DOJ Takes Action Against Robocall Firms

Earlier this week, the Department of Justice filed for temporary restraining orders and injunctions in two different cases against multiple telecom companies in an attempt to prevent fraudulent robocalls from continuing to plague American citizens.

The first case was filed against defendants Ecommerce National LLC, and SIP Retail as well as their owners Nicholas and Natasha Palumbo. The second was filed against Global Voicecom Inc., Global Telecommunication Services Inc., and KAT Telecom Inc. as well as the owner Jon Kahen.

The DOJ alleged that the defendants have been using voice over internet protocol (VoIP) technology, which allows their clients to place robocalls over the internet as opposed to a traditional phone line. A “robocall” is defined by the DOJ as “a call made through an automated process that places large volumes of telephone calls over the internet in order to deliver recorded messages, in contrast to calls placed one at a time by a live person.”

According to the complaint, “[t]he Corporate Defendants… are VoIP carriers, that serve as “gateway carriers,” facilitate the delivery of millions of fraudulent “robocalls” every day from foreign call centers and foreign VoIP carriers to the U.S. telecommunications system and ultimately to phones throughout the United States. The Defendants thus provide foreign fraudsters the means to access the U.S. telephone system, knowingly passing millions of fraudulent robocalls intended to deceive the recipient into: (I) answering or returning the call, and (2) paying money to the perpetrators of the schemes.”

By using VoIP, foreign fraudsters can place calls from their computer, while appearing as if they are calling from the phone number of specific organization or federal agency within the United States. The DOJ stated, “[i]ndividuals who answer or otherwise respond to these calls eventually speak to live fraudsters who tell the individuals lies intended to frighten and confuse them so that the fraudsters may begin to control their behavior and isolate them from authorities, friends, and family members. These lies often include that the individual’s social security number or other personal information has been implicated in criminal activity, that the individual faces imminent arrest or deportation, and that the individual’s assets are about to be forfeited to the government.”

Common robocall schemes listed by the DOJ include Social Security Administration (SSA), Internal Revenue Service (IRS), and Citizenship and Immigration Services (USCIS) imposters, as well as imposters from foreign governments and tech support.

According to a study conducted last year by the DOJ, schemes executed by robocallers have cost Americans hundreds of millions of dollars. Additionally, the Social Security Administration has received over 465,000 complaints of fraudulent SSA calls within the last year.

With over two million people affected by robocallers last year, most of which were elderly, the federal government is taking telephone fraud extremely seriously. Last December, Congress passed the Telephone Robocall Abuse Criminal Enforcement and Deterrence Act or TRACED Act with tremendous bipartisan support. The act increases penalties on robocallers and requires phone companies to authenticate phone calls to help consumers know if calls are fraudulent.