Owners of Tech Support Scams in South Florida and Costa Rica Charged With Federal Fraud Offenses
Federal fraud charges were filed this week against owners of two businesses that allegedly conducted an international tech support scam, Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today. Michael Austin Seward, 31, of Deerfield Beach, Florida, and Kevin James McCormick, 45, of Delray Beach, Florida, were named in a superseding indictment that charges them and their former vice president, Grant Clark Wasik, 35, of Boynton Beach, Florida, with 13 counts of wire fraud, as well as conspiracy to commit wire fraud.
According to the indictment, Seward and McCormick owned and operated two tech support scam businesses: Client Care Experts, LLC ("Client Care"), based in Boynton Beach, Florida,1 and ABC Repair Tech, based in Costa Rica. From approximately November 12, 2013, through at least December 9, 2016, the two companies allegedly combined to defraud more than 40,000 people across all 50 States, the District of Columbia, Puerto Rico, several U.S. territories, all ten Canadian provinces, the United Kingdom, and several other foreign countries. At least 57 victims of the alleged scams were located in 22 counties within the Southern District of Illinois, with multiple victims in both St. Clair and Madison Counties. The charged scheme allegedly took in over $25,000,000.
According to the superseding indictment, the defendants purchased pop-up advertisements, which appeared without warning on consumers’ computer screens and locked up their browsers. These pop-ups falsely informed the victims that serious problems, such as viruses or malware, had been detected on their computers. The pop-ups also usually warned the victims that they were at serious risk of losing their data and instructed them to call a toll-free number. When the victims called the numbers shown on their screens, they were connected to Client Care salespersons.
The salespersons allegedly convinced the victims to allow them to have remote access to their computers. Once they had accessed the victims’ computers, the indictments charge, the salespersons examined routine computer functions and processes and then tried to convince the victims that these functions and processes were evidence of problems. The salespersons also ran a system analyzer program on the victims’ computers, but no matter what the program showed, the salespersons allegedly still tried to convince the customers that their computers had serious problems. According to the indictment, the salespersons also concealed from the victims that they could make the pop-ups go away by unplugging or rebooting their computers, and that the pop-ups which had frozen their computer screens were actually advertisements paid for by Client Care.
The superseding indictment alleges that ABC Repair Tech operated substantially the same scheme from its location in Costa Rica.
Seward is alleged to have been the chief executive officer of Client Care, with McCormick as his chief financial officer. Both men allegedly had an ownership interest in Client Care and ABC Repair Tech and oversaw the operations of both entities. Wasik allegedly worked as one of the supervisors on the sales floor (known as a "Team Leader") before being promoted to sales manager and eventually vice president. Trial for all three defendants is set to begin on July 23, 2018, at the federal courthouse in Benton, Illinois, though a defense motion has already been filed seeking to have the case transferred for convenience to East St. Louis, Illinois.
Since April 2017, fourteen other employees of Client Care / ABC Repair Tech have been charged with federal fraud violations in the Southern District of Illinois:
Joseph Ralph Aievoli, IV, 25, of Boynton Beach, FL – Salesperson
Cory Steven Bachman, 25, of Boynton Beach, FL – Salesperson
Andrew Douglas Broad, 26, of Boynton Beach, FL – Director of Recruiting and Training
Ryan Stocker Carr, 23, of Mount Laurel, NJ – Team Leader
Joshua Dennis Cortez, 37, of Lake Worth, FL – Director of Recruiting and Training
Nicholas James Davidson, 26, of Boynton Beach, FL – Salesperson
Patrick M. Dougherty, 35, of Boynton Beach, FL – Salesperson
Tatum Elyse Espenshade, 26, of West Palm Beach, FL – Salesperson
Eric M. Iannaccone, 32, of Monroe Township, NJ – Sales Manager
Anthony Vincent Ludena, 29, of Boca Raton, FL – Salesperson
Robert Thomas McCart, 32, of Boynton Beach, FL – Team Leader
Timothy James Miller, II, 27, of Schwenksville, PA – Salesperson
Jonathan Matthew Richardson, 27, of Lake Worth, FL – Salesperson
Kyle Evan Swinson, 26, of Boynton Beach, FL – Team Leader
All of the defendants against whom indictments have been returned have been charged with conspiracy to commit wire fraud. Under the SCAMS Act, because the crimes allegedly took place in connection with telemarketing and victimized ten or more persons over the age of 55, the maximum penalty is 30 years imprisonment. The defendants can also be ordered to serve up to five years of supervised release after any term of imprisonment, pay a fine of up to $250,000, and pay restitution to the victims.
Seward, Wasik, and McCormick are also charged with thirteen counts of wire fraud. Each wire fraud count carries a maximum sentence of 20 years in prison, a fine of up to $250,000, supervised release of up to three years, and restitution.
An indictment is a formal charge against a defendant. Under the law, that charge is merely an accusation and the defendant is presumed innocent unless proven guilty.
Ten of the defendants charged to date have already pled guilty. On March 8, 2018, Ryan Carr was sentenced to 12 months in federal prison and ordered to pay restitution of $20,384.86. Joshua Cortez was sentenced on May 3, 2018, and ordered to serve 18 months in federal prison and to pay $3,034 in restitution. The remaining defendants who have been convicted have not yet been sentenced.
These cases are part of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service. The cases are being prosecuted by Assistant United States Attorneys Scott A. Verseman, Ranley R. Killian, and Nathan D. Stump.
The Florida Attorney General’s Office is cooperating with the federal investigation. In addition, the Florida Attorney General’s Office brought a civil enforcement action against Client Care for the purpose of ending the fraudulent activities at that business.
The Federal Trade Commission has been working for some time to shut down illegal tech support scams. For more information about the FTC’s "Operation Tech Trap," please go to https://www.ftc.gov/news-events/press-releases/2017/05/ftc-federal-state-international-partnersannounce-major-crackdown.