SKIP TO MAIN CONTENT

FBI says text scammers are in Australia

Lavish parties, $US15,000 a night hotel rooms and gambling were funded by a text message scam that reaped tens of millions of dollars, US prosecutors say.

A man using a mobile phone
Source: AAP

2 min read

Published

Updated

Source: AAP


Skip to article content

US authorities have issued arrest warrants for two men in Australia accused of being players in a sneaky text message scam that ripped more than $US50 million ($A65.4 million) off hundreds of thousands of unsuspecting victims.

Michael Pearse and Yongchao Liu were named with four other US-based accused in a criminal complaint in New York on Thursday.

The group, described as insiders working in the text message industry, are accused of creating a scheme in which they could unwittingly charge mobile phone customers $US9.99 per month fees for unsolicited, recurring messages about topics such as horoscopes, celebrity gossip and trivia without the customers' knowledge or consent.

The charge would appear on phone bills in an abbreviated or confusing form and recur each month until the victim realised and attempted to unsubscribe.

"As alleged, by burying relatively small hidden text message service charges in the monthly mobile phone bills of thousands of customers who did not purchase the text message service, these defendants reaped tens of millions of dollars," Manhattan US Lawyer Preet Bharara said.

News that makes sense

Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Bharara, announced the charges along with the Internal Revenue Service and the FBI.

The four US-based accused, Lin Miao, Yong Jason Lee, Michael Pajaczkowski and Christopher Goff, have been arrested.

Pearse and Liu live in Australia and have not been arrested, authorities said.

The criminal complaint describes Pearse as the chief executive of an unnamed company referred to as "Affiliate 1" while Liu was a Java development engineer who Pearse allegedly described in a phone call monitored by authorities as the "tech guy" who "pressed the run button every night".

Some of the $US50 million pocketed from the scam was allegedly used to fund a lavish lifestyle of expensive parties, travel and gambling, with Miao accused of spending $US15,000 per night on a hotel room.

The group has been charged with wire and mail fraud and each facees a maximum 20 years' jail.


Get SBS News straight to your inbox

Sign up now for daily news from Australia and around the world. You can also subscribe to Insight's weekly newsletter for in-depth features and first-person stories.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Follow SBS News

Download our apps

Listen to our podcasts

Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS

SBS World News

Take a global view with Australia's most comprehensive world news service

Stream now

Watch the latest news videos from Australia and across the world