Essentially we would rather that our software not be used to commit fraud, particularly as the client in question is refusing to pay for it (we are using a money claim online to try and get payment, but doubt it will be successful as his dual Aus. citizenship means he can just leave the country).
Additionally he has made misrepresentations to us and is now trying to strong-arm us into doing more work whilst trying to deny or significantly reduce payment.
There is slight benefit to us in that we have an IPR agreement with him that prevents us developing similar works, and we have a lot of know-how invested in the given development area, but primarily it is because we feel that we too have been defrauded and would prefer he not continue to benefit from it.
The restriction on creating similar works survives termination of the agreement, however occurring.
We don't know that it is deliberate fraud, so much as greed, overselling, and trying to trade out of insolvency. He must, however, be aware of the failure rate, and that at least 90% of the sales he makes will fail to recover their investment.
Additionally we informed him a couple of months back that due to the lack of essential maintenance and server software updates we no longer considered the site secure or fit for purpose (it isn't). This is of concern as it does process hotel bookings, including personal and credit card details. There was no attempt to address this, and he has continued to make sales.
No, would that be purely because we believe the system is insecure, or because it is unpaid?
Ideally, of course, we would like to be paid for the work done.
However, we consider it unlikely that we are going to have much luck with that. We do believe that the directors have the personal assets to cover the debts, and there is a large overdrawn director's loan making them liable. Unfortunately we also strongly suspect that they are in the process of selling up in order to move to Australia, where they have dual citizenship.
That being the case we would rather that the large profits they have made selling software services they haven't paid for, to people who aren't going to benefit or recover their investment, not be entirely without repercussions.
We do realise that trying to pursue moral or ethical (rather than purely financial) matters via the legal system isn't likely to meet with any success, and that it may in fact scupper what little chance there is of us getting compensated. It is an option we would like to know the viability of, rather than a course of action we are fixated on.
If we send a solicitor's letter based on the site being insecure / not fit for purpose it seems they could just ignore it by cutting our access to the server and claiming that they had had someone else deal with the issues (regardless of whether they had or not).