RoboCallers Hit with Permanent Injunction by Courts

The Eastern District of New York has ruled in the case "United States v. Nicholas Palumbo, et al" effectively putting TollFreeDeals.com and SIPRetail.com out of business.  These are the "Voice Over IP" companies that have allowed millions of overseas calls per day to be routed to Americans, often for the purposes of facilitating fraud, often by imitating either the Social Security Administration or the IRS.  The case, originally filed 28JAN2020 ( 1:2020cv00473) announced their final "permanent injunction" ruling on 26AUG2020, as conveyed by the Office of the Inspector General of the Social Security Administration.  

In the 62-page criminal complaint against the two companies, the government explains that the major fraud types facilitated by the Palumbos were: 

a. Social Security Administration ("SSA") Imposters

b. Internal Revenue Service ("IRS") Imposters 

c. United States Citizenship and Immigration Services ("USCIS") Imposters 

d. Tech Support Imposters -- often claiming to be Apple or Microsoft 

e. Loan Approval Scams

Through the use of the Palumbos' companies, the callers were able to spoof their caller ID to seem to originate from a U.S. Federal government agency, local police department, or technical support organization. 

From October 1, 2018 to September 30, 2019, the SSA received more than 465,000 complaint related to these types of calls and documented losses of more than $14 million.  The Federal Trade Commission's Consumer Sentinel Database documented 166,000 such calls with losses of $37 million just in calendar 2019.  When all types of government impersonation calls were included, the FTC Consumer Sentinel reported 255,223 complaints causing $128 Million in fraud losses in 2018 and 389,563 complaints resulting in $152 Million in fraud losses in 2019!

The Social Security Calls

According to the government's complaint one such robocall, sent to millions of American telephone numbers in early 2019 used this text: 

"Hello this call is from Department of Social Security Administration the reason you have received this phone call from our department is to inform you that there is a legal enforcement actions filed on your social security number for fraudulent activities so when you get this message kindly call back at the earliest possible on our number before we begin the legal proceedings that is 619-XXX-XXXX. I repeat 619-XXX-XXXX.  Thank you."

The Technology 

How does the technology work?  The foreign call center uses Voice Over IP (VoIP) to connect via broadband Internet to a U.S. based telecommunications company called a "gateway carrier."  The gateway carrier then routes the call to a "common carrier" such as AT&T or Verizon.  Because of the need to bill for these services, both the gateway carrier and the common carrier keep logs of these calls. Part of the service provided by the Gateway Carrier is to perform "least-cost routing" - basically real-time auctioning the call so that the call is routed to the cheapest bidder. 

These logs provide: 

timestamp => destination consumer # => gateway carrier => caller-id presented (often spoofed) => downstream customer (usually the foreign call center) .   

In just 23 days in May and June of 2019, TollFreeDeals transmitted more than SEVEN HUNDRED TWENTY MILLION calls!  (720,000,000 calls!!!!)  425 million of these calls lasted less than one second.  More than 24 million of these calls were placed to residents of the Eastern District of New York.

182 Million of these TollFreeDeals calls were originated from a single India-based VoIP carrier co-conspirator in the United States.  One thousand different source numbers accounted for 90% of these calls.  79% of these 1,000 numbers were listed as fraudulent robocall numbers by a robocall blocking company (YouMail).  Of these 143 million calls, 20% were Social Security imposter calls, 35% were loan approval scams, and 14% were Microsoft refund calls. Other calls imitated the IRS, the U.S. Treasury, and additional tech support scams.

In May 2017, Nicholas Palumbo was notified by AT&T and others that his company was routing fraud government imposter calls.  Palumbo promised to block two particular telephone numbers, but continued to allow the others.  

In February 2019, AT&T notified Palumbo that calls spoofing the USCIS and attempting to extort money had been traced to his company.  Again, Palumbo blamed his India-based VoIP carrier customer, even though this was the same company for which he had already received many warnings.  

