing one€™s credit card details and home or business address with someone engaged in a criminal enterprise, if the software installation also infects the customer€™s computer with a virus, a program designed to capture their keystrokes, or other types of serious malware, the result could be financially crippling for any individual or business that relies on that computer to perform critical tasks.

Through its Faces of Internet Piracy Website, SAM Advantage course, and resources available on its BSA.org, BSA has worked to educate consumers on proper software asset management and the inherent technical, financial and legal dangers involved in using unlicensed software. Those wishing to report instances of software piracy can do so confidentially at www.NoPiracy.org.

 
 
 
 
Darryl K. Taft covers the development tools and developer-related issues beat from his office in Baltimore. He has more than 10 years of experience in the business and is always looking for the next scoop. Taft is a member of the Association for Computing Machinery (ACM) and was named 'one of the most active middleware reporters in the world' by The Middleware Co. He also has his own card in the 'Who's Who in Enterprise Java' deck.
 
 
 
 
 
 
 

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