HELENA – A Montana man being sued by the federal government over $70 million in charges to unsuspecting phone customers’ bills nationwide is now facing criminal counts of wire fraud, conspiracy and money laundering.
The 35-count indictment against Steve Sann was unsealed Wednesday during a settlement conference in a separate civil lawsuit filed by the Federal Trade Commission over the allegations.
Sann, who lives in the western Montana town of Lolo, ran multiple companies from 2006 through 2011 that sold a voicemail and fax service called ConnectMe Voice, according to the indictment.
Sann’s companies signed up customers online and added the monthly charges that ranged from $9.95 to $24.95 directly to their phone bills using billing aggregators that contract with local phone companies to provide billing services, prosecutors said.
According to court documents, Sann’s companies used Internet marketers including Clash Media and DMI Partners that run websites offering people free products or job search assistance.
Website users must first navigate through a series of marketing offers before arriving at the job listings or prize drawing they were seeking. Clicking on those offers to get to the next page signs the user up for the services being offered, including Sann’s voicemail and fax service.
The marketing practices used to sign up customers were “clear and unambiguous,” Sann’s accountant, Robert Braach, said in a statement to the court.
But hundreds of complaints were filed against the Sanns’ businesses with the FTC, the Better Business Bureau and with phone companies after customers noticed the charges on their phone bills. Most said they never signed up for the service and never used it.
When customers complained or phone companies grew suspicious about one of the Sanns’ companies charging phone bills, the customers would be switched over to another one of Sann’s companies and the charges would continue, the FTC said.
Sann’s companies received an average of 450 complaints per month and of the $70 million billed since 2008, they returned more than $40 million after customer challenges, the FTC said.
The FTC civil lawsuit is a separate legal matter from the new criminal charge. The indictment was filed Sept. 12 but had been under seal until last week’s settlement conference.