A telecommunications industry trade association, USTelecom, provided an additional 144 notifications of fraudulent call origination to the Palumbos' companies from May 2019 to January 2020, including 83 SSA Imposter fraud call cases, 24 Tech Support imposter fraud cases, 10 IRS imposter fraud cases, and 1 USCIS impersonation fraud calls.  USTelecom's notices estimated that TollFreeDeals was placing "more than 1 million fraudulent calls per day."  Palumbo logged in to the USTelecom portal and repeatedly indicated the calls had been placed by the same India-based customers of TollFreeDeals.

USTelecom also formally notified SIP Retail of similar traffic, including 35 traceback investigations from August 2019 to January 2020, including 19 SSA Impersonation cases, 3 Tech Support impersonation cases, and 1 USCIS Impersonation case.

Elder Fraud Task Force Reports

To put a human face on the crimes, a Postal Inspector working for the Elder Fraud Task Force in the Consumer Protection Branch of the Department of Justice investigated many example calls facilitated via the Palumbos' companies.

Palumbo received at least nineteen large cash deposits into Wells Fargo Bank accounts that he controlled from May 28, 2019 to September 11, 2019, totalling $130,250.  The deposits were made in Minnesota, South Carolina, Florida, Alabama, and New Jersey.  After each cash deposit, Palumbo would move the funds to his Ecommerce National LLC accounts at JP Morgan Chase. These activities are characterized by the Postal Inspector as "Interstate Funnel Account" transactions, a form of laundering money.

Some of the victims interviewed by the Postal Inspector included: 

J.K - an 84 year old veteran of the US Marine Corps from Belle Harbor, NY.  He received a call claiming to be from the U.S. Marshals Service with a wrarant for his arrest.  He then was told by a "SSA Employee" that someone had used his SSN to rent a car in Texas and that the car was used in drug trafficking and money laundering.  The "SSA Employee" then forced J.K to wire all of the money in his bank accounts to him - $9,800. 

C.E. - a 36 year old man who was a brand-new U.S. citizen.  He was told be "George" from SSA that he was being investigated for money laundering.  He was told to drive to a Best Buy in Queens, NY and buy $700 worth of Hotels.com gift cards. 

L.U. - a man in his 40s from Roosevelt, NY lost $2,200 in an SSA Imposter scam 

More on Call Routing

Another Affidavit related to this case was the Declaration of a Special Agent of the Social Security Administration's Office of the Inspector General, who provided the diagram above to explain the complication of Least-Call Routing Tracebacks. 

From 2016 to 2020, TollFreeDeals.com was offering VoIP termination services specializing in servicing foreign call center call originators.  Their website specifically stated: 

"TollFreeDeals.com is your premier connection for call center and dialer termination.  We are always looking for the best call center routes in the telecom industry.  We specialize in short call duration traffic or call center traffic.  We understand there is a need for it and we want to help you find all the channels you need!" 

They were proud of the number of call minutes they had "terminated" (which means, facilitated the call from VoIP to a Common Carrier call completion.)  As of January 23, 2020, they boasted that they had helped to completed 10,491,500,323 minutes of calls!  That's TEN BILLION MINUTES of mostly fraud calls! 

One of the calls documented by the SSA OIG Special Agent stated: 

"We have been forced to suspend your social security number with immediate effect.  Due to this, all your social benefits will be cancelled until further clearance. In case you feel this is due to an error you may connect with legal [unintelligible] Social Security Administration. In order to connect with a Social Security Administration office, press One now.  In case we do not hear from you, your social will be blocked permanently. To connect with an officer now, press One and you will automatically be connected with the concern departments. We did not receive any input. Dear citizen, in order to speak with Social Security personnel regarding your social security, press One and this automated system will connect you with the officials." 

This affiant establishes that those 1,000 top phone numbers identified by YouMail and confirmed as fraud based on complaints in the FTC Consumer Sentinel database came from 29 unique TollFreeDeals customers.

Many Additional Details 

There were many rounds of filings by the Palumbos' lawyers, all soundly rebutted by the Department of Justice and their investigators, often with the help of industry experts.  One in particular addresses the behavior of "Yodel" ... in a single day, January 20, 2020, Yodel sent more than 6.5 million robocalls through the Palumbos' services.  5.2 million of these calls use "Neighbor Spoofing" which is the practice of assigning a caller id to the call which seems to originate from someone in the same area code and with the same prefix.  

