While operating ICB Telecommunications, also known as Connect America, Gregory Evans of Riverside signed up for 125 toll-free "800" numbers and then resold them to Net service providers. But Evans admits that he never paid AT&T or MCI for the lines--which eventually were cut off--leaving the ISPs to face angry customers and the major phone carriers to foot most of the bill for the scam.
Evans, 33, last Monday entered his guilty plea to federal conspiracy and wire fraud charges, for using false names and billing addresses to run the operation between November 1996 and June 1997. Evans, who had a partner in crime who was not named in the complaint, now faces a maximum of 30 years in prison and up to $1.5 million in fines.
"He was portraying himself as a toll-free number broker and the ISPs paid a few thousand dollars for a number," said Angela Davis, the assistant U.S. attorney who prosecuted the case. "These service providers were harmed because their numbers were shut down in the first month."
The victims--located in various states including Idaho and Oregon--also will have to be repaid. The bulk of the redress will go to AT&T, which was stuck with most of the unpaid bills for Connect America's "800" numbers.
"Restitution is mandatory. He will be ordered to pay the victims in the full amount," Davis added. "He has a whole life ahead of him, if he doesn't have the money right now this obligation stays with him for life."
The Connect America fraud is just the latest Net-related scheme to involve long distance phone companies and their customers.
The infamous Moldova sex site scheme left thousands of visitors to some adult entertainment sites with millions of dollars in long distance phone bills after a computer program secretly disconnected the consumers from their ISPs and rerouted their calls through Moldova, a republic in the former Soviet Union. As a result, unknowing consumers in the United States and Canada were billed more than $2 per minute by their long distance providers.
The Federal Trade Commission shut down the site and settled the case in November of 1997. More than 38,000 U.S. consumers were to receive more than $2.74 million in refunds from the companies that ran the alleged scheme.
Despite regulators' and law enforcement officials' efforts to crack down on Net scams, Davis said the battle is far from over as the various capers are only getting more sophisticated.
She said the defenses to such scams can be simple, and recommended that consumers and companies check the credentials of anyone who offers them a sweet offer.
"Ask a few questions, get references, and be aware of a deal that seems to good to be true," she warned.