August 26, 2020

District court shuts down robocall carriers for transmitting fraudulent VoIP calls

On August 25, 2020, Arizona residents Nicholas and Natasha Palumbo and the companies they operate entered into a consent decree permanently enjoining them from providing or causing others to provide call termination services for calls terminating in the United States on behalf of several named companies.  In the complaint, filed in January 2020, the US alleged that the Palumbos, together with co-conspirators, had engaged in predatory wire fraud schemes for at least four years, by knowingly serving as gateway carriers for foreign actors who victimized individuals in the US.  According to the complaint, the defendants marketed their services specifically to foreign call centers, claiming in their advertisements that they specialized in short call duration traffic or call center traffic.  The US alleged that the defendants transmitted hundreds of millions of voice-over-internet protocol calls monthly, enabling fraudsters outside the US to make millions of robocalls “spoofing” US-origin telephone numbers, including numbers that appeared to belong to the Social Security Administration or the Internal Revenue Service.  The complaint further alleges that the defendants even participated in the fraudulent schemes by providing return calling services, and by receiving payment from the proceeds of the fraudulent robocalls. Moreover, according to the complaint, the defendants were warned dozens of times of specific instances of fraudulent call transmission through the defendants’ network, but did not terminate their relationship with entities associated with the fraudulent calls.

Without admitting wrongdoing, the defendants consented to entry of an order permanently enjoining them from committing or conspiring to commit wire fraud under 18 USC §§ 1343 and 1349, and from using the US telephone system to convey robocalls, from providing call termination services,  providing direct-dial or toll-free telephone services for US origin calls, or sending or receiving payment in connection with such calls.

DOJ press release | Consent order | Complaint