IRS Call Scammers Sentenced in Texas

Back in 2016 we blogged about a major set of arrests in India and the United States related to a call center scam imitating the IRS.  (See "Major Call Center Scam Revealed - 56 Indicted")

This post is to just share an update on that case.  There have been so many arrests made and yet the fraud continues every day!  I received two IRS calls myself in the past week!

To begin, the IRS is NEVER going to call you and threaten arrest.  If you receive such a call, the investigative agency for IRS scams is TIGTA, the Treasury Inspector General for Tax Administration. You can call their scam hotline to report at 1.800.366.4484, or share details online at the IRS Impersonation Scam Reporting form.  All of the arrests below started because someone reported their scammers.  Although the form seems to be focused on people who actually lost money, even non-loss reports can be helpful.

The biggest round of arrests came in October 27, 2016, which was the focus of that "Major Call Center Scam" blog post.  The DOJ press release was titled "Dozens of Individuals Indicted in Multimillion-Dollar Indian Call Center Scam Targeting U.S. Victims
Over the next several months, many of the criminals pled guilty.  All but two were from India, although several were now American citizens.  Each has now been sentenced for their crimes in a mass sentencing before Judge Hittner in Houston, Texas.  Below, we show their guilty plea date, where they were living and/or conducting their crime, and what the DOJ/TIGTA press release said about their guilty plea.  We feel that the sentences were fair, ranging from just over four years to 188 months (15 1/2 years).  

Just wanted to share that EVENTUALLY, Justice is served.

However, PLEASE KEEP REPORTING!  There certainly are more IRS-imitating criminals who need to go to prison!

Bharatkumar Patel (April 13, 2017) - a resident of Midlothian, Illinois - sentenced to 50 months in prison and removal to India. 

According to his plea, beginning in or about July 2013, Patel worked as a member of a crew of runners operating in the Chicago area and elsewhere throughout the country. Patel admitted to purchasing reloadable cards or retrieving wire transfers and using the misappropriated personal identifying information of U.S. citizens. Patel also admitted to opening personal bank accounts in order to receive scam proceeds and payments from defrauded victims as well as creating limited liability companies in his name to further the conspiracy. According to his plea, Patel opened one bank account that received more than $1.5 million in deposits over a one-year period and another bank account that received more than $450,000 in deposits over a five-month period.

Ashvinbhai Chaudhari (April 26, 2017) - a resident of Austin, Texas. - sentenced to 87 months in prison.

According to his plea, since in or about April 2014, Chaudhari worked as a member of a crew of runners operating in Illinois, Georgia, Nevada, Texas and elsewhere throughout the country. At the direction of both U.S. and India-based co-conspirators, often via electronic WhatsApp text communications, Chaudhari admitted to driving around the country with other runners to purchase reloadable cards registered with misappropriated personal identifying information of U.S. citizens. Once victim scam proceeds were loaded onto those cards, Chaudhari admitted that he liquidated the proceeds on the cards and transferred the funds into money orders for deposit into various bank accounts while keeping a percentage of the victim funds for himself. Chaudhari also admitted to shipping money orders purchased with victim funds to other U.S. based co-conspirators, receiving fake identification documents from an India-based co-conspirator and using those documents to receive victim scam payments via wire transfers.

Harsh Patel (May 11, 2017) - a resident of Piscataway, New Jersey. - sentenced to 82 months in prison and deportation after his sentence.

According to his plea, since around January 2015, Patel worked as a runner operating primarily in New Jersey, California and Illinois. At the direction of India-based co-conspirators, often via electronic WhatsApp text communications, Patel admitted to purchasing reloadable cards registered with misappropriated personal identifying information of U.S. citizens. Once victim scam proceeds were loaded onto those cards, Patel admitted that he liquidated the proceeds on the cards and transferred the funds into money orders for deposit into various bank accounts while keeping a percentage of the victim funds for himself. Patel also admitted to receiving fake identification documents from an India-based co-conspirator and other sources and using those documents to receive victim scam payments via wire transfers.

