Fergie's Tech Blog

ISP Operators Among 19 Arrested in Cyber-Fraud Case

Robert McMillan writes on ComputerWorld:

The owner of a Dallas-based Internet service provider that was raided last April has been charged with participating in a conspiracy to defraud more than US$15 million from companies such as Verizon, AT&T and XO Communications.

Matthew Simpson, 25, of Red Oak, Texas, is one of 19 people charged in the case, according to a grand jury indictment that was unsealed late last week.

His Dallas company, Core IP Networks, was raided by FBI agents on April 2, 2009. At the time, Simpson claimed that his company and nearly 50 of his customers were the innocent victims of another's actions.

"The only data that I have received thus far is that the FBI is investigating a company that has purchased services from Core IP in the past," he wrote in a note posted to Google Sites on the day of the raid. "This company does not even colocate with us anywhere."

But according to federal prosecutors, Simpson was an active participant in a long-running scam to set up companies that fraudulently obtain lines of credit and then resell telecommunications services before skipping out on the bills.

posted by Fergie @ 1/12/2010 01:00:00 PM