VOIP fraudsters arrested

Internet protocol (VOIP) fraud scheme that netted more than $4.4 million, The Wall Street Journal reports.

US district judge Peter Sheridan sentenced Vinod Tonangi to a year and a day in prison, while Harjeet Bhambhani received a 37-month term. They were also ordered to serve three years of supervised release, and Tonangi owes $1.7 million in restitution.

Both men pleaded guilty to one count of conspiracy to commit wire fraud by selling stolen VOIP services to telecoms companies including AT&T and Verizon Communications, Fox Business states.

Tonangi, Bhambhani and their alleged co-conspirators were accused of using shell companies to persuade large VOIP wholesalers to provide them phone services on credit. The fraudsters then resold the services to other telecoms companies for profit.

The fake companies, known as Paradise Communications, Reach Communications and Airtel Holdings, had no operations, and did not provide the services they purported to offer, 4-traders says.

The defendants backed up the companies' image using fake business addresses, shell company e-mail accounts with names of non-existent employees and fabricated financial reports.