Defendant Sentenced to Serve 48 Months in Federal Prison and Pay Millions in Restitution for Violating the CAN-SPAM Act
DALLAS—Milos Vujanic, 34, who was convicted for his role in what Chief U.S. District Judge Sidney A. Fitzwater previously called “a massive, complicated, multi-year scheme to defraud a large number of victims,” was sentenced this week to 48 months in federal prison and ordered to pay approximately $17.3 million in restitution. Acting U.S. Attorney John Parker, of the Northern District of Texas, made the announcement today.
Vujanic pleaded guilty in December 2014 to a superseding information charging one count of fraud and related activity in connection with electronic mail (CAN-SPAM Act).
A citizen of Serbia, Vujanic was arrested in May 2012, in Paris, France. After a lengthy extradition process, Vujanic first appeared in the U.S. District Court in the Northern District of Texas in April 2014.
Nineteen defendants were originally charged in this massive telecommunications fraud conspiracy. Two of the defendants, Nathan Todd Shafer, 32, of Irving, Texas, and Matthew Norman Simpson, 26, of Red Oak, Texas, were convicted in December 2011 following a 10-week trial before Judge Fitzwater.
Simpson was sentenced to 40 years in federal prison and ordered to pay restitution of approximately $17.6 million and a forfeiture money judgment of the same amount. In addition, the Court also forfeited specific assets such as precious metal certificates worth approximately $3 million and additional cash and computer equipment worth an additional $2 million. Simpson was convicted on one count of conspiracy to commit wire fraud and mail fraud, one count of fraud and related activity in connection with electronic mail, one count of obstruction through destruction of evidence and one count of false registration of a domain name. Additionally, shortly after Simpson’s conviction at trial, the Court entered an order finding that Simpson committed perjury during his testimony.
Shafer, who was convicted on one count of conspiracy to commit wire fraud and mail fraud, was sentenced to nine years in federal prison and ordered to pay approximately $3.3 million in restitution as well as a forfeiture money judgment of the same amount.
Michael Blaine Faulkner, of Southlake, Texas, was sentenced to 30 years in federal prison and ordered to pay approximately $18.2 million in restitution, a forfeiture money judgment of the same amount, and forfeit a host of computer equipment. Faulkner pleaded guilty in October 2011 to one count of conspiracy to commit wire and mail fraud and one count of obstruction through hiding assets. His wife, Chasity Lynn Faulkner, who also pleaded guilty in October 2011 to one count of conspiracy to commit electronic mail, postal mail and wire fraud, and was sentenced to 60 months in federal prison.
According to documents filed in the case Michael and Chasity Faulkner fled to Mexico in 2009 after they learned of the FBI’s investigation into their activities. They lived in Mexico, under assumed aliases, until January 2010 when they were arrested and returned to the U.S. to face charges.
One defendant remains a fugitive and is believed to be living outside of the U.S. Two defendants were acquitted at trial. Of the remaining defendants, all have pleaded guilty and been sentenced.
In March and April 2009, the FBI executed numerous search and seizure warrants at locations including the Faulkner’s residence in Southlake, Faulkner’s business known as Crydon located at 1950 Stemmons Freeway in Dallas, Matthew Simpson’s residence, a business operated by Simpson known as Core IP located at 2323 Bryant Street in Dallas, and at other related businesses.
During trial, the government presented evidence that Shafer, Simpson and their coconspirators conspired to defraud various telecommunications companies including AT&T; Verizon; XO Communications; Excel Communications; Waymark Communications; Bandwidth.com; CommPartners; the lessors of properties at 2020 Live Oak, 2323 Bryan Street and 1950 Stemmons Freeway in Dallas; leasing companies and creditors, including Wells Fargo and AT&T Capital Services; credit reporting agencies; and various other service providers, such as power companies, insurance companies, air-conditioning companies, and website developers and others for goods and services amounting to more than $20 million.
The conspirators also made false representations to obtain goods, such as computers and telecommunications equipment and infrastructure, to include racks to hold computer equipment, generators to provide power for the equipment, and office space to install the equipment, as well as services related to the operation and use of computers and telecommunications. The conspirators created, purchased and used shell companies to hide the identity of the owners or operators of the companies, or the relationships between the companies. The conspirators paid persons including homeless persons for the use of their identities to “act” as the officers, directors or managers of the shell companies. They also used P.O. Boxes, commercial re-mailer services, shell offices, apartments or other physical locations to hide owners’ or operators’ identities or the relationships between the companies. They assumed other identities to hide true ownership of the shell companies and made materially false representations to their victims, by mail, fax, telephone, e-mail or other communications, to obtain goods and services from them. In addition, the coconspirators ran a data center that provided a safe haven for those engaged in the sending of SPAM, hiding the senders’ information from law enforcement and other regulators. Vujanic worked for Faulkner and he assisted in the SPAM fraud by 1) ensuring the networking equipment and computers were operational, 2) setting up the telephone systems in the office; 3) providing false information to creditors; 4) providing false information to regulators such as ARIN (American Registry of Internet Numbers); and 5) providing false information to customers and suppliers.
The case was investigated by the FBI, with assistance from the Texas Workforce Commission, the Texas Secretary of State, the Dallas Police Department, the Southlake Police Department, Dallas Sheriff’s Office, Ellis County Sheriff’s Office, the Duncanville Police Department, the Longview Police Department, the New Orleans Police Department, the American Registry for Internet Numbers (ARIN), the Federal Trade Commission, the Federal Communication Commission and various state public utility commissions.