Carter Stewart, U.S. Attorney for the Southern District of Ohio; Darryl Williams, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS); Dugan T. Wong, Inspector in Charge, U.S. Postal Inspection Service, Pittsburgh Division; and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence handed down today by Senior U.S. District Judge Herman J. Weber.
Davis pleaded guilty on June 6, 2011 to one count each of mail fraud, copyright infringement, and two counts of filing a false income tax return. His sentence is 37 months for the mail fraud and copyright infringement and 36 months for each of the two counts of filing a false income tax return. Judge Weber ordered the sentences to run concurrently.
According to a court documents, Davis purchased software by download or on a CD, with accompanying label and packaging that was protected by copyright, namely Quicken and Turbo Tax software manufactured by Intuit, Inc. Davis copied each CD of original software multiple times without permission and created counterfeit packaging and labeling for the CDs.
Davis sold the counterfeit Intuit software on eBay, received payment, and then mailed the counterfeit software to the purchaser via the United States Postal Service. Within the packaging, Davis sometimes included a false disclaimer claiming that he was merely acting as a broker for another seller. Davis also falsely represented on the online auctions that he was selling original software, but instead the defendant sold counterfeit software, usually at prices below manufacturer’s suggested retail price.
Davis failed to report the income from the counterfeit software sales when he filed his income tax returns for 2008 and 2009.
“To perpetuate his scheme, [Davis] created 37 different eBay accounts for the illegal sales, typically with false information used to set up the account,” Assistant U.S. Attorney Tim Mangan wrote in a sentencing memorandum filed with the court. “The funds from the sales were processed through… more than 20 different bank accounts controlled by the Defendant. This all stands in contrast to the Defendant’s tax returns, which represented that he made a modest living as an independent photographer.”
Davis was also ordered to pay $80,074.08 in restitution to the IRS, forfeit all computer items used to manufacture and distribute the fake software, as well as forfeiting a 2006 Hummer, and $192,117.31 that U.S. Postal Inspectors seized from his bank accounts. He also has to pay $158,980 in restitution to the software manufacturer.
The case was prosecuted by Assistant U.S. Attorney Timothy S. Mangan of the U.S. Attorney’s Office for the Southern District of Ohio and Trial Attorney Thomas Daugherty of the Criminal Division’s Computer Crime and Intellectual Property Section.
The sentencing announced today is an example of the type of efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force). Attorney General Eric Holder created the IP Task Force to combat the growing number of domestic and international intellectual property crimes, protect the health and safety of American consumers, and safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work. The IP Task Force seeks to strengthen intellectual property rights protection through heightened criminal and civil enforcement, greater coordination among federal, state and local law enforcement partners, and increased focus on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders. To learn more about the IP Task Force, go to Justice.gov/dag/iptaskforce.
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