Indiana Man Sentenced For Selling Counterfeit Software On eBay

An Indiana man was sentenced Wednesday to 27 months in federal prison for selling more than $700,000 worth of counterfeit computer software on eBay.

Courtney Smith, 36, of Anderson, Indiana, pleaded guilty and was sentenced in U.S. District Court in the Southern District of Indiana for selling counterfeit computer software over the Internet in violation of criminal copyright infringement laws. At the sentencing, Smith admitted to the court that he bought illegally copied Rockwell Automation computer software through the auction site, and then duplicated and resold the software, which is still copyright protected, to other eBay users, according to court documents.

"This kind of scheme is a recognized problem and fairly wide spread," said Assistant U.S. Attorney Steve DeBrota in an interview with InformationWeek. "This problem has significantly increased over time. An increasing number of businesses are seeking out and buying counterfeit software to save some money."

Between March 6 and May 26, 2004, Smith sold counterfeit copies of Rockwell Automation software in 32 or more separate eBay auctions, receiving $4,149.97. The actual retail value of this software was in excess of $700,000, according to a release from the U.S. Department of Justice.

DeBrota noted that while Rockwell Automation was hurt by the fraud, the people and companies buying and using the counterfeit software also could be liable. DeBrota prosecuted the case, along with trial attorney Matthew J. Bassiur of the Computer Crime and Intellectual Property Section of the Criminal Division at the U.S. Department of Justice.

"Mr. Smith exploited eBay to sell hundreds of thousands of dollars worth of counterfeit software at drastically reduced prices, thereby illegally profiting on the back of the copyright holder," said Assistant Attorney General Fisher, in a written statement. "The Department of Justice is committed to prosecuting individuals who exploit legitimate online auction sites to sell pirated software and commit other acts of fraud."

The government noted that the case arose from a DOJ initiative to combat online auction piracy. FBI agents executed a search warrant at Smith's residence in Anderson on Dec. 15, 2004, seizing computers, CDs and devices used to manufacture and sell the counterfeit software. According to the DOJ release, Smith admitted to the investigators that he knew it was illegal to sell copyrighted software and that he not only manufactured and sold the counterfeit software on eBay, but also made his own Rockwell Automation Software labels to affix to the counterfeit software.

Rockwell Automation, Inc. is a global provider of automation, power, control, and information software. The company produces specialized factory management software.

Earlier this week, a woman described by the FBI as a Bulgarian member of a transnational criminal ring was arrested in connection with what the government is calling an "elaborate scheme" to defraud eBay users of more than $350,000. Mariyana Feliksova Lozanova allegedly tricked prospective buyers on eBay to wire her money for major purchases, like motor vehicles and boats, which were never delivered, according to a release from the FBI, which investigated the case.