Three employees at a Long Island Information Technology company have admitted to their roles in an elaborate, high-tech scheme to defraud customers by stealing keys and licenses for some software programs.
Michael Calabria, age 49, of Manorville, Joseph Keegan, age 46, of Merrick, and Casey Silver, age 36, of Stamford, Connecticut, pleaded guilty to criminal copyright infringement for their roles in a years-long scheme, the US Attorney's Office announced.
Calabria and Keegan were principals at Constructure Technologies in Melville and Silver, a project manager at the company, admitted to installing unlicensed versions of software using “cracking” or “key generating” programs.
By using the unlicensed software, Constructure employees were able to activate copies of the software without paying for a license and obtaining a fee, allowing them to pocket the money.
According to court filings, Constructure provided information technology services, helping install, manage and service various networks and other technology products for small and medium-sized businesses.
Calabria was Constructure’s president, Keegan was the company’s Chief Technology Officer, and Silver was a Project Manager.
Acting US Attorney Jacquelyn Kasulis said that between 2011 and 2018, Constructure sold, installed, and provided services for computer programs that were copyrighted and then sold by software companies.
Some of those programs were designed so that they could not be activated until a user paid the company for a “license” to use it, which then provided a “key” - a string of letters, numbers, and symbols, to activate the software.
Clients would pay Constructure to purchase licenses for those programs, to be activated with a legitimate key.
Instead, the three installed unlicensed software by using cracking programs and key generators.
Constructure employees, including Keegan, obtained license keys and cracking programs from the Internet. They also tested those programs on a computer server located in the basement of Constructure’s office in Melville and on a file-sharing site controlled by Constructure, so that the programs could be used remotely by Constructure employees.
Kasulis said that by installing working, but unlicensed, versions of software, Constructure was able to bill a customer for the software, under the pretense that Constructure purchased a copy on behalf of the customer, while not actually paying for it.
“With the guilty pleas and deferred prosecution agreement, Constructure and the individual defendants admit to committing a high-tech theft by installing unlicensed software they didn’t pay for, and cheating software companies of license fees they were owed,” acting US. Attorney Kasulis said.
“Protecting intellectual property rights is an important priority of this Office, and we will continue to investigate and prosecute those who ignore those rights for their own profit.
In addition to the guilty pleas, Constructure itself is charged with a felony violation of the Digital Millennium Copyright Act and agreed to pay a $60,000 fine. When Calabria, Keegan, and Silver are sentenced, they will face up to one year in prison and a fine.
“We install software on our computers to protect us from hackers and criminals. Software companies are constantly updating and fixing programs with patches to stay one step ahead of the bad actors who work non-stop to exploit vulnerabilities," FBI Assistant Director-in-Charge Michael Driscoll stated.
"The three employees who are pleading guilty in this investigation only saw the profit they could make if they gamed the system. Users paying for security software should be able to rely on the legitimacy of it."
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