Two men have been extradited to the United States from Australia to face charges over their alleged roles in a scheme to swindle hundreds of thousands of mobile phone users out of more than $US50 million ($64.6 million).
- Michael Pearse and Yongchao Liu face several charges including wire fraud and money laundering
- They are being detained in the United States after being extradited on Monday
- The pair were allegedly part of a mobile phone scheme which unknowingly charged people for a text messaging service
Michael Pearse, a 52-year-old Australian national, and Yongchao Liu, a 33-year-old Chinese national living in Sydney, are being detained after making initial appearances in a Manhattan court on Tuesday.
US Attorney Audrey Strauss accused the defendants and their co-conspirators of using a practice they called “auto-subscribing” to charge monthly fees for unsolicited messages about celebrity gossip, horoscopes, jokes, love tips and trivia, without customers’ knowledge or permission.
“As alleged, Michael Pearse and Yongchao Liu played key roles in an international consumer fraud conspiracy that victimised hundreds of thousands of mobile phone customers to the tune of more than $50 million,’ Ms Stauss said in a statement.
Mr Pearse and Mr Liu were charged with wire fraud, conspiracy to commit wire fraud and aggravated identity theft.
Mr Pearse was also charged with conspiracy to commit money laundering.
Both defendants arrived in the United States on Monday.
Daniel Lynch, a lawyer for Mr Pearse, said his client has pleaded not guilty and will apply for bail at a hearing on February 9.
Mr Liu’s lawyer did not respond to a request for comment by Reuters.
Prosecutors said Mr Pearse was the chief executive and Liu was a Java development engineer for a company called Bullroarer.
According to court papers, Bullroarer was affiliated with Tatto Inc, a company that purchased large numbers of mobile phone numbers to target with messages.
Victims were charged $US9.99 ($12.91) a month even if they ignored or deleted the messages, and were often unaware anything was amiss until unintelligible items such as “96633IQ16CALL8668611606” began appearing on their phone bills, prosecutors said.
The scheme allegedly ran from 2011 to 2013.
Several other alleged co-conspirators have also been charged.
Lin Miao, who prosecutors said ran Tatto, pleaded guilty in a related case in 2015.
A year earlier, Miao and several corporate entities settled related charges by the US Federal Trade Commission, by surrendering more than $US10 million ($13 million) of assets.