Australian tech entrepreneur sentenced to more than 8 years for multi-million dollar consumer fraud scheme | USAO-SDNY

0

Damian Williams, the United States Attorney for the Southern District of New York, today announced that EUGENI TSVETNENKO, aka “Zhenya”, a dual citizen of Australia and Russia, was sentenced to 98 months in prison by Judge of American District Analisa. Torres. TSVETNENKO pleaded guilty on February 18, 2022 to his role in a consumer fraud scheme to charge millions of dollars in monthly fees to mobile phone customers for recurring unsolicited text messages on topics including horoscopes, celebrity gossip and trivia, without the customers. ‘knowledge or consent’ – a practice known as ‘automatic subscription’. The part of the fraudulent scheme that TSVETNENKO and his co-conspirators orchestrated defrauded cellphone users of approximately $41.3 million and brought TSVETNENKO and his co-conspirators over $20 million in revenue. TSVETNENKO personally earned approximately $15.4 million from the scheme, which he paid off before sentencing.

US Attorney Damian Williams said: “Eugeni Tsvetnenko and his co-defendants made a fortune by fraudulently charging their clients for text messages they didn’t need or approve of, in a practice called ‘automatic subscription’, then laundering the profits through front companies.” . Tsvetnenko is paying a high price for his mobile scam, as he has already repaid more than $15 million in forfeiture and will now spend 98 months in federal prison.

According to the allegations contained in the replacement indictment against TSVETNENKO, the evidence presented at the trial of co-conspirators Darcy Wedd (Wedd) and Fraser Thompson (Thompson), and other public documents:

Since at least 2012 or circa 2013 until 2013 or circa 2013, TSVETNENKO, Wedd, Thompson and others engaged in a multi-million dollar scheme to defraud consumers by placing unauthorized charges for courier services premium text on consumers’ cell phone bills through a practice known as automatic subscription. TSVETNENKO owned and operated several content provider companies and mobile industry companies in Australia that, among other things, created and sold premium text messaging content to consumers. Wedd operated Mobile Messenger, an American aggregation company in the mobile phone industry that acted as an intermediary between content providers (such as some TSVETNENKO companies) and mobile operators. Mobile Messenger was responsible for collecting the monthly charges incurred by a particular mobile phone customer for premium text messaging services and placing those charges on that customer’s cell phone bill.

Beginning in or around early 2012, Wedd, Thompson, who was the Senior Vice President of Strategic Operations for Mobile Messenger, and two other senior Mobile Messenger executives (CC-3 and CC-4) recruited TSVETNENKO into their automatic subscription system to increase Mobile Messenger revenue. TSVETNENKO agreed and established two new Australia-based content providers, CF Enterprises and DigiMobi, to automatically subscribe to Mobile Messenger’s aggregation platform. CC-3 provided TSVETNENKO with lists of phone numbers, as well as an auto-subscribe “playbook”, which provided TSVETNENKO with tips on how to auto-subscribe without getting caught. The “playbook” described how to conceal the fraudulent scheme by giving the impression that customers had in fact chosen to purchase the text messaging services, when in fact they had not.

Consumers who received the unsolicited text messages typically ignored or deleted the messages, often believing them to be spam. Either way, consumers were billed for receiving the messages, at a rate of $9.99 per month, through charges that typically appeared on consumers’ cell phone bills in an abbreviated and confusing form. , such as with nonsensical billing descriptors that often consisted of random letters and numbers. The $9.99 charge reoccurred each month unless and until consumers noticed the charge and took action to unsubscribe. Even then, attempts by consumers to dispute the charges and obtain refunds from CF Enterprises or DigiMobi were often unsuccessful. Wedd, to whom CC-3, CC-4 and Thompson all reported, oversaw the scheme at Mobile Messenger.

TSVETNENKO, with the help of Wedd, Thompson, CC-3 and CC-4, began auto-subscribing to consumers around April 2012. TSVETNENKO’s auto-subscribing business, which continued into 2013, made hundreds of thousands of mobile phone customers, who automatically subscribed through Mobile Messenger and charged a total of approximately $41,389,725 for unwanted text messaging services. Wedd, Thompson, CC-3 and CC-4 agreed that TSVETNENKO would retain approximately 70% of the self-subscription proceeds generated by CF Enterprises and DigiMobi, and that the remaining 30% of the self-subscription proceeds would be split also between Wedd, Thompson, CC-3 and CC-4.

After obtaining the proceeds of the fraudulent scheme, TSVETNENKO worked with other accomplices to launder the proceeds. TSVETNENKO and his co-conspirators divided the proceeds of the fraudulent scheme between themselves and others involved in the scheme, including having funds transferred through the bank accounts of a series of shell companies and companies held in the name of third of the evenings. This was done to conceal the nature and source of the payments and the participation of TSVETNENKO and his accomplices in the fraud.

* * *

In addition to his prison sentence, TSVETNENKO, 41, from Australia, was ordered to pay a forfeiture of approximately $15.4 million, which he repaid.

Mr. Williams praised the outstanding investigative work of the Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. In addition, Mr. Williams thanked Australia’s law enforcement partners, in particular the Australian Department of the Attorney General’s Central International Crime Cooperation Authority and the Australian Federal Police, as well as the Bureau of International Affairs of the United States Department of Justice, for their significant support and assistance. with the extradition of the accused from Australia.

The prosecution of this case is being handled by the Bureau’s Complex Fraud and Cybercrime Unit. Assistant U.S. Attorneys Jilan Kamal and Olga I. Zverovich are charged with the prosecution.

Share.

Comments are closed.