Nilam Parikh (May 18, 2017) - a resident of Pelham, Alabama - sentenced to 48 months in prison 

Since around December 2013, Parikh worked as a runner operating in Alabama.　 In connection with her plea, Parikh admitted that, at the direction of an India-based co-conspirator, often via electronic WhatsApp text communications, Parikh purchased reloadable cards registered with misappropriated personal identifying information of U.S. citizens.　 Once victim scam proceeds were loaded onto those cards, Parikh admitted that she liquidated the proceeds on the cards and transferred the funds into money orders for deposit into various bank accounts, while keeping part of the victim funds for herself as payment.　 Parikh also admitted to sending and receiving scam proceeds to and from her co-conspirators via Federal Express.

Information on the next five all came from the same DOJ Press Release: "Five More Defendants Please Guilty for their Roles in Multimillion Dollar India-Based Call Center Scam Targeting U.S. Victims" 

Dilipkumar A. Patel (May 26, 2017) - a resident of Corona, California - sentenced to 108 months in prison and removal to India. 

Based on the admissions made in his May 26 guilty plea, since late 2013, Dilipkumar A. Patel operated as a runner in and around Southern California, along with other co-defendants based in the region. At the direction of India-based co-conspirators, often via electronic WhatsApp communications, Patel admitted to participating in the purchase of reloadable cards registered with the PII of U.S. citizens, and the subsequent liquidation of victim scam funds loaded to those cards by co-conspirators, while keeping a percentage of the victim funds on the cards for himself. 

Fahad Ali (May 26, 2017) - a resident of Dyer, Indiana (from Pakistan) - sentenced to 108 months in prison 

According to his guilty plea, also on May 26, beginning in or around 2013, Fahad Ali worked as a member of a crew of runners operating in the Chicago, Illinois area, the Southern District of Texas and elsewhere throughout the country. Ali admitted that he first served as a driver for an Illinois-based co-defendant engaging in activities in furtherance of the conspiracy. Ali later operated at the direction of that co-defendant and others, via various means of communication, including text messages, to purchase reloadable cards, and then liquidate victim scam proceeds placed on those cards by India-based co-conspirators, in exchange for recurring payments. Ali also admitted to using false identification documents to receive wire transfers from victims of the fraud.

Hardik Patel (June 2, 2017) - a resident of Arlington Heights, Illinois - sentenced to 188 months in prison and removal to India upon completion of the sentence.

Based on the statements in his June 2 guilty plea, beginning in August 2012, Hardik Patel owned and managed the day-to-day operations of an India-based scam call center before later leaving for the U.S. While in India, in his capacity as a manager, Hardik Patel communicated extensively via email, text, and other means with various India-based co-defendants to operate the scheme and exchange scripts used in the scheme, coordinate the processing of payments from scammed victims, obtain and exchange lead lists used by callers to target U.S. victims, and exchange spreadsheets containing the personal identifying information (PII) of U.S. persons misappropriated by the scammers to register reloadable cards used in the scheme. Hardik Patel also managed worker payroll and kept detailed records of profits and expenses for various associated scam call centers. Hardik Patel continued to communicate with India-based co-defendants about the scheme and assist with the conspiracy after he moved to the U.S. 


Rajubhai Patel (June 2, 2017) - a resident of Willowbrook, Illinois - sentenced to 151 months in prison 

According to his June 6 guilty plea, Rajubhai Patel operated as a runner and assisted a co-defendant in managing the activities of a crew of other runners, based primarily out of Illinois, who liquidated victim funds in various locales in the U.S. for conspirators from India-based call centers. Rajubhai Patel communicated about the liquidation of scam funds via electronic WhatsApp communications with domestic and India-based co-defendants, purchased reloadable cards registered using the misappropriated PII of U.S. citizens that were later used to receive victims’ funds, and used those cards to purchase money orders and deposit them into various bank accounts of co-defendants and others as directed. Rajubhai Patel also admitted to creating and maintaining spreadsheets that detailed deposits, payments to co-conspirators, expenses and profits from the scheme.

Viraj Patel (June 2, 2017) - a resident of Anaheim, California - sentenced to 165 months in prison and removal to India.

