Jesse Willms, the Dark Lord of the Internet

Wednesday, January 8th, 2014

Jesse Willms went on to become the Dark Lord of the Internet, but even his early scams were quite brazen:

At 16, in 2003, Willms found his first serious business opportunity. He discovered that if he picked up a cheap enough copy of, say, Microsoft Office, he could resell it at a profit through a forum like eBay. He became so good so quickly at flipping software this way that he decided to develop a full-fledged online storefront, which he dubbed eDirect Software. Before long, Willms lost interest in school completely, as, in his mother’s words, “the entrepreneurial spirit took over.” His grades plummeted. By the beginning of 12th grade, Willms was often asking his mother to ferry him home at lunch so he could put in an extra hour of work on eDirect. Finally, they struck a bargain. “I knew that if I made him go to school, it would be a daily fight,” Linda Willms told me. “So we made a deal that if he could make money by a certain time frame, he could drop out of school. If he didn’t, he would take all of his core subjects the next semester.”

But there was never any real question about whether Willms could make money online. Soon, he assembled a staff of nearly a dozen people and opened an office. Before his former classmates even graduated from high school, Willms had shaped eDirect into one of the largest Microsoft resellers on the Web. He also began to acquire a reputation around Sherwood Park as a business prodigy; those who had scoffed at him in school suddenly saw him driving around town in his $280,000 black Lamborghini Murciélago. (Willms also kept a bright-yellow one garaged in Las Vegas for whenever he visited.)

Just as with his later work, Willms’s success with eDirect seemed, on the surface, to be the product of a staggering business talent. The problem was that even then, his greatest gift was for navigating the more shadowy areas of the marketplace—which is why Willms, at 18, became the target of a lawsuit by Microsoft that accused him of trafficking in massive quantities of “counterfeit, tampered and/or infringing” copies of its software.

How, you might wonder, does a teenager achieve something like that? When Willms first launched eDirect, he filled orders on a case-by-case basis: he would find an inexpensive piece of software, sell it online, and clear a $20 or $30 profit. But if he wanted to expand, he would need access to a steadier product supply. Somehow, around the time he first started hiring acquaintances from school to handle customer service and Web design, Willms began obtaining large quantities of Windows-related CD-ROMs—some of which had once been shipped with Dell computers, some of which were of murkier provenance. “It was a gray area,” a former employee told me. “Our job was basically to convince people that it was fine to install this software.”

As eDirect expanded, so did the number of customers complaining about dubious products. “It became a frustrating place to work, because I was the one trying to convince customers that it was fine, but after a while, you’d have to lie to them,” the same former employee told me. “The reason I quit in the end was that we got these copies of Office sent back to us, and the foil on the top saying it was authentic just peeled right off. I said it was clearly pirated, but Jesse was like, ‘No it’s not!’?”

In March 2006, after receiving hundreds of complaints about eDirect-sold software and repeatedly warning Willms to stop selling copyright-infringing products, Microsoft finally sued. What the company found in pursuing the case surprised even its hardened anti-piracy lawyers. “Usually with people involved in counterfeiting and piracy, you see people acting very cautiously, very suspiciously,” says Scott Wilsdon, Microsoft’s lead counsel in the suit. “The opposite was true with Jesse. It looked like he went into this from the outset to grab as much cash as he could as quickly as he could. He seemed to have no concern for the customer and no appreciation of the consequences.”

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