Accused phone tycoon Zhenya Tsvetnenko may have raked in as much as $US20 million in just two years through the alleged text-messaging scam that has landed him in custody and facing the prospect of extradition to the US to face trial.
As revealed at the weekend, multimillionaire Mr Tsvetnenko has been languishing in prison since before Christmas, after US authorities applied to begin the process of extraditing him over allegations he was a central player in a $100 million “auto-subscription” fraud.
The West Australian can reveal the staggering financial scale of his alleged involvement — and that US authorities are closing the net on Australian co-conspirators in Sydney.
A former high-profile Personality, Mr Tsvetnenko will discover today whether he will get bail ahead of a full extradition fight on charges including wire fraud, attempted mail fraud and money laundering.
It is alleged he was an integral part of the multinational fraud, which US authorities said funded a “lavish lifestyle” of “expensive vacations, gambling” and multimillion-dollar homes.
The US Department of Justice says the scheme charged mobile phone customers $9.99 monthly fees for unsolicited, recurring text messages without their knowledge. The practice is known as auto- subscribing in the US or third-party billing in Australia.
Last year, fellow WA-bred entrepreneur Darcy Wedd was jailed for 10 years after a jury convicted him of being “at the epicentre of a massive fraud that stole money from millions of Americans”.
At Wedd’s trial, a conspirator-turned key witness Erdolo Eromo estimated how much Mr Tsvetnenko made from the scheme between 2012 and 2013. “I want to say $15 million to $20 million,” Mr Eromo said.
In a Powerpoint summation of the US government’s case, tendered to the New York Southern District Court, Mr Tsvetnenko’s reputation within the mobile phone business — known as far back as 2009 — was outlined.
During the Wedd trial, another conspirator, Michael Pajackowski, said Mr Tsvetnenko’s reputation as a “prolific auto subscriber” was common knowledge before the scheme began.
Wedd and Mr Tsvetnenko were said to be “close personal friends” who regularly holidayed together. Mr Eromo confirmed Mr Tsvetnenko and his now estranged wife Lydia had been a guest at his wedding.
Prosecutors allege it was through those friendships that Mr Tsvetnenko was able to spam hundreds of thousands of numbers, and allegedly reap massive financial rewards.
In July 2016, Mr Tsvetnenko was charged on indictment in the US of being involved, and also devising methods of concealing the distribution of the money generated from the scheme. Since then, a swath of co-conspirators have been convicted in the New York courts.
In recent weeks, another Australian accused over the texting scam, Michael Pearse, has had nearly $US200,000 of assets frozen by order of the US courts, and faces possible extradition to the US. Court documents allege he made nearly $8.5 million from the scheme.
Another Australian accused, Yongchao ‘Kevin’ Liu is also facing a court appearance in Sydney next month.
Mrs Tsvetnenko was silent yesterday about her former husband’s descent from millionaire playboy to remand prisoner.
She declined to answer questions about potential implications for their multimillion- dollar asset pile. Mrs Tsvetnenko is not accused of any wrongdoing.
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