Feds Wrangle Six for Cellphone Cramming

     MANHATTAN (CN) – Unwanted text messages about horoscopes, celebrity gossip and trivia soaked consumers for $50 million, federal prosecutors said, unsealing charges against six men across the globe.
     The 30-page complaint in New York charges Lin Miao, Yong Jason Lee, Michael Pearse, Yongchao Liu, Michael Pajaczkowski and Christopher Goff were charged with running an “auto-subscribing” scheme from 2011 through 2013.
     They face up to 20 years.
     The scam entailed sending unwanted texts to “hundreds of thousands of mobile hone customers,” then tucking in nearly $10 a month in cryptic fees on their bills, according to a statement on the charges unsealed Thursday.
     “By burying relatively small hidden text message service charges in the monthly mobile phone bills of thousands of customers who did not purchase the text message service, these defendants reaped tens of millions of dollars,” U.S. Attorney Preet Bharara said in a statement. “Stealing incrementally is stealing nonetheless, and if the allegations are proven, the defendants will have to answer for this massive consumer fraud.”
     Miao and Lee worked for an unnamed texting company that offered premium text-messaging services to mobile phone customers, while Pearse and Liu worked for companies affiliated with that entity, according to the complaint.
     Prosecutors say a mobile aggregator that employed Pajczkowski and Goff acted as the middleman between the texting company and the mobile phone carriers. This aggregator was responsible for assembling the monthly charges for customers who ordered premium text messaging services.
     Pajaczowski and Goff allegedly had access to a large volume of phone numbers by virtue of their work, and prosecutors say Miao and his colleagues paid the men for these numbers, then worked with Lee, Pearse and Liu to send texts to those numbers and enroll them for premium services without their owners’ knowledge.
     Pajaczkowski and Goff also created shell companies to get payments from Miao for the texting company, and tried to hide their scam from their employer through private email addresses like, “thats1spicymeatball@gmail.com” and “very.important.information.123@gmail.com.”
     The men used the money “to fund a lavish lifestyle of expensive parties, travel and gambling,” feds say.
     Miao was arrested Wednesday at Los Angeles International Airport, according to the statement from prosecutors. Lee, Pajaczkowski and Goff were arrested at their homes in California and Texas, authorities said.
     Pearse and Liu live in Australia and have not been arrested.
     Miao, Lee and Goff appeared before U.S. Magistrate Judge Carla Woehrle in Los Angeles on Thursday.
     Pajaczkowski went before U.S. Magistrate Judge Don Bush in Plano, Texas.
     An unnamed co-conspirator copped a deal with feds and pleaded guilty last month to mail and wire fraud, according to the complaint.
     Prosecutors say hundreds of cellphone users have complained to the government about the hidden fees.

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