Defendants Barred From Obtaining or Selling Consumers’ Phone Records to Third Parties

The Federal Trade Commission has put a permanent halt to an operation that allegedly obtained consumers’ confidential phone records without their knowledge or consent and sold them to third parties. The defendants are barred from obtaining consumers’ telephone records without their consent and court orders impose judgments on the defendants totaling more than $600,000 – the estimated amount of their ill-gotten gains.

This is the latest in a series of FTC cases targeting telephone pretexters – individuals who use false pretenses to obtain consumers’ confidential information. Since 2006 the FTC has charged sixteen individuals and their corporations with violating federal law by pretexting to obtain phone records of third parties. All have now been barred from pretexting and all have been ordered to give up the money they made engaging in the illegal practice.

In February 2007, the FTC asked a U.S. district court to order a permanent halt to the operations of a company that sold consumers’ confidential phone records, including information on calls placed and received. The FTC also sued the individuals who had used false pretenses to obtain the records from phone companies and then supplied those records to the company for a fee. The agency alleged these practices were unfair and deceptive in violation of federal law, and could endanger consumers’ safety. The agency also asked the court to order the defendants to give up their ill-gotten gains.

According to the FTC complaint, the Telecommunications Act of 1996 provides that a customer’s phone records may only be disclosed “upon affirmative written request by the customer.” But the agency alleged that since at least 2005 Action Research Group, Inc., and its principals, Joseph and Matthew DePantes, sold confidential customer phone records, including lists of calls made and the dates, times, and duration of the calls, to third parties, without the knowledge or consent of the customers. To get the records, these defendants relied upon the other defendants, Eye in the Sky Investigations, Inc., Cassandra Selvage and Bryan Wagner, who obtained them from phone companies through “pretexting” – using “false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as an account holder or as an employee” of a phone company. Selling the records constitutes an invasion of privacy that could endanger the health and safety of consumers, the agency alleged.

The DePantes and ARG agreed to settle the FTC charges. Defendants ESI, Cassandra Selvage, and Bryan Wagner are subject to default judgments entered by the court.

The settlement and default judgments permanently bar the defendants from obtaining, marketing or selling customer phone records or consumers’ personal information derived from those records. They also bar the defendants from pretexting or using others to pretext to obtain consumers’ information. The settlement order entered a judgment in the amount of $67,000 against the DePantes and ARG, the estimated amount of ill-gotten gains the defendants earned from their illegal scheme; the judgment was suspended upon a payment of $3,000 based on the defendants’ inability to pay. In the default judgments, the court ordered Wagner to give up $428,085 in ill-gotten gains and ESI and Selvage to give up $110,762.

The Commission vote to accept the settlements was 5-0. They were filed in U.S. District Court for the middle district of Florida, Orlando division.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendant of a law violation. Consent judgments have the force of law when signed by the judge.

What are your comments in this topic?

Jimmie Mesis, Editor-in-Chief
PI Magazine

Here’s a very positive story about a PI firm in California that was working on a local case stumbled upon a teen MySpace cyberstalker. As a result of their investigation, Lee County Sheriff’s Office made an arrest in the Southwest Florida county.

The private investigators found a web page for a Southwest Florida teen who deputies say made some very serious threats. The web page was allegedly put together by a teen that goes by the user name, Bloody Bon3. The teen is now charged with cyberstalking for using MySpace to threaten other people.

More details can be read here.

Don’t mess with Louisiana private-eye Stephanie Ware. She received a ticket in the mail with the phrase “official government business” on the envelope. After further investigation she determined that the company who sent this notice was a non-governmental entity. This raised red flags for Stephanie and also for the US Postal Service. It is possible that this company may have violated a statute prohibiting mail that implies a false connection with the federal government as (39 USC Section 3001).

As a result of Stephanies complaint, it is being reported that the United States Postal Inspection Service is now collecting evidence to determine whether a photo enforcement vendor violated mail fraud statutes.

The Louisiana State Board of Private Investigator Examiners is also currently investigating whether Redflex has violated a state law requiring a private investigator licenses for anyone in the business of providing photographic evidence for use in court cases.

If you have been the victim of a similar notice by this company you can join the fight by visiting ReportRedflex.com

Bill Clutter’s work as an Illinois private investigator has helped to free two men and is a perfect example of the how investigators in the private sector are an asset to the public.

Bill is also the director of investigations for the Downstate Illinois Innocence Project at the University of Illinois at Springfield.

“Most of the evidence was uncovered in the spring of 1992,” Clutter said, “It shouldn’t take this long to exonerate an individual. … The justice system did fail.”

On Tuesday, Herb Whitlock walked out of jail for the first time in nearly 21 years. A judge approved the prosecutors’ motion to drop charges against him in the slaying of a newlywed couple.

Whitlock’s release from an Edgar County Jail came 3½ years after prosecutors freed his onetime co-defendant, Gordon “Randy” Steidl, who had been convicted on much the same evidence but was able to file more timely appeals.

