GoInternet Execs Indicted for Fraud and Perjury

GoInternet.net Inc. president and chief executive officer Tyrone Barr, vice president Neal Saferstein and chief information officer Billy Light were charged in a 26-count federal indictment for allegedly perpetrating a fraud on customers for around $75 million, where the customers and potential clients would have been paying for Internet-related services without their consent.^[1]

It has been asserted that GoInternet telemarketers would induce potential customers into receiving an information packet, which was designed to look like junk mail so that it would be thrown away, however receiving the packets triggered a $29.95 monthly charge on the companies' telephone bills unless they called to cancel.^[2] Many companies paid because they didn't notice it, U.S. Attorney Patrick Meehan said.^[3] In other cases, the government asserts that GoInternet would create Web sites and ads for companies without the companies' consent and then charge them for the services.^[4]

At its peak, it employed 1,000 telemarketers in three downtown locations where workers cold-called small businesses, churches and individuals nationwide offering to create and host Web sites or advertising for the organizations. ^[5]

GoInternet, which was in business from 1997 to 2004, already had been the target of a civil suit by the Federal Trade Commission and was accused by several states of violating do-not-call lists.^[6]

The men are all charged with multiple fraud counts, and 2 of them are also are charged with conspiring to commit perjury.^[7] Saferstein is also charged with failing to declare $1.7 million in unreported income between 2001 and 2004, and failing to pay more than $2.8 million in payroll taxes.^[8]

Perjury
Perjury is generally covered under 18 U.S.C. § 1621 wherein it states that whoever, 1) having taken an oath before a competent tribunal, officer, or person, in any case in which a law of the United States authorizes an oath to be administered, that he will testify, declare, depose, or certify truly, or that any written testimony, declaration, deposition, or certificate by him subscribed, is true, willfully and contrary to such oath states or subscribes any material matter which he does not believe to be true;^[9] or 2) in any declaration, certificate, verification, or statement under penalty of perjury as permitted under section 1746 of title 28, United States Code, willfully subscribes as true any material matter which he does not believe to be true;^[10] is guilty of perjury and shall, except as otherwise expressly provided by law, be fined under this title or imprisoned not more than five years, or both. This section is applicable whether the statement or subscription is made within or without the United States.^[11]

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^[1] AP Staff, 3 telemarketing execs charged in $75 million fraud probe, Associated Press Newswire, September 14, 2007, available at LEXIS, News Library, Wire News Services.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] 18 U.S.C. § 1621 (1) (2007).
^[10] Id., at § 1621(2).
^[11] Id., at § 1621.