Australian Michael Pearse jailed in US for mobile text spam scam

A Sydney high flying businessman has been jailed in New York for defrauding hundreds of thousands of people through text messaging fraud.

Michael John Pearse has been jailed in the US. Picture: Supplied

An Australian man who defrauded “hundreds of thousands” of people in a multimillion-dollar text messaging scam will spend more than nine years in an American jail.

Michael Pearse from Sydney was extradited by the FBI to the US earlier this year to face court over the fraud which involved sending thousands of unsolicited celebrity gossip, horoscopes, love tips and trivia to mobile phone users and charging them without their knowledge.

Even if they tried to delete the spam they were still automatically charged up to US$9.99 a month unless they noticed the cost obscurely listed on their bill.

Even then, consumers’ attempts to dispute the charges and obtain refunds were often unsuccessful.

Michael John Pearse accused of being part of a ring that fleeced more than $196 million from American mobile phone users.

As CEO of one company involved in the scheme, Pearse made more than $65 million. The wider conspiracy was suspected to have made $200 million.

US Attorney for the Southern District of New York Damian Williams said it was an international consumer fraud in which hundreds of thousands of mostly American mobile phone users were swindled by 52-year-old Pearse and his unsolicited text message scheme.

He said Pearse, who in Australia denied any wrong doing but then pleaded guilty in the US, was the CEO of Bullroarer, the company that built the computer program in 2011 to auto-enrol victims. Other Australians were also caught in the FBI and Australian Federal Police swoop including a man from Perth and a Sydney-based Chinese national Yongchao ‘Kevin’ Liu.

Another Perth man and high profile Russian tech tycoon and socialite Eugeni ‘Zhenya’ Tsvetnenko, who once paid Snoop Dogg to perform at his birthday, has also last month been extradited to the US to face charges related to the text scam probe. Mr Tsvetnenko, who has been listed in Australia’s top 10 richest people under 40, has denied any wrong doing.

Mr Tsvetnenko and his estranged wife Lydia lived the high life, hosting US rapper Snoop Dogg at Tsvetnenko’s 29th birthday party.

Pearse, who was first charged in 2015, was ordered to hand over more than $13 million in cash as well as his interest in three real properties in Australia and other high end assets, representing proceeds traceable to the fraud. He was sentenced to 109 months jail.

“Thanks to IRS Criminal Investigation and the FBI, as well as our international partners, Pearse was apprehended, prosecuted, and now sentenced for his crime,” Mr Williams said.

To date, nine other defendants Kevin Liu, Lin Miao, Andrew Bachman, Michael Pajaczkowski, Erdolo Eromo, Jonathan Murad, Francis Assifuah, Jason Lee, and Christopher Goff – have pleaded guilty in connection with their participation in the fraud. Two additional defendants, Darcy Wedd and Fraser Thompson were convicted in 2017 following jury trials.