WASHINGTON – The U.S. District Court for the Eastern District of New York has permanently barred two individuals and two companies that transmitted massive volumes of fraudulent robocalls from operating as intermediate voice-over-internet-protocol (VoIP) carriers conveying telephone calls into the U.S. telephone system, the Department of Justice announced today. The consent decree entered yesterday by United States District Judge Eric R. Komitee resolves a civil complaint brought by the United States Attorney’s Office for the Eastern District of New York and the Department’s Consumer Protection Branch.
As alleged in a civil complaint filed earlier this year, in United States v. Nicholas Palumbo, et al., spouses Nicholas and Natasha Palumbo of Scottsdale, Arizona, and their companies, Ecommerce National LLC d/b/a TollFreeDeals.com and SIP Retail d/b/a sipretail.com, received millions of internet based calls every day from other entities, often located abroad. The defendants transmitted those calls first to other carriers within the United States, and ultimately to the phones of individuals, knowing that the calls were fraudulent government and business-imposter robocalls.
Many of the robocalls were made by individuals impersonating government investigators conveying false and alarming messages, such as the victim recipient’s social security number or other personal information had been compromised or otherwise connected to criminal activity, the recipient faced imminent arrest, the recipient’s assets were being frozen, the recipient’s bank and credit accounts had suspect activity, the recipient’s benefits were being stopped, and the recipient faced imminent deportation – each designed to frighten the recipient into paying large sums of money. Often the numbers that appeared as the originating or caller-ID numbers were “spoofed” to make it appear that they originated from legitimate government or business offices in the United States when in fact they were made by overseas scammers, often located in India. The defendants also sold to foreign call centers toll-free and other U.S. numbers that were left in fraudulent robocall messages on victims’ phones to deceive them into believing that the calls were legitimate and originated in the United States. These calls led to significant financial losses to victims throughout the United States and the Eastern District of New York, many of whom were elderly and vulnerable.
“The consent decree is a milestone in protecting the public, especially elderly and other vulnerable persons, from predatory robocall schemes that can cause catastrophic losses to victims in this district and throughout the country,” stated Acting United States Attorney Seth D. DuCharme.
“The Department is committed to protecting vulnerable Americans, particularly America’s seniors, from those who seek to steal their hard earned savings,” stated Acting Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division. “The Department will prosecute both those who place fraudulent robocalls, and those who knowingly facilitate such calls for profit. The Department recognizes the exceptional work of the Social Security Administration and Postal Inspection Service in investigating this case.”
“The Court’s decision sends a clear message to gateway carriers who knowingly do business with scammers targeting Americans from overseas,” stated Gail S. Ennis, Inspector General for the Social Security Administration. “We will continue to pursue those who facilitate these scam calls by allowing them into the U.S. telephone network. I want to thank the Department of Justice for its support throughout this investigation and its commitment to protecting Americans from this insidious form of fraud and theft.”
Under the terms of the consent decree entered yesterday, the defendants agreed to be permanently barred from using the U.S. telephone system to deliver prerecorded messages through automatic means, carrying VoIP calls destined for phones in the United States, and providing any U.S. phone numbers to other individuals or entities. In addition, the defendants are permanently barred from serving as employees, agents or consultants to any person or entity engaged in these activities.
This case was handled by Assistant U.S. Attorneys Bonni Perlin and Dara Olds of the United States Attorney’s Office for the Eastern District of New York and Trial Attorneys Ann F. Entwistle and Charles B. Dunn of the Civil Division’s Consumer Protection Branch, in coordination with the Social Security Administration Office of the Inspector General and the U.S. Postal Inspection Service. Investigative support was also provided by the U.S. Treasury Inspector General for Tax Administration, U.S. Immigration and Customs Enforcement’s Homeland Security Investigation’s El Dorado Task Force and U.S. Secret Service. The Federal Trade Commission and the Federal Communications Commission also provided pertinent data.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.