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Scam forcing modems to dial premium numbers earns seven-year sentence

New Hampshire’s Asu Pala has been handed an 82-month prison term for a scam that involved installing unwanted dialer software on PCs, then using the software to infect PCs in Germany and call premium telephone numbers. The scam earned Pala some $8 million from 2003 to 2007—authorities originally got turned on to Pala when he bought a second Lamborghini sports car using cash.

Pala, a Turkish immigrant, ran a small Massachusetts ISP called Skhmet. Two other men approached him about running the dialer software, which installs onto unsuspecting users’ PCs using a Trojan program. Once installed, it placed short, high-priced calls to premium phone numbers in Germany. Phone operators would bill the customers, and in turn kicked back some of the proceeds to the two men who introduced Pala to the scheme. Pala then got his own cut.

Although modems have largely dropped out of favor among computer users with the wider availability of broadband connections, dialing scams like this aren’t unheard of, especially in Europe. In 2006 an Austrian court convicted two men who earned an estimated $12 million off a similar scam.

Pala began cooperating with federal authorities in 2009, which significantly reduced his sentence. He has also been working with authorities to try to arrange a sting operation on the two men who introduced Pala to the scam, but he was unable to convince them to come to a meeting—which means they’re probably still out there somewhere, maybe running a similar operation.

In addition to the 82-month sentence, Pala will be required to pay a $7.2 million fine, along with $2.2 million in back taxes.