Text Messaging Scammers Indicted

According to the feds, "Preet Bharara, the United States Attorney for the Southern District of New York, announced today the unsealing of a superseding indictment (the “Indictment”) charging three additional defendants, FRASER THOMPSON, EUGENI TSVETNENKO, a/k/a “Zhenya,” and FRANCIS ASSIFUAH, a/k/a “Francis Assif,” for their participation in a scheme to charge mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages without the customers’ knowledge or consent – a practice known as “auto-subscribing.”  THOMPSON, who was the Executive Vice President of Operations at a mobile aggregation company based in the United States (the “U.S. Mobile Aggregator”), was arrested this morning in California, and is expected to be presented today in federal court in Los Angeles before United States Magistrate Judge Jean P. Rosenbluth.  TSVETNENKO, who ran at least two different digital content providers based in Australia (collectively, the “Australia Content Providers”), resides in Australia and has not yet been arrested.  ASSIFUAH, who ran a digital content provider based in the United States (“U.S. Content Provider-2”), was previously charged in a criminal complaint and was arrested on April 28, 2016.  Also named in the Indictment were DARCY WEDD, CHRISTOPHER GOFF, MICHAEL PEARSE, YONGCHAO LIU, a/k/a “Kevin Liu,” and YONG JASON LEE, a/k/a “Jason Lee,” all of whom were previously charged for their respective roles in the scheme.

According to the allegations contained in the Indictment unsealed today in Manhattan federal court:[1]

The Auto-Subscription Scheme

From 2011 through 2013, WEDD, THOMPSON, GOFF, PEARSE, LIU, LEE, TSVETNENKO, ASSIFUAH and other co-conspirators engaged in a multimillion-dollar scheme to defraud consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills, without the consumers’ knowledge or consent, through a practice known as “auto-subscribing.”

During the relevant time period, LEE and two other co-conspirators (“CC-1” and “CC-2”) worked for a digital content provider based in the United States that offered premium text messaging services to mobile phone customers (“U.S. Content Provider-1”).  WEDD, THOMPSON, GOFF, and two other co-conspirators (“CC-3” and “CC-4”) worked for the U.S. Mobile Aggregator.  PEARSE and LIU worked for a mobile aggregator based in Australia (the “Australian Mobile Aggregator”).  TSVETNENKO ran the Australia Content Providers, and ASSIFUAH ran U.S. Content Provider-2.  Mobile aggregators compile, or “aggregate,” charges for premium text messaging services – such as monthly horoscopes, celebrity gossip, and trivia facts – on consumers’ mobile phone bills.

In 2011, CC-1 decided to begin auto-subscribing mobile phone users to U.S. Content Provider-1’s premium text messaging services in order to boost U.S. Content Provider-1’s sagging revenues.  CC-1 approached PEARSE and LIU and asked them to build a computer program that could spoof the required consumer authorizations for premium text messaging services – i.e., a program that could generate the text message correspondence that one would ordinarily see if a consumer was genuinely signing up to receive the services.  PEARSE and LIU agreed to build the program (the “Auto-Subscription Platform”), which was operational by in or about the middle of 2011.  In July 2011, CC-1 approached GOFF, who was the account manager for U.S. Content Provider-1 at the U.S. Mobile Aggregator, in order to obtain a large volume of mobile phone numbers to run through the Auto-Subscription Platform.  GOFF sent CC-1 hundreds of thousands of phone numbers, in exchange for payment, for the purpose of auto-subscribing consumers.

In October 2011, CC-1 met with WEDD and told him, in sum and substance, that CC-1 wanted to auto-subscribe consumers through the U.S. Mobile Aggregator’s billing platform and needed additional phone numbers to do so.  WEDD agreed to assist CC-1 in exchange for an up-front payment of approximately $100,000 and a percentage of the auto-subscription proceeds.  WEDD further told CC-1, in sum and substance, that CC-3, who was the Vice President of Compliance and Consumer Protection for the U.S. Mobile Aggregator, would provide phone numbers to CC-1 and that all payments needed to go through CC-3.  WEDD later received his portion of the payments from CC-1 via CC-3.

After CC-1 received phone numbers from WEDD and CC-3, CC-1 passed them on to LEE, the Chief Technology Officer of U.S. Content Provider-1, who was responsible for verifying that the numbers were still valid and active, and for sorting and filtering the numbers to make it easier to run them through the Auto-Subscription Platform.  After LEE performed these functions, CC-1 sent the numbers to PEARSE and LIU to be run through the Auto-Subscription Platform.

In early 2012, CC-4 approached CC-3 and asked to participate in the auto-subscription scheme.  CC-4 told CC-3, in sum and substance, that CC-4 was friends with ASSIFUAH, and proposed that CC-4 and CC-3 begin auto-subscribing customers with ASSIFUAH and U.S. Content Provider-2.  Shortly thereafter, ASSIFUAH began auto-subscribing consumers to phone numbers he had been given by CC-3 and CC-4 through the U.S. Mobile Aggregator.  In total, ASSIFUAH received over $600,000 in gross payments from the U.S. Mobile Aggregator, a significant portion of which came from auto-subscription proceeds.

Also in early 2012, WEDD, THOMPSON, CC-3, and CC-4 had discussions about how to increase revenues at the U.S. Mobile Aggregator, which were flagging because premium text-messaging services had become less profitable.  Among other things, WEDD, THOMPSON, CC-3, and CC-4 agreed to allow TSVETNENKO to begin auto-subscribing consumers through the U.S. Mobile Aggregator.  By no later than April 2012, TSVETNENKO had started auto-subscribing consumers.  Over the course of the next several months through mid-2013, TSVETNENKO and the Australian Content Providers auto-subscribed hundreds of thousands of phone numbers through the U.S. Mobile Aggregator, and generated millions of dollars of revenue, which the defendants apportioned among themselves and were used to fund a lavish lifestyle of expensive vacations and gambling.

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WEDD, THOMPSON, GOFF, PEARSE, LIU, LEE, TSVETNENKO, and ASSIFUAH are each charged with one count of conspiracy to commit wire fraud and mail fraud, and one count of wire fraud, each of which carries a maximum sentence of 20 years in prison.  WEDD, THOMPSON, GOFF, PEARSE, TSVETNENKO, and ASSIFUAH are also each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge."

How did these guys get caught? I am sure people complained to their carriers of unwanted charges. It all starts off with someone complaining about something. How much time are they facing? It depends how much they stole. To see what they can expect in federal court, go 

here...https://www.amazon.com/PRISON-expect-Federal-Bureau-Prisons-ebook/dp/B011GTWLOG