By Jonathan Stempel
NEW YORK (Reuters) – Two men have been extradited from Australia to face U.S. criminal charges over an alleged scheme to bilk hundreds of thousands of mobile phone users out of more than $50 million for unwanted text messaging services, U.S. Attorney Audrey Strauss in Manhattan said on Tuesday.
Both Michael Pearse and Yongchao Liu arrived in the United States on Monday, prosecutors said. The defendants and their co-conspirators allegedly used 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.
Prosecutors said 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 $9.99 a month even if they ignored or deleted the messages, and were often unaware anything was amiss until unintelligible charges 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, including Lin Miao, who prosecutors said ran Tatto.
Prosecutors charged Pearse, a 52-year-old Australian national, and Liu, a 33-year-old Chinese national, with wire fraud, conspiracy to commit wire fraud and aggravated identity theft. Pearse was also charged with conspiracy to commit money laundering.
Lawyers for the defendants could not immediately be located.
Miao pleaded guilty in a related criminal case in 2015. A year earlier, Miao and several corporate entities settled related U.S. Federal Trade Commission civil charges by surrendering more than $10 million of assets.
(Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)
