Ringleaders in Massive Texas Wire Fraud Scheme Sentenced to Federal Prison

1146479_home_key sxchu username mikecco.jpgThe ringleaders of a large-scale scheme to defraud thousands of victims through the internet were recently sentenced to federal prison and ordered to pay restitution. According to federal investigators, as many as 19 individuals conspired to create fake identities and establish shell companies such as Crydon and Core IP that were then used to defraud AT&T, Verizon, and other telecommunications companies out of millions of dollars.

A 26-year-old Matthew Norman Simpson of Red Oak, was sentenced to 40 years in prison and ordered to pay about $17.6 million in restitution after he was convicted of conspiracy to commit wire and mail fraud, false registration of an internet domain name, fraud in connection with electronic mail, and obstruction of justice. Simpson was also accused of perjuring himself during trial and ordered to forfeit approximately $5 million in cash and other assets. Chief U.S. District Judge Sidney A. Fitzwater stated the sentence was imposed after Simpson failed to accept responsibility for or express remorse over his actions. According to the judge, Simpson would likely continue his criminal activity if allowed to go free.

Additionally, 32-year-old Nathan Todd Shafer of Irving was sentenced to seven years in federal prison for his role in the conspiracy. Shafer was also ordered to pay more than $3 million in restitution. He and Simpson were both convicted last fall after a 10-week trial held before the sentencing judge.

A third defendant, Michael Blaine Faulkner of Southlake, was sentenced to serve 30 years in federal prison for conspiracy to commit wire and mail fraud and obstruction of justice. Faulkner pleaded guilty to the conspiracy as well as hiding assets. He was ordered to pay approximately $18.2 million in restitution and to surrender specific computer equipment that reportedly remained in his possession. In October, Faulkner’s wife, Chasity, also pleaded guilty to conspiracy to commit electronic and postal mail and wire fraud. She has not been sentenced. The Faulkners allegedly fled to Mexico in 2009 after it became apparent the FBI was monitoring their activities. The couple was later apprehended in January 2010.

Two of the 19 people accused in the alleged criminal conspiracy have not been located. Two additional defendants were acquitted following a trial and five defendants have now been sentenced. All of the remaining defendants pleaded guilty and are reportedly awaiting sentencing. The alleged wire fraud case was investigated by a number of state and federal agencies including the FBI, Federal Trade Commission, Federal Communication Commission, American Registry for Internet Numbers, Texas Secretary of State, and the Texas Workforce Commission. Additionally, several local law enforcement agencies also assisted in the investigation.

In most instances, federal investigators are required to obtain a search warrant in order to view a suspected criminal’s computer files. Recently, however, the United States Justice Department has successfully required internet service providers (ISP) to preserve and turn over the browsing history of specific individuals. Unfortunately, the information obtained by an ISP cannot demonstrate who was using an internet connection at the time an alleged crime was committed. Even if you are innocent of any wrongdoing, you could still be charged with a crime based on information obtained from your ISP. If you stand accused of a federal cyber crime in the State of Texas, you should contact an experienced criminal defense attorney to aggressively defend you and protect your rights.

If you were accused of committing a federal computer crime in Texas, you need a knowledgeable Sierra Blanca federal cyber crimes lawyer on your side.

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Ninth Circuit Case Questions Authority of Federal Border Agents to Make Traffic Stops in Texas and Nationwide, Texas Criminal Lawyer Blog, August 28, 2012
Additional Resources:

Principal Defendants in Massive Cybercrime Conspiracy to Defraud Telecommunications Companies Sentenced to Lengthy Federal Prison Terms and Ordered to Pay Millions in Restitution, Federal Bureau of Investigation Press Release dated May 25, 2012
Photo credit: mikecco, Stock.xchng