NEW YORK (Reuters) – Two men have been extradited to the United States from Australia to face charges over their alleged role in a scheme to defraud hundreds of thousands of cellphone users over $ 50 million for an unwanted text message service.
Michael Pearse, a 52-year-old Australian citizen, and Yongchao Liu, a 33-year-old Chinese national, were detained after making their first appearance Tuesday in Manhattan federal court.
US attorney Audrey Strauss in Manhattan accuses the defendants and their co-conspirators of using a practice they call “auto-subscription” to charge monthly fees for unsolicited messages about celebrity gossip, horoscopes, jokes, love tips and other trifles, without the customer’s knowledge. or permission.
Pearse and Liu were charged with wire fraud, conspiracy to commit wire fraud and aggravated identity theft, and Pearse was also charged with conspiracy to commit money laundering. The two defendants arrived in the United States on Monday.
Daniel Lynch, Pearse’s attorney, said his client pleaded not guilty, and would propose a bail package at a February 9 hearing. Liu’s lawyer did not respond to requests for comment.
Prosecutors said Pearse was the chief executive and Liu was a Java development engineer for a company called Bullroarer.
According to court documents, Bullroarer is affiliated with Tatto Inc, a company that buys large numbers of cell phone numbers to target with messages.
Victims are billed $ 9.99 per month even though they ignore or delete messages, and often don’t realize something is wrong until incomprehensible items like “96633IQ16CALL8668611606” start appearing on their phone bills, prosecutors said.
The scheme allegedly ran from 2011 to 2013. Several other suspected co-conspirators have also been charged.
Lin Miao, who according to prosecutors running Tatto, pleaded guilty to a related case in 2015. A year earlier, Miao and several corporate entities completed US Federal Trade Commission civil charges relating to surrendering more than $ 10 million in assets.
Reporting by Jonathan Stempel in New York; Edited by Aurora Ellis