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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?

Its not everyday that the New York Times features a very nice positive article on a couple of New York City private investigators.

There are renting laws in New York City that affect half of the approximate two million rental apartments. Those tenants who are fortunate enough to live in these rent controlled apartments are required to live in their apartment at for least six months per year. They also can’t sublet it without the owner’s permission or charge more than the regulated rent. The landlord can take back the apartment if the primary tenant violates these rules, moves out, or dies unless a family member has already been living in the apartment for at least two years.

Bill Golodner and his partner, Bruce Frankel, both former New York City police detectives, say their firm has handled close to 500 of these real estate type cases in the past year.

News 14 Carolina recently aired a story about Karin Goin who uses regular dogs that she trains rigorously to find missing pets.

“(The dogs) are at least 85 percent of the investigation,” she said. “We are on the dumb end of the leash. We basically follow behind.”
Karin Goin

You can see the newsclip by clicking here.

A Virginia legislator is attempting to turn on its head the meaning of trespass, making uninvited forays against the law. SB 1120:

Provides that a person who goes or remains upon residential property or conspires to go or remain upon such property and who knows or reasonably should have known that any resident of such property suffered a substantial personal, physical, mental, or emotional loss, injury, or trauma within the week preceding the entry upon the property is guilty of trespass or conspiring to trespass, regardless of whether the lack of permission to enter the property was communicated to him.

AP reports, Va. bill would allow trespass charges against reporters.

Could this apply to private investigators attempting to interview a complaining witness?

A number of local town councils in Australia have reportedly paid thousands of dollars to private investigators to visit brothels in an effort to gather evidence.

“But honey, I was just doing my job…really!” (..now a ‘divorced’ PI)

It’s hard to beleive, but many community leaders have found that hiring private investigators to infiltrate and pose as regular bloks to determine if illegal brothels are operating within their jurisdiction.

Since local police can not “go all the way” to get the evidence to catch these prostitution locations and promoting unprotected sex, PIs have become the latest tool in fighting this growing problem.

However, a member with the Sydney’s Willoughby Council says it is worrying councils have had to pay private investigators to have sex with prostitutes, so they can gather enough evidence to shut down illegal brothels.

A Hollywood blog is referencing a Variety report that actor, Clive Owen has been hired by Universal Studios to play the hardcore private detective, Philip Marlowe.

The fictional Marlow character was created by Raymond Chandler for a series of detective novels starting with “The Big Sleep”, published in 1939.

While Hollywood loves to portray private detectives as the old style “Gunshoe,” modern day investigators prefer a much more contemporary portrayal. Hopefully, viewers will appreciate the new movie for its nostalgic value and not assume that modern day private detectives, or private investigators follow the Marlow style.

What do you think?

You would never think that a law would be needed to video tape on your own property, but an online news article reports a NH Legislator wants to make sure the law is clear.

A Nashua man was actually arrested after his home security camera made video and audio recordings of detectives who had come looking for his teenage son. Felony wiretapping charges against him were later dropped.

Rep. Dudley Dumaine and five other sponsors introduced House Bill 97, which would add an exception to the state’s wiretapping law, letting property owners record their own premises, with or without warning.

(Posted on behalf of NCISS and written by Bruce Hulme)

President Bush signed H.R. 4709, the “Telephone Records and Privacy Act of 2006″ on Friday, June 12th. This Bill passed the House last April and the Senate on the last of the 109th Congress in December.

In addition - Bryan Wagner, a Colorado “private investigator” formerly in the employ of Action Research Group, was the first “player” in the Hewlett-Packard scandal pled guilty to federal charges. He is expected to testify against others that have or will be charged in connection with obtaining telephone records and computer information. Charges are also pending in the California court.

H.R. 4709 bans pretexting of telephone companies and their customers for “Confidential Phone Records Information.” Chapter 47 of title 18, United States Code, is amended by inserting “Sec. 1039. Fraud and related activity in connection with obtaining confidential phone records on a covered entity.” Key elements in this criminal violation are interstate or foreign commerce, making false statements to a covered entity, its employees, the customer or knowingly providing a false or fraudulent document to the entity or accessing customer accounts via the Internet, or by means of conduct that violate section 1030 of this title, without prior authorization from the customer.

There is a prohibition on the sale and transfer of Confidential Phone Records without prior authorization from the customer. A prohibition also exists in knowingly and intentionally purchasing or receiving (or attempting to do so) such information without prior authorization from the customer or if one has reason to know that such information was fraudulently obtained.

While recognizing that there have been exigent circumstances where accessing telephone toll records by investigators assisted in saving lives, locating abducted persons and recovering stolen property, NCISS still supported H.R. 4709 on the basis that the mood in Congress was to put forth legislation that would have expanded making pretexting illegal in areas other than just obtaining telephone records. The unintended consequences would have outlawed undercover operations in by the private sector; and that is just one example. Our analysis, even prior to the unfavorable publicity generated by the H-P matter, was that if HR 4709 failed to pass in the 109th Congress, in 2007 it would return with additional privacy protections and make the use of pretexting for any reason in a non-law enforcement setting illegal. Such measures could still be introduced in other legislation as the 110th Congress gets underway in 2007.