A Chicago Tribune article highlights the details of this case and feature’s Bill’s work as the main reason for the release of both men. My congratulations to Bill for a job well done and helping to further build the reputation of our profession.

Here we go again, another incident involving a private investigator that tarnishes the reputation of an entire profession all in the name of making a quick buck.

A local Ohio newspaper is now reporting that a worker at the Ohio Bureau of Workers’ Compensation has allegedly admitted to selling the Social Security numbers and other non-public personal information of injured workers’ to a private investigator.

The private investigator has not been identified, but the case has been referred to the Cuyahoga County prosecutor’s office for possible criminal prosecution.

While it doesn’t appear that the information provided was being used for identity theft, the bureau is still notifying 49 injured workers whose personal information appears to have been was compromised.

These incidents only provide legislators with more ammunition to exclude licensed private investigators from legitimate access to valuable personal information.

One can only hope that those PIs who are willing to break the law, or forget about professional ethics, are caught and punished.

What do you think about this incident?

Here’s another example of a dumb criminal with a twist. It appears that two Mississippi men thought they could actually help free their buddy in a Wilkinson County jail using forged court documents with one of the men posing as a private investigator.

Now, the men are facing felony charges after their plan failed. It is alleged in a news report that Demario Walker, 23, of Prentiss told prison personnel Dec. 27 that he was a private investigator and offered a business card as proof. When officials at the prison run by Corrections Corp. of America asked for photo identification, Walker said he had lost it.

Correction officials were also alert to the fact that the two men were driving a 2004 Kia to supposedly transport the prisoner to another facility.

So, now we have to worry about criminals posing as PIs. It seems that everyone wants to become a private investigator. Who’ll be next?

Computer Forensic professionals are quickly finding out that several states are now requiring them to be licensed as private investigators.

A recent article in Baseline Magazine details how legislators in South Carolina have introduced pending legislation where “digital forensic evidence gathered for use in a court in this state must be collected by a person with a PI license or through a PI licensed agency.”

The Texas Private Security Board recently made a ruling regarding the licensing regulations which effect computer security consultants and computer forensic examiners. They felt that it is important that these computer related practitioners, as well as the entities hiring their services, are familiar with the licensing regulations, as violations carry steep financial and legal penalties.

There is no doubt that these regulations will cause computer forensic experts to create strategic business alliances with private investigators to insure that evidence they collect is not thrown out of court over licensing issues.

What do you think about this? Should computer forensic experts be required to have a PI license? Do private investigators have the necessary training and expertise to conduct computer forensic examinations?

It appears that a case involving the hiring of an out of town private investigator on a death penalty case may have an impact on how the state pays court appointed investigators.

It all started when a Hillsboro lawyer hired Dave Panter, an ex-cop from Tillamook and an investigator from a nearby county to defend a murder case. However, the state Office of Public Defense Services refused to cover the investigator’s travel expenses from his office to Hillsboro.

The state offered to pay for Panter’s hotel and meals in Hillsboro, but it refused to pay him the standard state rate of $34 an hour for a capital case, plus 40.5 cents a mile for gas, to make the 60-mile drive between Tillamook and Hillsboro.

Since the state has refused, and a Washington County Circuit Court judge is set to decide the issue in a hearing Thursday, May 10.

“These guys haven’t had any raises since the 1970s,” says Barbara Baughman, a Portland private investigator who charges $75 an hour.

What do you think about the fees and expenses associated with court appointed investigator cases?

Governor Purdue has appointed Patricia Barrow Mincey, 45, to the Georgia Board of Private Detective and Security Agencies.

Patricia is a Savannah, Private Detective/ Security Agency Member – owner and lead investigator of Executive Strategies and a contract investigator with US Investigations.

She served as a corporate fraud manager for Food Lion Stores, a division of Delhaize Corporation, and a loss prevention manager for Kmart Corporation. She is a member of the National Council of Investigation and Security Services, the International Graphoanalysis Society, the Association of Certified Fraud Examiners and the Georgia Association of Professional Private Investigators Board of Directors.

Patricia Mincey attended the University of Georgia, Georgia Southern University, and Armstrong Atlantic State University. She and her husband, Ron, have one grown daughter.

The Missouri News is reporting the latest news on a bill introduced by Sen. Harry Kennedy, (D) of St. Louis. Missouri is only one of 6 remaining states that does not regulate private investigators. This bill would also include continuing educational requirements for all licensees.

The proposed bill includes a grandfather clause that would allow current private investigators to become certified if they have been in good standing as a business for two years. They would also have to provide proof of liability and workers’ compensation insurance.

The Senate Financial Committee on Monday heard Kennedy’s bill, which would also create a statewide board to license and regulate private investigators throughout the state.

Even though a representative of the Missouri Association of Private Investigators testified in favor of the bill, there was at least one PI who testified against it.

Do you feel private investigators should be licensed? What are the pros and cons of licensing as you see it? This is a very important topic as many of the remaining unlicensed states are fighting for licensing.

What do you think?