Software Pirate Receives Record Prison Sentence

Nathan Peterson, owner and operator of iBackups, was sentenced in U.S. District Court in Alexandria, VA to more than 7 years in prison. This is the longest sentence ever given for software piracy -- the average sentence over the past six years has been 22 months. Peterson forfeited nearly all of his assets to the court, and has agreed to pay restitution in the amount of $5,402,448.

Peterson pled guilty last December to two counts of criminal copyright infringement for illegally copying and selling nearly $20 million worth of computer software. He will begin paying off the remaining $5 million in damages 60 days after his release from prison, at the rate of $200 per month.

Working on behalf of its members, including Macromedia (now Adobe) and Symantec, the Software & Information Industry Association (SIIA) first alerted the FBI of possible software piracy in 2003 and subsequently worked with investigators and prosecutors to assure that Peterson's operation was stopped and that he was properly punished.

To put Peterson's sentence in perspective, in criminal piracy cases, the average damages resulting from pirated software are just over $9 million, or less than half of the $20 million caused by iBackups. Additionally, the $5.4 million Peterson agreed to pay in restitution is eight times the average fine of $659,000. This data is the result of a recent SIIA study tracking FBI cases on software piracy reported since 2000.

iBackups sold pirated software over the Internet, claiming it was "backup software" -- legal copies of software to be used by the software licensee for backup in case of system crashes. It is, however, illegal to resell such copies.