According to admissions made in his June 2 guilty plea, Viraj Patel first became involved in the conspiracy between April and September 2013, prior to entering the U.S., when he worked at and assisted with overseeing the operations of a call center in India engaging in scam activity at the behest of a co-defendant. After entering the U.S., beginning in December 2014 Viraj Patel engaged in additional activities in support of the scheme in exchange for a cut of the profits, including serving as a processor of scam victim payments and as a runner engaging in the purchase and liquidation of cards loaded with victim scam funds. Viraj Patel communicated with various India-and U.S.-based co-defendants in furtherance of the conspiracy, and also obtained and circulated lead lists to his co-conspirators containing the PII of U.S. citizens for use by the call centers in targeting victims of the various fraud schemes and to register reloadable cards used to launder the proceeds of the schemes.  

Bhavesh Patel (July 7, 2017) - a resident of Gilbert, Arizona and Alabama - sentenced to 121 months in prison.

According to Bhavesh Patel’s guilty plea, beginning in or around January 2014, Bhavesh Patel managed the activities of a crew of runners, directing them to liquidate victim scam funds in areas in and around south and central Arizona per the instructions of conspirators from India-based call centers. Patel communicated via telephone about the liquidation of scam funds with both domestic and India-based co-defendants, and he and his crew used reloadable cards containing funds derived from victims by scam callers to purchase money orders and deposit them into various bank accounts as directed, in return for percentage-based commissions from his India-based co-defendants. Patel also admitted to receiving and using fake identification documents, including phony driver’s licenses, to retrieve victim scam payments in the form of wire transfers, and providing those fake documents to persons he managed for the same purpose.

Asmitaben Patel (July 7, 2017) - a resident of Willowbrook, Illinois - (previously sentenced to 24 months) 

Based on admissions in Asmitaben Patel’s guilty plea, beginning in or around July 2013, Asmitaben Patel served as a runner liquidating victim scam funds as part of a group of conspirators operating in and around the Chicago area. At the direction of a co-defendant, Patel used stored value cards that had been loaded with victim funds to buy money orders and deposit them into various bank accounts, including the account of a lead generating business in order to pay the company for leads it provided to co-conspirators that were ultimately used to facilitate the scam.

The next seven criminals guilty pleas were announced by the Department of Justice on November 13, 2017 in their press release:  "Last Defendant in the United States Pleads Guilty in Multimillion Dollar India-Based Call Center Scam Targeting U.S. Victims"

Miteshkumar Patel (November 13, 2017) - a resident of Willowbrook, Illinois - sentenced to 240 months.

Based on admissions in Miteshkumar Patel’s plea, beginning in or around 2013, Miteshkumar Patel managed a crew of a half dozen domestic runners involved in the criminal scheme, liquidating as much as approximately $25 million in victim funds for conspirators from India-based call center and organizational co-defendant HGLOBAL.  Patel communicated about the fraudulent scheme with various domestic and India-based co-defendants via email, text messaging and WhatsApp messaging.  Miteshkumar Patel and his runners purchased reloadable GPR cards that were registered using the misappropriated personal identifying information (PII) of unsuspecting victims that were later used to receive victims’ funds, and used those reloadable cards containing victims’ funds to purchase money orders and then deposit those money orders into bank accounts, as directed, while keeping a portion of the scam proceeds as profit.  Miteshkumar Patel also trained the runners he managed on how to conduct the liquidation scheme, provided them with vehicles to conduct their activities in Illinois and throughout the country, and directed a co-defendant to open bank accounts and limited liability companies for use in the conspiracy.  Miteshkumar Patel further admitted to using a gas station he owned in Racine, Wisconsin to liquidate victim funds, and possessing and using equipment at his Illinois apartment to make fraudulent identification documents used by co-defendant runners in his crew to receive wire transfers directly from scam victims and make bank deposits in furtherance of the conspiracy.

