Wednesday, January 13, 2010

19 indicted in 'massive cybercrime conspiracy' - - 9 Jan 2010

U.S. prosecutors indicted 19 people Friday – most in Dallas and Fort Worth – on charges related to a "massive cybercrime conspiracy" that they said defrauded local telecommunications companies and other merchants of $15 million worth of services and goods.

The indictments follow raids by the FBI last year on two data hosting companies where computer servers were taken on suspicion of fraudulent activity. Friday's move expands a Sept. 2 indictment by U.S. Attorney James Jacks that targeted nine people.

Several of those charged are believed to have fled the United States; one, Michael Faulkner of Southlake, is reported anonymously to have been killed trying to re-enter the U.S., Jacks' office said, though that has not been confirmed.

The scheme went from 2003 to 2009 and involved the creation of shell companies through the data hosting companies run by Faulkner, according to the indictment.

The companies used false documents, pretenses and identifications to get services with Dallas-based AT&T Corp. and other large telecommunications providers, which later found they could not get paid for millions of dollars in services, the indictment said. The companies that used equipment owned by Faulkner used false documents and fake identifications to conspire to commit wire fraud against AT&T and others, according to the documents.

Faulkner and his wife, Chastity Lynn Faulkner, remain fugitives. A long Internet post by someone claiming to be Faulkner states that the FBI acted on a tip from a drug-addicted former employee of Faulkner's and that the government had no idea what it was doing when it seized the equipment, hurting several small businesses that had no connection to Faulkner.

In addition to the Faulkners, defendants Jason Watts Carter and William Michael Watts, both of Plano, were identified as fugitives.

Brian Patrick Haney of Plano, Eric Byron LittleJohn of Desoto, Nathan Todd Shafer of Irving, Matthew Norman Simpson of Red Oak and Alicia Nicole Cargill Smallwood of Midlothian made court appearances related to the original indictment. All have been released pending trial, with the exception of Simpson, who remains in custody.

The remaining defendants were arrested this week or live outside the country, the release said.

Each of the 19 defendants is charged with conspiracy to commit wire and mail fraud, which carries a penalty of up to 30 years in prison and up to a $1 million fine. Other charges include fraud, obstruction of justice and destruction of evidence related to the investigation.

Officials raided the Faulkners' residence in Southlake and their Dallas business, Crydon, in March and April.

Searches also were conducted at Core IP, a Dallas business related to the investigation.


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