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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Missouri

FOR IMMEDIATE RELEASE
Thursday, March 2, 2017

Florida Man Pleads Guilty to Software Piracy Scheme

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Fort Lauderdale, Fla., man pleaded guilty in federal court today to his role in an international, multi-million-dollar software piracy scheme.

David Reece, 47, of Fort Lauderdale, waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Greg Kays to a federal information that charges him with conspiracy.

Investigators have seized more than $20 million in assets from conspirators in separate but related cases, who are estimated to have sold in excess of $100 million worth of illicit, unauthorized and counterfeit software products to thousands of online customers. Reece admitted today that he received approximately $2.5 million worth of illicit software key cards.

By pleading guilty today, Reece admitted that he conspired with others – including Casey Lee Ross, 30, of Kansas City, Mo., and another individual in the People’s Republic of China – to smuggle illegal merchandise into the United States and distribute it to others. Reece bought and sold illicit and/or unauthorized Microsoft Office product key cards. (Product key cards contain codes that are used to obtain full access to licensed versions of copyrighted Microsoft software programs, in this case, purportedly for Lenovo computers.)

Reece purchased large volumes of Microsoft Office product key cards from Ross and the Chinese co-conspirator. Reece then resold them to other illicit software suppliers and customers. Among Reece’s customers are two co-conspirators identified in court documents as “Individual I” and “Individual J,” who were operating in Texas.

Reece admitted that, between Sept. 21, 2013, and March 14, 2015, he received approximately 20 physical shipments of contraband, with each shipment containing approximately 500 Microsoft Office “Lenovo” product key cards, for a total of approximately 10,000 contraband items. At an estimated loss of $250 per item, this constitutes a total loss of approximately $2.5 million.

Reece is the eighth defendant charged in the software piracy scheme and the seventh defendant to plead guilty.

The investigation began when federal agents in Kansas City, Mo., learned in 2013 that Ross, the owner of Software Slashers, had purchased (and redistributed) tens of thousands of illegitimate and unauthorized Microsoft product key codes and counterfeit product key cards from sources in China. Ross has pleaded guilty to his role in the conspiracy and was sentenced to five years of probation.

Under federal statutes, Reece is subject to a sentence of up to five years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorneys Patrick D. Daly and Curt Bohling. It was investigated by Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Topic(s): 
Intellectual Property
Updated March 2, 2017