Raman Patel (age 82) (November 13, 2017) - a resident of Gilbert, Arizona - (previously sentenced in Phoenix, Arizona to probation, in consideration of his age and his cooperation.)
According to admissions in Raman Patel’s guilty plea, from in or around 2014, Patel served as a domestic runner in and around south-central Arizona, liquidating victim scam funds per the instructions of a co-defendant.  Patel also served as a driver for two co-defendants in furtherance of their GPR liquidation and related activities and sent bank deposit receipts related to the processing of victim payments and fraud proceeds to an India-based co-defendant via email and document scan services offered at various retail stores.

Sunny Joshi of Sugar Land, Texas - sentenced to 151 months in prison for money laundering conspiracy, and 120 months in prison for naturalization fraud.

Rajesh Bhatt of Sugar Land, Texas - sentenced to 145 months in prison and removal to India.

Based on admissions in Joshi and Bhatt’s guilty pleas, beginning in or around 2012, Joshi and Bhatt worked together as runners in the Houston, Texas area along with a co-defendant.  They admitted to extensively communicating via email and text with, and operating at the direction of, India-based conspirators from organizational co-defendant CALL MANTRA call center to liquidate up to approximately $9.5 million in victim funds, including by purchasing GPR cards and using those cards, funded by co-conspirators with scam victim funds, to purchase money orders and deposit them in third party bank accounts, while keeping a percentage of the scam proceeds for themselves as profit.  Joshi has also agreed to plead guilty to one count of naturalization fraud pursuant to a federal indictment obtained against him in the Eastern District of Louisiana, based on fraudulently obtaining his U.S. citizenship.

Jagdishkumar Chaudhari of Montgomery, Alabama - sentenced to 108 months in prison and removal to India.

Jagdishkumar Chaudhari admitted in his plea that between April 2014 and June 2015, he worked as a member of a crew of runners operating in the Chicago area and elsewhere throughout the country, at the direction of Miteshkumar Patel and others.  In exchange for monthly cash payments, Jagdishkumar Chaudhari admitted to driving to hundreds of retail stores to purchase GPR cards to be loaded with victim funds by co-conspirators in India, purchasing money orders with GPR cards that had been funded with victim proceeds, depositing money orders purchased using victim scam proceeds at various banks, and retrieving wire transfers sent by victims of the scheme.  Jagdishkumar Chaudhari is an Indian national with no legal status in the United States, and has agreed to deportation after he serves his sentence as a condition of his guilty plea.

Praful Patel of Fort Myers, Florida - sentenced to 60 months in prison 

In his plea, Praful Patel admitted that between in or around June 2013 and December 2015, he was a domestic runner who liquidated funds in and around Fort Myers, Florida for conspirators from India-based call center and organizational co-defendant HGLOBAL.  Praful Patel communicated extensively via WhatsApp texts with his conspirators.  For a percentage commission on transactions he conducted, Praful Patel admitted to purchasing reloadable GPR cards that were registered using the misappropriated PII of unsuspecting victims that were later used to receive victims’ funds, using those reloadable GPR cards containing victims’ funds to purchase money orders and depositing those money orders into bank accounts as directed, and using fake identity documents to receive wire transfers from victims.

Jerry Norris of Oakland, California - sentenced to 60 months in prison 

According to Norris’ guilty plea, beginning in or around January 2013 continuing through December 2014, he was a runner who worked with conspirators associated with India-based call center and organizational co-defendant HGLOBAL, and was responsible for the liquidation of victim scam funds in and around California.  Norris admitted he communicated extensively via WhatsApp and email with India-based co-defendants including Sagar “Shaggy” Thakar, purchased GPR cards used in the scheme, sent lead lists to conspirators in India that were then used by callers located in the call centers to target potential victims in the telefraud scheme, received scam proceeds via wire transfers using fictitious names, and laundered scam proceeds from GPR cards via ATM withdrawals.

Others sentenced whose guilty pleas were not mentioned above include: 

Montu Barot - 60 months in prison and removal to India after sentence

Rajesh Kumar - 60 months in prison 

Nilesh Pandya - sentenced to three years probation 

Dilipkumar R. Patel of Florida - sentenced to 52 months in prison 

Nisarg Patel of New Jersey - sentenced to 48 months in prison and removal to India.

Dipakkumar Patel, of Illinois, was sentenced to 51 months by Judge Eleanor Ross in Atlanta, Georgia.