NEW YORK, NY – In a shocking display of greed and disregard for consumer rights, Michael Pearse, an Australian national, was sentenced to 109 months in prison for his role in a multimillion-dollar text-messaging consumer fraud scheme.
According to the indictment, Pearse and his co-conspirators engaged in a scheme to defraud U.S.-based consumers by placing unauthorized charges for premium text messaging services on consumers’ cellular phone bills. The scheme, which lasted from 2011 to 2013, generated more than $50 million in fraud proceeds, with Pearse personally pocketing over $10 million.
The victims of the fraud scheme, who never ordered the services, were charged $9.99 per month for unwanted premium text messages containing content such as horoscopes, celebrity gossip, or trivia facts. Even when consumers attempted to dispute the charges and obtain refunds, they were often unsuccessful.
Pearse’s company, Bullroarer, created the computer program that was used to enroll victims into the text message services without their knowledge or consent. He worked with co-conspirator Yongchao Liu, a Java Development Engineer, to build the program, which was operational by the middle of 2011.
Through their successful orchestration of the fraudulent scheme, Pearse and his co-conspirators generated more than $50 million in fraud proceeds, with Pearse personally pocketing over $10 million. The scheme was discovered and brought to justice thanks to the tireless efforts of IRS Criminal Investigation and the FBI, as well as international partners.
Pearse was extradited to the United States from Australia in January 2021 and pled guilty to his crimes before United States District Judge Analisa Torres. In addition to the prison sentence, Pearse was ordered to forfeit $10,162,937.96, as well as his interest in three real properties in Australia.
This case serves as a stark reminder of the importance of protecting consumer rights and the devastating consequences of corporate greed. As a nation, we must remain vigilant in our efforts to prevent and prosecute financial crimes that target the most vulnerable members of our society.
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Key Facts
- State: New York
- Category: Cybercrime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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