Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that FRASER THOMPSON was sentenced today to five years in prison for his participation in a fraudulent 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.” The fraud committed by THOMPSON and his co-conspirators resulted in the theft of over $100 million from consumers throughout the United States. THOMPSON was convicted by a jury on September 5, 2017, following a three-week trial, and was sentenced today in Manhattan federal court by the Honorable Katherine B. Forrest.
Manhattan U.S. Attorney Geoffrey S. Berman said: “This was a gross ‘main street’ fraud. Fraser Thompson and his co-defendants engaged in ‘auto-subscribing,’ forcing mobile phone users to pay for unsolicited and unwanted text messaging services. They ripped off everyday cellphone users, $10 a month, netting over $100 million in illegal profits, of which Thompson personally received over $1.5 million. Thanks to the diligence of the IRS and FBI, consumers are being safeguarded and perpetrators of large-scale criminal frauds are being arrested, prosecuted, and convicted.”
According to the Superseding Indictment filed in Manhattan federal court, the evidence presented at trial, and statements made in connection with THOMPSON’s sentencing:
THOMPSON was the Senior Vice President of Strategic Operations at Mobile Messenger, a mobile aggregation company. In the relevant time period, mobile aggregators like Mobile Messenger compiled, or “aggregated,” charges for premium text messaging services – such as monthly horoscopes, celebrity gossip, and trivia facts – on consumers’ mobile phone bills. Between 2011 and 2013, THOMPSON and others engaged in a massive scheme to defraud ordinary consumers by placing unauthorized charges for premium text messaging services on their cell phone bills, through a practice known as auto-subscribing.
The auto-subscribing scheme essentially involved two main players in the cell phone industry: mobile aggregators, such as Mobile Messenger, and content providers, which sent consumers the unwanted text messages that ultimately resulted in them being billed for services they had not authorized. Mobile Messenger worked with four different content providers in the scheme, each of which were essential to the scheme’s success. THOMPSON participated in auto-subscribing through two of those content providers, CF Enterprises and DigiMobi, which were operated by one of THOMPSON’s co-conspirators, Eugeni Tsvetnenko, a/k/a “Zhenya.”
The plan to auto-subscribe with Tsvetnenko came about in early 2012, in connection with discussions between THOMPSON and three other Mobile Messenger executives, co-conspirators Darcy Wedd, Erdolo Eromo, and Michael Pajaczkowki, a/k/a “Paj,” about how to increase revenue at Mobile Messenger in the wake of the decreasing profitability of premium text messaging services. Tsvetnenko had been kicked off Mobile Messenger’s aggregation platform in the past due to suspicious subscribing practices, including past incidents of auto-subscribing. Nevertheless, in early 2012, THOMPSON, Wedd, Eromo, and Pajaczkowski agreed to allow Tsvetnenko to establish two new content providers, CF Enterprises and DigiMobi, to conduct a scheme to auto-subscribe on Mobile Messenger’s aggregation platform.
THOMPSON, Wedd, Eromo, and Pajaczkowski agreed to a revenue split with Tsvetnenko, pursuant to which Tsvetnenko would keep approximately 70% of the auto-subscribing proceeds generated by CF Enterprises and DigiMobi, and the remaining 30% of the auto-subscribing proceeds would be divided evenly among THOMPSON, Wedd, Eromo, and Pajaczkowski. THOMPSON, Wedd, Eromo, and Pajaczkowski also devised a method of receiving and distributing the auto-subscribing money through multiple layers of shell companies, in an effort to conceal the nature and purpose of the money. These auto-subscribing activities with Tsvetnenko, which began in approximately April of 2012, and continued into 2013, resulted in hundreds of thousands of mobile phone users being auto-subscribed through Mobile Messenger. THOMPSON, moreover, personally received over $1.5 million in fraud proceeds as a result of his participation in the illegal scheme.
The auto-subscription scheme, through all of the content providers that it involved, affected millions of consumers and generated over $100 million in criminal proceeds.
* * *
To date, seven defendants, Andrew Bachman, Lin Miao, Pajackowski, Eromo, Jonathan Murad, Francis Assifuah, and Jason Lee have pled guilty in connection with their participation in the fraud. One additional defendant, Wedd, was convicted by a jury on December 15, 2017, following a two-week trial.
In addition to the prison term, THOMPSON was sentenced to three years of supervised release, and ordered to forfeit $1,552,114.56.
Mr. Berman praised the investigative work of the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation, and expressed his sincere gratitude to the Federal Trade Commission for their support and assistance with the investigation.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to:
http://www.usdoj.gov/usao/nys/victimwitness.html.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Sarah E. Paul, Richard Cooper, and Jennifer L. Beidel are in charge of the prosecution.
Did you know that Erdolo Eromo is Shuki Levy son in law, yes the guy that helped create Power Rangers. Actually Erdolo Eromo and his criminal partners helped finance Shuki Levy and his wife Tori Levy in the making of many projects. Shuki Levy and his wife Tori Levy even used some of that dirty money taken from hard working families to finance the Einstein foundation. Shuki Levy and his wife Tori Levy are just as guilty as their son in law. The only difference is that they didn’t get caught helping laundering all of that money. Shuki Levy and his wife Tori Levy helped Erdolo Eromo hide 150 million dollars stolen from every day people. What a shame! I will never let my children watch Power Rangers.
Erdolo Eromo is the son in law of Shuki Levy and Tori Levy. They were partners with Erdolo Eromo, Fraser Thompson and Darcy Wedd in a company called Neshi productions LLC. Shuki Levy and Tori Levy helped Erdolo Eromo and his partners launder over $20 million dollars in dirty money by putting it through a TV and film company. How come Shuki Levy and Tori Levy have never been charged in connection with this text scam?