Man Gets 5 Years for Software Fraud

Scott Laney, formerly of Battle Ground, near Vancouver, and now of Ogden, Utah, was sentenced in federal court nine months after he pleaded guilty to conspiracy to traffic in counterfeit labels and computer program documentation, as well as conspiracy to engage in money laundering. His coconspirator, Tobias Grace, of Vancouver, is to be sentenced in January.

Prosecutors said the two obtained some of their software at a fraction of the retail value from Microsoft Corp. workers who exploited the company's internal ordering system. Laney and Grace created a web of companies to relabel and sell the software as if it were legitimate.

They also altered the software licenses for expensive server software to authorize more users than originally provided for, enabling them to reap a greater profit.

Microsoft said it lost $12.4 million as a result of the fraudulent activity. Several of the workers who abused the internal system have been charged and convicted in federal court.