Indian entrepreneur in Arizona Arunachalam Annamalai to be deported after pleading guilty to software piracy scheme

August 6, 2015

Annamalai is the founder of Vegascart, LLC.
AB Wire

SAN FRANCISCO: Arunachalam Annamalai, 48, a citizen of India residing in Las Vegas, Arizona, has pleaded guilty in federal court to his role in one of the largest software piracy schemes ever prosecuted by the U.S. Department of Justice.

Tammy Dickinson, United States Attorney for the Western District of Missouri, said that the multi-million dollar scheme, with co-conspirators in the People’s Republic of China and across the United States, illegally sold millions of dollars of Microsoft Corporation and Adobe Systems, Inc., software product key codes through a charitable organization and several online businesses.

More than $18 million in assets, including luxury automobiles and expensive real estate, have been seized through federal forfeiture complaints. Those affidavits allege that conspirators reaped about $30 million in profits from customers who paid about $90 million for the pirated software.

Annamalai waived his right to a grand jury and pleaded guilty before U.S. Chief District Judge Greg Kays to a federal information that charges him with participating in the software piracy conspiracy.

Annamalai is the owner and operator of Vegascart, LLC.

By pleading guilty today, Annamalai admitted that he conspired with others to sell unauthorized software product key codes from Microsoft Corporation on Internet Web sites, eBay auctions, on-line merchant services, and other means. Microsoft product key codes are used to obtain full access to unlocked, licensed versions of various Microsoft copyrighted software programs.

Annamalai admitted that he purchased approximately 2,569 Microsoft software product key codes from co-conspirator Casey Lee Ross, 28, of Kansas City, Mo., between March and December 2013.

These software key codes are calculated at a loss amount of $250 each, therefore, the relevant loss amount in this matter is estimated at $642,250.

Ross and Matthew Lockwood, 37, of Denver, Colo., have each pleaded guilty in separate but related cases to their roles in this same conspiracy, according to the Justice Department.

According to court documents, the investigation began when federal agents in Kansas City, Mo., 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, they were distributed on counterfeit card stock intended to make it appear as if they were genuine Microsoft products.

Ross (doing business as Software Slashers) distributed large quantities of these product key codes and counterfeit Microsoft product key cards to co-conspirators in the United States, who in turn sold the product key codes and counterfeit product key cards through their respective Web sites as well as on e-commerce sites such as eBay or Amazon.

Lockwood admitted that he paid Ross $1,127,190 for unauthorized product key codes and counterfeit product key cards. Lockwood also admitted that he paid $1,574,054 to unidentified persons in the state of Washington for various software items. Lockwood admitted that he obtained approximately 6,165 certificates of authenticity, 4,996 “Lenovo” product key cards and approximately 11,000 unauthorized product key codes.

Under the terms of the plea agreement, the government and Annamalai jointly recommend a sentence of time served to trigger his immediate deportation from the United States. Annamalai also must enter into a stipulation of settlement in several civil cases in which the government has seized two residential properties and $212,930 from a bank account.