Grant Gross
Senior Writer

Software pirate gets record sentence

news
Sep 8, 20062 mins

Web site owner ordered to pay $5.4 million in restitution for copyright infringement

A U.S. judge on Friday sentenced the owner and operator of iBackups.net to 87 months in prison, the longest sentence ever given for software piracy, according to a software trade group.

Nathan Peterson, of Antelope Acres, California, also forfeited nearly all of his assets to the U.S. District Court for the Eastern District of Virginia in Alexandria, and he agreed to pay more than US$5.4 million in restitution, the Software & Information Industry Association (SIIA) said. Peterson pleaded guilty to two counts of criminal copyright infringement in December.

At that time, the U.S. Department of Justice (DOJ) called Backups.net “the largest for-profit software piracy site ever shut down by law enforcement.” The Web site illegally sold software that would have been worth $20 million on the retail market, the DOJ said.

Peterson will begin paying off the remaining $5 million in damages 60 days after his release from prison, at a rate of $200 per month.

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, SIIA said. The $5.4 million Peterson agreed to pay in restitution is eight times the average fine of $659,000, according to a SIIA study tracking U.S. Federal Bureau of Investigation cases on software piracy reported since 2000.

Peterson’s site used Google.com text ads to find customers, SIIA said. Buyers should be aware of the possibility that software being sold through text ads might not be legal, the trade group said.

Neither the prosecutor nor Peterson’s attorney immediately returned calls seeking comment.

Grant Gross

Grant Gross, a senior writer at CIO, is a long-time IT journalist who has focused on AI, enterprise technology, and tech policy. He previously served as Washington, D.C., correspondent and later senior editor at IDG News Service. Earlier in his career, he was managing editor at Linux.com and news editor at tech careers site Techies.com. As a tech policy expert, he has appeared on C-SPAN and the giant NTN24 Spanish-language cable news network. In the distant past, he worked as a reporter and editor at newspapers in Minnesota and the Dakotas. A finalist for Best Range of Work by a Single Author for both the Eddie Awards and the Neal Awards, Grant was recently recognized with an ASBPE Regional Silver award for his article “Agentic AI: Decisive, operational AI arrives in business.”

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