DOJ Sues Paris-Based Firm in Computer Tech Support Scam Case

Paris-based Nexway Sasu et al. worked with telemarketers making misrepresentations to consumers about the performance and security of their computers in a “technical support scam,” alleged the DOJ in a Monday fraud complaint (docket 1:23-cv-00900) in U.S. District Court for the District of Columbia.

Defendants violated the Federal Trade Commission Act and the Telemarketing Sales Rule by assisting and facilitating illegal sales and “laundering the credit card charges” through their merchant accounts or by engaging as the ultimate sellers liable for the transactions, injuring consumers in the district, throughout the U.S. and elsewhere in the world, it said.

Tech Live Connect and other Nexway tech support telemarketing clients, made misrepresentations about the performance and security of consumers’ computers to market and sell tech support services to them, said the complaint. Nexway caused the credit card information of consumers duped by Tech Live Connect and other tech support victims to be submitted into the credit card system through Nexway’s merchant account, it said.

By using its own merchant account to process consumer payments for third parties, Nexway made it possible for its clients engaged in tech support scams to obtain “furtive access to the credit card system and evade detection by the card brands for a longer period of time,” DOJ alleged. The charges Nexway “surreptitiously placed” in the credit card system and the collection of money consumers paid is the “life-blood of tech support scams,” it said.

Nexway engaged in the activity even though its officers knew “or consciously avoided knowing” that its tech support clients were engaged in deceptive marketing practices, said the complaint. Under Nexway’s merchant of record business model, consumers, after receiving deceptive pop-ups and misrepresentations by Tech Live Connect telemarketers, entered their credit card numbers into an online payment page supported by Nexway to pay for the “bogus tech support services,” it said. Charges on their credit card statements include the name Nexway, it said.

Alleged deceptions occurred from August 2016-February 2020, said the complaint, which showed a screen shot of a popup informing consumers their Windows computer had been infected with four viruses via phishing spyware, putting their personal and banking information at risk. The message informs consumers to contact Microsoft about a virus, providing a phone number after they hit the “Proceed” button. One consumer reported a computer locking up and a siren going off, with instructions to contact Microsoft about a virus and a phone number to call.

In another scheme, consumers searching for performance-improving software for their computer would download software requiring activation through a phone number leading to Tech Live Connect. During the calls, representatives made false statements as part of “upsell sales pitches,” saying a consumer’s computer was “overwhelmed by thousands of bugs and issues,” had a virus, or lacked security, said the complaint. Nexway received payment for the charges and after a deduction for commission -- 7% for new charges and 8% for recurring charges -- sent the money to Tech Live Connect, the complaint said.

In September 2020, Indian authorities raided the boiler rooms and offices of Tech Live Connect and other Nexway tech support telemarketing clients, said the complaint. Soon after, DOJ sued Brian Cotter doing business as Tech Live Connect and others, alleging Cotter worked with co-conspirators in India from at least 2011-2020 to operate a tech support fraud scheme.

In August 2016, Nexway executed an agreement with Tech Live Connect, saying it would be the seller and merchant of record for all product sales to end users and had the right to set prices for each product sold, plus responsibility for returns and cancellation policies applicable to its products sold. It also had processing services agreements with PayPal, Ingenico and Global Collect Services. “Nexway’s unlawful practices resulted in substantial consumer injury,” said the complaint.

Defendants’ violations under the FTC Act include unfairness and misrepresentations to consumers, said the complaint. Violations of the TSR include assisting and facilitating, credit card laundering and misrepresentations to consumers. Consumers have suffered “tens of millions of dollars of injury,” the complaint said. DOJ seeks a permanent injunction, an award of civil penalties and other monetary relief within the court’s power to grant, it said.