Swoop on text scams

Aussies accused of wire fraud

TWO Australian men have been extradited to the United States and formally arraigned on charges they led a scam of sending unwanted SMS texts to hundreds of thousands of phone users to net more than $60 million.

Michael John Pearse, a 52-year-old from Sydney, and Yongchao “Kevin’ Liu, a 33-year-old Chinese national and Sydney resident, were first accused of conspiracy to commit wire fraud six years ago when the US FBI announced they were on their wanted list.

They were identified and arrested with the help of the Australian Federal Police and NSW Police for what US authorities claimed was one of the biggest telecommunication scams in US history.

The pair as well as at least four others were accused of placing unauthorised charges for premium text messaging services on consumers’ mobile phone bills, through a practice known as auto-subscribing.

The unsolicited mail included horoscopes, trivia, “love tips”, jokes and celebrity gossip with phone receivers automatically charged US$9.99 (AUD$12.88) a month unless the customer spotted the fee and actively sought to stop it.

The charges on a bill however were not declared, instead listed with a random series of numbers and letters which may bill payers assumed was a genuine cost. The scam ran from 2011 to 2013.

The FBI said charges that typically appeared on the consumers’ bills in an abbreviated and confusing form with billing descriptors such as “96633IQ16CALL8668611606”.

Even when consumers complained, refund attempts were unsuccessful.

The men had been fighting extradition but appeared in Manhattan federal court overnight.

They were formally charged with wire fraud, conspiracy to commit wire fraud and aggravated identity theft and Pearse was also charged with conspiracy to commit money laundering.

They could face up to 20 years jail.