An Australian man wanted by the FBI over a multi-million-dollar text messaging fraud has denied the allegations and vowed to fight any attempts to extradite him to the United States.
Michael Pearse was charged along with another Australian man, Yongchao ‘Kevin’ Liu, over the alleged scam, which centred on billing unsuspecting mobile phone customers for unsolicited text messages on subjects such as horoscopes, celebrity gossip and trivia facts.
Pearse and Liu, both believed to be in Sydney, have been charged with conspiracy to commit wire fraud and mail fraud, which carries a maximum term of 20 years in prison in the United States.
Four men were also arrested in the United States and charged with the same offences, two of which face further charges of conspiracy to commit money laundering.
A lawyer for Pearse, Hugo Aston, told the ABC his client denied “any impropriety” and would vigorously defend the charges.
“As for extradition, if and when that arises we’ll defend that vigorously as well,” Mr Aston said.
According to a deposition from a special agent of the United States Internal Revenue Service (IRS), the alleged fraud generated tens of millions of dollars, some of which one of Pearse and Liu’s co-accused, Lin Miao, “spent freely on travel, parties and expensive accommodations”, including one hotel that charged $15,000 a night.
The deposition — tendered to a New York court — alleged Miao and another man, Yong Jason Lee, worked for a company that offered “premium” text messages, while Pearse and Liu worked for an affiliated company.
The final two men, Michael Pajaczowski and Christopher Goff, worked for a “mobile aggregator”, a company that assembled the monthly charges for premium texts and placed them on the customer’s bill.
US authorities allege Miao and others at the text message company bought enormous quantities of phone numbers from Pajaczowski and Goff.
It is unclear if any were Australian phone numbers, but the deposition alleged members of the syndicate tried to acquire Australian and Canadian phone numbers.
It is claimed the accused then worked with Pearse and Liu to send unsolicited messages to mobile phone customers, which they enrolled in the service indefinitely without their knowledge, a practice known as “auto-subscribing”.
The charge of $US9.99 ($12.85) recurred each month unless customers noticed and challenged it.
The deposition states the men tried to conceal the scam by making it appear as if the customer had given their consent to receiving the messages.
IRS agent William Offord said the crime committed was significant.
“The arrests … highlight the magnitude of this complex e-commerce fraud against unwitting consumers,” Mr Offord said.
“Crimes like ‘auto-subscribing’ undermine the integrity of our economic system.”
The deposition also revealed authorities secretly recorded a phone conversation between Pearse and another alleged co-conspirator, who co-operated with authorities in return for a more lenient sentence.
During the conversation, Pearse allegedly said all the money he received from Miao went to a bank account in Hong Kong, and that he hadn’t touched that money because he was too scared to, saying the money “wasn’t real” and that there would be “come back”.
Pearse also allegedly told the co-conspirator the other Australian, Liu, was his “tech guy”, who “pressed the run button every night”.
It is understood US authorities have not yet requested the extradition of Pearse or Liu.
Original Story: abc.net.au