Accused VoIP Fraudster Sought As Fugitive - InformationWeek

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Accused VoIP Fraudster Sought As Fugitive

The feds issued an arrest warrant for Edwin Pena for violating his bail conditions. Investigators are searching for the man, who's been missing since last month.

Federal authorities say a Miami man facing computer and wire fraud charges for stealing VoIP services and selling them through his own company has fled, and a warrant has been issued for his arrest.

Edwin Pena, 23, was arrested June 7 for allegedly acting as a legitimate wholesaler of Internet-based phone services while actually running a sophisticated fraud. Federal investigators say he and a conspirator secretly hacked into the computer networks of unsuspecting Voice over IP (VoIP) telephone service providers, including one Newark, NJ.-based company, to route his customers' calls.

Pena allegedly stole and then sold more than 10 million minutes of service at deeply discounted rates, netting more than $1 million from the scheme.

A little more than a month ago, Pena failed to meet his bail conditions. After his initial arrest, he had been placed under pretrial release supervision. Out on a $100,000 bond, Pena's travel had been restricted to the Southern District of Florida and the District of New Jersey.

Assistant U.S. Attorney Erez Liebermann called Pena a fugitive. "We have leads we're investigating," he says. The government had been waiting to find out if Pena would plead out or if the case would go to trial.

Pena's girlfriend's mother put up two of her properties to secure his bail. According to a source close to the case, both the girlfriend and her mother remain in Florida while Pena is on the run.

"If they can commit this anywhere, there's no reason to stay," says Liebermann. "When you're online, it's the same virtual world sitting on the beach in the Grand Cayman Islands as it is behind a desk in Newark."

Robert Moore, Pena's alleged confederate in the scam, has been charged with conspiracy to commit computer fraud. Moore, a resident of Spokane, Wash., has not fled.

Pena was the so-called mastermind of the plan, while Moore acted as the hacker, says Liebermann. He noted that investigators have identified more than 15 VoIP service providers that were hacked as part of the scheme, adding that telecom companies around the world were scanned. Liebermann says the pair scanned more than 6 million computers between just June and October of 2005.

"This is not a run-of-the-mill case. This was a sophisticated crime," said Liebermann in a previous interview. "They were scanning for unsuspecting intermediaries. They hacked into VoIP telecom companies, but they also wanted to hide their identities. They wanted the [service providers] to think the traffic was coming from somewhere else. They went after anybody who had a large enough network to send this traffic through--small companies, universities. The moment there was a vulnerable port discovered, they could use that to send traffic."

Liebermann says the telecom companies identified as victims lost up to $300,000 each. "You're talking about 15 providers," he adds. "Even at $100,000 each, that's a large number."

Pena spent part of his take on real estate, a 40-foot SeaRay Mercruiser, a BMW M3 and M25, and a 2005 Cadillac Escalade SUV, according to prosecutors.

On June 7, special agents of the FBI executed nine search warrants in Florida, New Jersey, Washington, Illinois, Texas, and California. After Pena's arrest, agents executed a seizure warrant for Pena's 2004 BMW M3, which was allegedly purchased and customized using money from his stolen VoIP scheme.

Pena faces up to five years in federal prison for the computer fraud charge, and up to 30 years if convicted of wire fraud. He's also looking at $1,250,000 in fines. Moore is facing five years and a fine of $250,000 for his conspiracy charge.

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