Sham telecoms created to scam AT&T must pay back ill-gotten gains [telecom]

Sham companies billed AT&T $13 million for services not provided.

By Jon Brodkin

AT&T has won a $252,000 judgment from the remnants of sham telecoms that were created in order to bill legitimate phone companies for services they didn't provide.

The companies billed AT&T $13 million, but AT&T figured out the scam after paying only a fraction of that. The defendants, All American Telephone Co., e-Pinnacle Communications, Inc., and ChaseCom, operated out of Utah and Nevada and had all shut down by 2010. The Federal Communications Commission granted AT&T's complaint against the companies in March 2013 and last week ordered the defendants to pay back the $252,496.37 they got from AT&T.

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I used to code PL/I in the NYNEX billing application: we billed over 6 Billion a year, back in 1994.

The security paradigm was simple: we assumed that every record we received was valid. There were lots of tests for valid values in the various fields of each record, but no way to verify if it had been sent from a company that actually provided the service being billed for. It was a leftover from the "One Bell, One System" days when the executives faced Bell Labs while they prayed.

Looks like nothing much has changed.

Bill

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Bill Horne
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