Eric Lundgren - a California e-waste activist - is headed off to federal prison for the next 15 months for making 28,000 Windows restore disks and selling them. Intended for the purpose of extending the lives of old PCs, he sold them for $0.25 a piece, although the prosecution claimed that they were worth $25 each.
Originally though, it was claimed that the disks were worth $299 each and the prosecution claimed that it cost Microsoft $8.3 million in sales. But the disks did not come with an actual license for Windows; your PC needed to already be licensed to use the disks, so it was determined that each one wasn't worth the price of a full license.
At some point, U.S. customs became aware of what was going on, and seized a shipment of the disks in 2012. The broker in Florida, Robert Wolff, purchased the disks for $3,400 as part of a government sting. Both men were arrested, but Wolff received a plea deal and got six months of house arrest.
2012 was around the time that Windows 8 came out, so at that time, there was no Media Creation Tool, or a simple and easy way of downloading a recovery image for Windows. At the time, the easiest way to get a recovery image was to order a disk from your OEM, if you didn't have the one that came with your PC.
Microsoft issued a statement to The Washington Post, saying the following:
“Microsoft actively supports efforts to address e-waste and has worked with responsible e-recyclers to recycle more than 11 million kilograms of e-waste since 2006. Unlike most e-recyclers, Mr. Lundgren sought out counterfeit software which he disguised as legitimate and sold to other refurbishers. This counterfeit software exposes people who purchase recycled PCs to malware and other forms of cybercrime, which puts their security at risk and ultimately hurts the market for recycled products.”
Indeed, while the software itself might be somewhat useless without a product key, Lundgren still didn't have the right to distribute it and accept money for it.