NRIs fined $4 mn, jailed for Net fraud

Two Indian-origin men have been sentenced to prison and ordered to pay millions of dollars in compensation for defrauding internet service providers like AT&T and Verizon of over four million dollars through their sophisticated wire fraud scheme.

Vinod Tonangi, 33, of New Jersey and Harjeet Bhambhani, 40, of Pennsylvania, were sentenced to a year and a day and 37 months in prison, respectively.

In addition to the prison terms, US District Judge Peter Sheridan sentenced them to serve three years of supervised release each.

Tonangi was also ordered to pay USD 1.7 million in restitution, while Bhambhani would be required to pay at least USD 4.4 million.

Tonangi and Bhambhani projected themselves as owners and operators of fake companies like Paradise Communications and Airtel Holdings that pretended to be established wholesalers of Voice over Internet protocol (VoIP) services.

The companies were shell companies with no operations, the sole purpose of which was to induce companies that sold VoIP services - including AT&T, France Telecom and Verizon - into providing those services to Tonangi, Bhambhani, and their co-conspirators on credit.

As a result of their conspiracy, Tonangi and his co-conspirators defrauded the victim providers of more than USD 4.4 million in VoIP services.

VoIP services transmit telephone calls over high-speed internet connections rather than over traditional land-based telephone lines.

Tonangi and Bhambhani ultimately sold the VoIP services that they stole to legitimate VoIP wholesalers and shared the profits.

They took several fraudulent steps to make their companies look legitimate and to induce the victim providers to extend credit to them on favourable terms.

They also established fake business addresses for the shell companies at prominent New York locations, including the Empire State Building.

The two created shell company e-mail accounts in the names of non-existent employees for communicating with victim providers, websites that contained false information, such as the names of non-existent employees and the companies' fabricated qualifications to serve as VoIP wholesalers and aliases to negotiate the purchase of VoIP services.

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