This week Senator Feinstein introduced two bills that NCISS will be watching very closely, S 238 the Social Security Number Misuse Protection Act and S 239 the Notification of Risk to Personal Data Act of 2007.

Every bill that NCISS took a position against in the Senate and House during the past two- year session of the 109th Congress, failed to be enacted into law. However, we expect our work will be considerably more difficult the next two years with both the Senate and House being controlled by the Democrats.

It is important that NCISS increase its membership and lobbying “war chest.” Any inquiries regarding applications for membership or contributing to the NCISS Legislative Committee Fund may be directed to the contact address below.

Bruce Hulme, NCISS Legislative Director

NCISS
7501 Sparrows Point Blvd.
Baltimore, MD 21219
Tel: 1-800-445-8408
email: nciss@verizon.net
or go to: www.nciss.org

Private investigator, Bryan Wagner, of Littleton, Colorado pleaded guilty on Friday to identity theft and conspiracy charges in United States District Court in San Jose. His sentencing is now scheduled for June 20 in San Jose federal court.

The private investigator admitted to the two felony counts as part of a plea deal based on his obtaining the SSN’s and telephone toll records of journalists, former Hewlett-Packard directors, and their family members.

Mr. Wagner admitted to “pretexting” the telephone companies into releasing their records. He admitted to using personal information to set up online accounts in the names of several people to access their telephone toll logs and billing records.

Mr. Wagner’s lawyer, Stephen Naratil, stated his client was the “little guy” who was tricked by others into thinking the investigative method he used was legal. He also said that Mr. Wagner would testify for prosecutors as they pursue other figures in the case.

The four other defendants associated with this case have all pleaded not guilty. You can read more about this here.

What’s your opinion on this?

Several media outlets, including CBS News, Mercury News, and the Computer Business Review are reporting that one of the private investigators charged in the HP scandal will plead guilty today under a plea deal.

It is reported that 29 year old Bryan Wagner, of Littleton, Colorado is expected to enter a guilty at a scheduled arraignment hearing today in a San Jose federal court.

According to Stephen Naratil, Wagner’s lawyer, his client “accepts the full responsibility for what he’s done, although he never thought or intended his actions to be illegal…“He was assured numerous times that what he was doing was legal.”

It appears that federal prosecutors applied the preasure and presented an offer to Wagner in return for his cooperation. There is no doubt that Wagner’s testimony about his involvement will help federal prosecutors develop a case against all those involved.

Under the proposed deal, Wagner faces a two year manditory prison sentence on identity theft charges and a maximum of 5 on the conspiracy charges.

This is a very important case to follow as the results of the federal probe, potential convictions and penalty phase will have a significant impact on future legislation. The January issue of PI Magazine features several articles about the HP scandal and our responsibilities as investigators to remain ethical, at all times, on all cases.

What’s your opinion on this? Add your comments below.

In response to a 2006 state law, the Ohio Attorney General has created an online searchable database called, Sexual Civil Child Abuse Registry (SCCAR). The database is “a civil registry of persons found liable in a declaratory judgment action for assault or battery based on childhood sexual abuse.”

A Pittsburgh Tribune article is reporting that the Tarentum, Pennsylvaina town council will hire a private investigator with a $5,000 cap to determine where Councilwoman Ginger Sopcak lives.

It seems allegations have been made against the councilwoman alleging that she no longer lives within her district. Residents and council members have questioned in recent months where Sopcak keeps her primary residence.

This is an opportunity for private investigators to market a similar service to town councils throughout the United States.

The Hollywood Reporter is reporting that actor Tom Arnold will play the role of a private investigator in a comedic thriller titled “Remarkable Power.” One can only imagine how our profession will be portrayed as Tom plays what has been described as a “low-rent” private investigator. The story will be centered in Los Angeles and include an experienced supporting staff. No date has been announced for its release.

An International Herald Tribune article is reporting that Asher Weizman, a private investigator employed by the Israel Football Association (IFA) is investigating a match-fixing scandal.

The IFA convened an emergency meeting Monday as two more Israeli soccer players were arrested in a widening soccer scandal. two players from the Hapoel Beersheba team — goalkeeper Assi Rachamim and central defender Oz Yifrach — were arrested Sunday on suspicions that they knew their teammates planned to throw games but didn’t report it. Three Hapoel Beersheba players were arrested last week on suspicions of match-fixing. All five remain in custody.

CBC News is reporting that Michael Robinson, a Saskatoon private investigator has pleaded guilty and agreed to pay a $20,000 fine for unlawfully accessing a police computer system at the Balcarres RCMP detachment.

It seems that this is not the first time Mr. Robinson or his investigative agancy has been the focus of Canadian officials. Four years ago, Robinson’s firm, Robinson Investigations, was at the centre of an extensive privacy investigation involving police and several government departments. Six government and Crown workers were suspended following the probe.

Richard Thomas, the British Information Commissioner, has concluded in his report for Parliament that the means used by a private detective were probably illicit in more than 11,000 of the assignments.

This information was the result of a police raid named Operation Motorman, on a private detective’s home which showed that in three years the detective had been hired by 305 journalists to carry out 13,343 separate inquiries at a cost of hundreds of thousands of pounds.

One paper alone paid the detective £26,000 (about $50k). It also appears that the Commissioner will now expose the names of all the newspaper clients. More can be read on this topic by clicking here.