p2pnet news view | Crime:- Last week Karl Bode noted on dslreports how an FBI raid on a Dallas data center disrupted business for around fifty companies — including DSL provider Lighning Bolt Technologies, “who told us their users couldn’t authenticate with the RADIUS server held at the location”.

Companies impacted had guessed the raid was because of the Wolverine leak, he says, going on »»»

However, the FBI Warrant (pdf) has since been unsealed, and indicates the raid had to do with a VoIP scam being perpetrated against AT&T and Verizon.

The document gets interesting around page 11:

On or about January 26, 2009, Verizon officials contacted the FBI and reported they were the victims of a fraud for in excess of $1,000,000. Verizon officials advised they believed AT&T had also been victimized by the same fraud for similar losses. During a teleconference between Verizon/AT&T fraud investigators and myself, investigators explained that they believed a group of individuals working together had defrauded them of over 120,000,000 physical connectivity minutes valued at $6,000,00 in a three to four month period and that these individuals had charged their customers $.01 per minute, for a profit of $1,200,000.

At the heart of this scam attempt is a man named Mike Faulkner, who the warrant alleges tried to con both AT&T and Verizon under the umbrella of a number of companies, including an outfit called Premier Voice Inc. and/or Premier VoIP. According to the warrant, the FBI investigators traced the scam to four individuals (listed on pages 20 & 21), one of which (Faulkner) the FBI alleges has a long history of software piracy and scams.

The allegations against Faulkner in the warrant run pretty deep and include spam, software piracy, and similar scams run against XO Communications back in 2005 and 2006. On page 28, the FBI notices that Faulkner’s home Verizon connection has outbound traffic five times higher than inbound. Faulkner, who goes by the handle of “CygonX” online, is well-known in VoIP scambuster circles. Google quickly brings up example correspondence between an abrasive Faulkner and annoyed, unpaid companies from last June..

Ultimately, FBI agent Allyn Lynd concludes that Faulkner and others are responsible for bilking AT&T and Verizon out of millions, and that evidence of the activities was suspected at the Dallas data center:

Based on my training and experience and my discussions with AT&T/Verizon officials, I know that the computer equipment installed by AT&T and Verizon at 2323 Bryan Street, Cabinet 24.02.900, Dallas, Texas, 75201, contains evidentiary information of the fraud, including bandwidth usage. Further, I also believe there is evidence of the fraud on the computer equipment abandoned by Premier Voice at this location, including transactional records which will further detail the fraud involved.

The warrant makes little reference to Matthew Simpson, CEO of Core IP Networks, who last week blogged about the FBI raid at his office,” says Karl, adding:

“On page 23, the warrant references the use of an informant who claims Faulkner and Simpson met at one of Faulkner’s offices, though he doesn’t appear directly tied to criminal activity. The tail end of the warrant explores the careful procedures necessary to obtain computer data — though the multi-day outage suggests the actual FBI acquisition of this data wasn’t particularly delicate.”

VoIP scam – Dallas FBI Raid About VoIP Scam, Not Wolverine, April 7, 2009

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This entry was posted on Wednesday, April 8th, 2009 at 12:35 pm and is filed under Crime. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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