Constructure Technologies, LLC Also Enters into Deferred Prosecution Agreement to Resolve Charge Related to Illegal Installation of Software between 2011 and 2018
Michael Calabria, Joseph Keegan and Casey Silver pleaded guilty yesterday in federal court in Central Islip to criminal copyright infringement. Calabria and Keegan were principals of Constructure Technologies, LLC (“Constructure”), located in Melville, New York, and Silver was a Constructure employee. The charge relates to the defendants’ installing unlicensed versions of software by using “cracking” programs or “key generators,” which allowed Constructure employees to activate copies of the software without paying for a license and obtaining a key. In addition to the guilty pleas, Constructure itself is charged with a felony violation of the Digital Millennium Copyright Act (“DMCA”) and agreed to pay a $60,000 fine. The fine is part of a deferred prosecution agreement that Constructure has entered into with the United States Attorney’s Office for the Eastern District of New York. The relevant portion of the DMCA prohibits the criminal circumvention of copyright protection systems, including encryption systems.
Jacquelyn M. Kasulis, Acting United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas and deferred prosecution agreement.
“With the guilty pleas and deferred prosecution agreement, Constructure and the individual defendants admit to committing a high-tech theft by installing unlicensed software they didn’t pay for, and cheating software companies of license fees they were owed,” stated Acting U.S. Attorney Kasulis. “Protecting intellectual property rights is an important priority of this Office, and we will continue to investigate and prosecute those who ignore those rights for their own profit.” Ms. Kasulis also thanked the Suffolk County Police Department and VMWare for their valuable assistance with the case.
“We install software on our computers to protect us from hackers and criminals. Software companies are constantly updating and fixing programs with patches to stay one step ahead of the bad actors who work non-stop to exploit vulnerabilities. The three employees who are pleading guilty in this investigation only saw the profit they could make if they gamed the system. Users paying for security software should be able to rely on the legitimacy of it,” stated FBI Assistant Director-in-Charge Driscoll.
The Scheme to Circumvent Copyright Protection Systems
According to court filings, Constructure provided information technology services, helping install, manage and service various networks and other technology products for small and medium sized businesses. Calabria was Constructure’s President, Keegan was the Chief Technology Officer, and Silver was a Project Manager.
Between 2011 and 2018, Constructure sold, installed and provided services for computer programs that were copyrighted and then sold by software companies (“Victim Software Companies”), including VMWare, a global cloud computing software company. Some of those computer programs were designed so that they could not be activated until a user paid the company for a “license” to use that software. In purchasing a license, the user received a “key”—a string of letters, numbers and symbols—that, when entered into the copy of software obtained by the user, activated the software. Constructure’s clients generally paid Constructure to purchase licenses for such computer programs and to activate those programs with a legitimate license key.
Starting in or about 2011, Calabria, Keegan, and Silver helped to operate Constructure’s business in part by installing unlicensed versions of software from Victim Software Companies by using cracking programs or key generators, which allowed Constructure to activate copies of the software without paying for a license and obtaining a key. Constructure employees, often at the express direction of Calabria or Keegan, used cracking programs or key generators to install software from multiple Victim Software Companies.
Constructure employees, including Keegan, obtained license keys and cracking programs from the Internet. They also tested those programs on a computer server located in the basement of Constructure’s office in Melville and on a file-sharing site controlled by Constructure, so that the programs could be used remotely by Constructure employees.
By installing working, but unlicensed, versions of software, Constructure was able to bill a customer for the software, under the pretense that Constructure purchased a copy on behalf of the customer, while not actually paying for it. Constructure employees did not inform Constructure’s clients or the Victim Software Companies that Constructure employees used “cracks” to install those programs.
From approximately 2011 to approximately 2018, Constructure employees installed cracked software programs for multiple clients, including clients located in Hicksville, New York; Mineola, New York; Manhattan, New York; and Bridgewater, New Jersey.
When sentenced, each defendant faces up to one year in prison and a fine.
The Deferred Prosecution Agreement and Criminal Information as to Constructure
Under the terms of the deferred prosecution agreement, Constructure will pay a criminal penalty of $60,000 and maintain a compliance and ethics program designed to prevent and detect violations of the DMCA and other applicable laws. If the company breaches the agreement, it will be subject to prosecution for the charge in the criminal information that was filed today, charging Constructure with a criminal violation of the DMCA
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