US Action
The US Department of Justice has initiated a class-action lawsuit and is in the process of obtaining a restraining order against the parties responsible. The DOJ issued several warnings to cease making the alleged fraudulent calls — classified as robocalls — which included impersonating businesses and government agencies. When the accused refused to comply, their conduct was formally characterised as a foreign-based fraud scheme targeting American consumers.
Filings
To date, the DOJ has filed cases against the following business entities:
- Ecommerce National LLC d/b/a TollFreeDeals.com
- SIP Retail d/b/a sipretail.com
As well as their owner-operators:
- Nicholas Palumbo, age 38
- Natasha Palumbo, age 33
Both from Scottsdale, Arizona.
Additional entities named in the filings include:
- Global Voicecom, Inc.
- Global Telecommunication Services, Inc.
- KAT Telecom Inc. (also known as IP Dish)
As well as their owner-operator, Jon Kahen, age 45, of Great Neck, New York.
In each case, the DOJ asked the court to immediately halt the transmission of what it alleges is unlawful robocall traffic. A federal court has already issued a temporary restraining order against one of the accused — Global Voicecom, Inc.
The Dangers of Robocalls
Beyond being a nuisance, these calls constitute acts of fraud that can cause serious financial harm — particularly to elderly and vulnerable members of the American public. There has been a significant surge in this type of activity in recent years, with a large proportion of the calls originating from overseas.
The Fraud
Many of these calls are designed to impersonate government officials delivering urgent or threatening messages to their targets. Common tactics include threatening victims with the loss of their Social Security benefits, alleging tax fraud on the victim’s part, or even insinuating the threat of deportation. Victims are then pressured into paying large sums of money to resolve these entirely fabricated claims.
The technology these callers exploit allows them to reach millions of potential victims every hour. They do this by routing calls through VoIP carriers.
The allegations state that the defendants provided VoIP carrier services to multiple foreign-based criminal organisations, effectively enabling those organisations to impersonate government agencies and legitimate businesses. In this particular case, the accused are alleged to have operated as gateway carriers — acting as the entry point into the US telephone network for calls originating from foreign fraudsters.
The Sheer Scale of the Calls
The DOJ has highlighted the extraordinary volume of calls involved. Using defendant Ecommerce National LLC (TollFreeDeals.com) as an example, the DOJ alleges that this single entity carried approximately 720 million calls within just a 23-day period. Of those, 425 million lasted less than one second in duration — a clear indicator of automated robocall traffic.
The DOJ further alleges that a substantial number of those 720 million calls were fraudulent and made using fake caller identification numbers.
US Attorney Richard Donoghue stated that his office is deploying every available tool and resource to shut down these overseas scam operations. He noted this marks the first time legal action has been taken against US-based entities that were knowingly enabling this type of fraud.
These cases are the result of months of intensive investigative work, and represent a first step in holding accountable those who form the critical link between overseas fraudsters and their American victims. Social Security Administration Inspector General Gail Ennis affirmed that the US will continue its efforts against anyone using the telephone system to deceive and defraud victims through Social Security-related threats.
Have a View on Robocall Fraud? We’d Love to Hear It.
At eTollFree we value the input of our customers and supporters. If robocall fraud has affected your business, or you have questions about how to protect your organisation with a legitimate, compliant toll-free number solution, our team is here to help.