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FTC Wraps up Major Phone Cramming Case as Remaining Defendants Settle Charges

posted Jun 23, 2017, 11:39 AM by Resty Manapat

Defendants behind American eVoice are banned from all landline or mobile telephone billing 

The remaining defendants behind a massive landline cramming operation agreed to settle Federal Trade Commission charges that they placed more than $70 million in unauthorized charges on consumers’ phone bills. 

The settlements with defendants Steven Sann, Terry Lane, and the corporate defendants who operated the scheme, resolve the remaining charges the FTC brought against American eVoice, Ltd., eight other companies, and four individual defendants. 

In its complaint, the FTC alleged that the operation placed charges ranging from $9.95 to $24.95 per month on consumers’ landline phone bills for voicemail services they never signed up for and never even knew they had. 

The lead defendant, Sann, his wife Lane, and the corporate defendants have now agreed to settle the FTC’s charges. Robert Braach, an accountant who provided financial and management services for the scheme, settled similar charges in November 2016. 

Under the terms of the settlements, the defendants are permanently banned from all telephone billing, landline or mobile. The orders also ban all defendants from unauthorized billing in general. 

The settlements with Sann, Lane, and the corporate defendants impose judgments of $41.9 million that are either partially or entirely suspended based on an inability to pay.  Under the terms of the settlements, Sann will have to forfeit more than $500,000 in ill-gotten funds that he used to fund his IRAs, and he will also surrender an Infiniti Q56 and a Nissan 350Z.  Most of Sann’s other assets have already been transferred to the Chapter 7 Trustee administering his bankruptcy estate.  In a parallel criminal case brought by the United States Attorney for the District of Montana, Sann pleaded guilty to criminal charges of money laundering and wire fraud and was sentenced to two years in prison. 

The settlement with Braach imposes a judgment of $71 million that was suspended after Braach transferred $75,000 to the Commission.  In the future, if any of the defendants are found to have misrepresented their financial condition, the entire amount of the respective judgment will become due as to those defendants. 

The Commission vote approving the proposed stipulated final orders against Sann, Lane, and the corporate defendants was 2-0. It was filed in the U.S. District Court for the District of Montana, Missoula Division. 

The Commission voted 3-0 to approve the stipulated final order against Braach, and the District Court judge approved and signed it in January 2017. 

NOTE:  Stipulated court orders have the force of law when approved and signed by the District Court judge. 

The FTC appreciates the assistance provided in these cases by the Better Business Bureau Northwest; the Montana Department of Justice; and the Federal Communications Commission.


Source: FEDERAL TRADE COMMISSION

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