Great Neck firms facilitated millions of fraudulent robocalls, DOJ says

The U.S. Department of Justice has taken unprecedented action against three Long Island telecommunications companies to stop them from allegedly carrying hundreds of millions of fraudulent robocalls to American consumers, the agency said.

Most of the robocalls originated in India and led to large financial losses for elderly and vulnerable people across the United States, the Justice Department said in a statement.

A judge in U.S. District Court in the Eastern District of New York, in Brooklyn, issued a restraining order against Global Voicecom Inc., Global Telecommunication Services Inc., KAT Telecom Inc., also known as IP Dish, and their owner/operator, Jon Kahen, also known as Jon Kaen, 45, of Great Neck, on Tuesday.

The Justice Department is pursuing similar action against two Arizona companies, Ecommerce National LLC, doing business as TollFreeDeals.com, and SIP Retail, doing business as sipretail.com, and their owner/operators, Nicholas Palumbo, 38, and Natasha Palumbo, 33, of Scottsdale, Arizona.

Kahen could not be reached for comment. Nicholas Palumbo declined to comment.  

The Justice Department is seeking permanent injunctions against all the defendants, as well as a temporary restraining order against those in Arizona.

“This is the first time the Justice Department is enjoining a telecommunications business for facilitating robocalls across its network,” a Justice Department representative said via email.

Operating from residential addresses on Long Island and in Arizona, the five companies are “gateway carriers” that operate as voice-over-internet protocol carriers, which use internet connections instead of traditional copper phone lines, to pass calls from criminal organizations, mostly in India, the Justice Department alleges.

The robocalls “spoof” legitimate phone numbers and send recorded messages falsely claiming to be from U.S. government agencies, foreign governments and well-known, legitimate businesses, according to the court complaints.

The messages falsely claim that the call recipient’s Social Security number has been compromised or is connected to illegal activity, he faces arrest or deportation, his assets have been frozen, his bank and credit accounts have suspicious activity, or a combination of these things, the complaints say.

“When individuals answer the calls or return messages, the fraudsters offer to ‘resolve’ these legal matters by immediate transfers of funds to settle the purported legal obligation, or to hold the individual’s assets only temporarily while the crisis resolves. … Since 2017 and continuing through the present, as a result of their conduct, defendants and their co-conspirators have defrauded numerous victims out of millions of dollars, including victims in the Eastern District of New York,” according to the complaint against the Long Island companies and Kahen.

The defendants received payment from their co-conspirators for providing the gateway services, according to the complaint.

The defendants ignored red flags and warnings about the fraudulent nature of the calls, the Department of Justice said.

“The defendants also allegedly were able to see that the vast majority of the calls they transmitted from their customers in India lasted less than one second, demonstrating that in many instances consumers were rejecting them, and had fake, or ‘spoofed,’ numbers,” Jody Hunt, assistant attorney general for the Department of Justice’s Civil Division, said during a press call Tuesday.

More consumer and law enforcement attention is being focused on robocalls, which have skyrocketed over the last decade because internet technology has made it cheaper and easier to make the calls, said Maureen Mahoney, a policy analyst in the San Francisco office of Consumer Reports.

In 2019, an estimated 58.5 billion robocalls were made to consumers nationwide, a 22.4% increase from the number in 2018, according to YouMail, an Irvine, California-based developer of robocall blocking software.

“I think a big problem is that many of these robocalls are coming from scammers who don’t respect the law, who for many years have been able to avoid enforcement,” Mahoney said.

In December, President Donald Trump signed into law the so-called TRACED Act, which requires telecommunication carriers to adopt a phone number authentication system to prevent call spoofing, at no additional charge to consumers. It also increases penalties for scammers.

Also in December, Gov. Andrew M. Cuomo signed a bill, which had been introduced by Sen. Todd Kaminsky (D-Long Beach), requiring telemarketers to tell their call recipients that they have the right to be placed on a do-not-call list.  The law also prohibits the sharing of callers’ personal information without their consent.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.