Reza Davachi, Software Piracy, Missouri 2015

Three men have been charged in a multi-million dollar software piracy scheme that sold millions of dollars of Microsoft Corporation and Adobe Systems, Inc., software product key codes through a charitable organization and several online businesses.

The scheme, which involved co-conspirators in the People’s Republic of China and across the United States, illegally sold millions of dollars of software product key codes, reaping about $30 million in profits from customers who paid about $90 million for the pirated software.

Reza Davachi, 41, of Damascus, Maryland, was charged in a criminal complaint filed under seal in the U.S. District Court in Kansas City, Missouri, on June 17, 2015. The complaint, which was unsealed and made public today following Davachi’s arrest and initial court appearance, charges him with participating in a conspiracy to commit the crimes of wire fraud; unauthorized solicitation of access devices; trafficking in illicit labels, counterfeit labels and counterfeit documentation and packaging; and trafficking in counterfeit goods.

According to an affidavit filed in support of the federal criminal complaint, the investigation began when federal agents in Kansas City, Missouri, learned in 2013 that Ross had purchased (and redistributed) tens of thousands of illegitimate and unauthorized Microsoft product key codes and counterfeit product key cards from suspect sources in China.

Ross admitted that he purchased approximately 30,159 product key codes and counterfeit product key cards. Ross purchased these product key codes at prices well below that of the estimated retail price. In many cases, the affidavit says, they were distributed on counterfeit card stock intended to make it appear as if they were genuine Microsoft products.

The scheme resulted in the seizure of more than $18 million in assets, including luxury automobiles and expensive real estate, through federal forfeiture complaints.

Davachi allegedly obtained these products through various sources, including Ross and known counterfeiters in China. Davachi allegedly sent numerous wire transfers totaling approximately $672,300 to this suspect source of supply in China. The affidavit details communication between Davachi and these known counterfeiters in China where the design and manufacture of these counterfeit product key cards is discussed.

Davachi, in turn, allegedly supplied other individuals with these counterfeit product key codes and cards, selling them through his respective Web sites as well as on e-commerce sites such as eBay or Amazon.

The federal investigation, which originated in Kansas City, Missouri, resulted in several criminal cases being filed within the past week. Two of Davachi's co-conspirators, Casey Lee Ross, 28, of Kansas City, Missouri, and Matthew Lockwood, 37, of Denver, Colorado, each pleaded guilty to their roles in this same conspiracy on June 11, 2015.

Ross and Lockwood's guilty pleas last week prompted Davachi to purchase an airline ticket departing Baltimore-Washington International Airport for London (United Kingdom) Heathrow Airport. However, Davachi was arrested last night when he arrived at the airport to board the plane. Davachi remains in federal custody following his initial court appearance earlier today in the U.S. District Court in Baltimore, Maryland.

Reza Davachi, Defendant

Charges: Wire fraud; unauthorized solicitation of access devices; trafficking in illicit labels, counterfeit labels and counterfeit documentation and packaging; and trafficking in counterfeit goods

City and State: Kansas City, Missouri

Date: June 17, 2015

Outcome: Currently in federal custody

Dollar amounts:

Approximately $672,300 in wire transfers to China

Approximately $18 million in seized assets

Approximately $30 million in profits from pirated software

Approximately $90 million in payments from customers for pirated software

Source: https://www.justice.gov/usao-wdmo/pr/three-men-charged-multi-million-dollar-software-piracy-scheme