In telemarketing, it's called "cramming" - slipping a charge onto a monthly bill without the customer's knowing it. Today, federal prosecutors charged three operators of an Old City Internet company with cramming about $75 million in bogus fees from 350,000 small businesses across the country.
U.S. Attorney Patrick Meehan said the online fraud was massive.
In a 26-count indictment, prosecutors allege that Neal D. Saferstein and two partners "picked the pockets" of small businesses, charging them each $29.95 a month for Internet services they did not want or know about.
"It was the drip, drip, drip of paying $29.95 a month" that added up to revenues of $49 million in one year alone, Meehan said.
Prosecutors said Saferstein, 34, started GoInternet.net Inc. in 1997 and closed it in 2004. He was arrested early this morning at his home in Mount Laurel.
His partners - Tyrone L. Barr, 33, of Philadelphia, and Billy D. Light, 39, of Voorhees - were expected to turn themselves in today.
Saferstein faces criminal charges for perjury, tax evasion, mail and wire fraud, and failure to pay payroll taxes.
If convicted on all counts, he would face 367 years in prison and a maximum fine of $4.71 million.
At one time, GoInternet and its sister company, Mercury Marketing, had 1,000 workers in two Old City offices who made cold calls to small businesses from Florida to Iowa. Telemarketers would dupe customers into receiving a "welcome package" that looked like junk mail and triggered monthly charges unless customers called to cancel, prosecutors said.