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Saturday
Mar192011

Have Jawa and Jason Hope Stolen > $100 Million?

It turns out, Jawa used to be known as "Cylon LLC" and they have been running their text messaging scams for a very long time. In fact, the company has already been exposed and a very good news story covered their entire scam more than a year ago. Watch this:

Cell phone scam called "cramming": kxan.com

So what did Cylon do after they got caught? They changed their name to Jawa and put together a network of other LLCs to continue the same scam. It was simply too profitable to give up.

Jawa's half-a-million dollar holiday party was covered by several web sites, including this article in Gawker media. The comments on this article are very insightful. Several of the commenters, after reviewing Jawa's web site, wondered about how they make money or about its legitimacy. One particular commenter, however, seems extremely insightful:

Whoever this todbodman guy is, he seems to have all the details. One thing in particular about his comment jumps out at me: "...they are billing something crazy like 2 in 10 cell phones in the US..." Wow! There are over 290 Million cell phones in the US. Just AT&T and Verizon alone have over 180 million customers. If todbodman's comment is accurate, and as many as 2 in 10 (20%) cell phones in the US have been scammed by Jawa and their complex network of paid text message fraud, the numbers could be staggering.

Lets calculate what the numbers would be for just 20% of AT&T and Verizon customers at the lower, $3.99 per scam amount:

180 Million x 20% x $3.99 = $143 Million!

Now lets calculate the numbers for the total cell phone population of the US at the higher $9.99 per scam amount:

290 Million x 20% x $9.99 = $579 Million!

That is no chump change. Remember, that a lot of their scams are also on a monthly recurring basis, so the numbers can add up quickly. Rumor has it that they are running this scam WORLD-WIDE!

Here is something crazy to consider: If a person steals a car valued at $1,000, they'll spend years in jail for "Grand Theft Auto." What do you get when you steal hundreds of millions of dollars, $3.99 to $9.99 at a time? So far, you get to build North America's Largest House and throw some lavish parties:

 

Watch Video of Jason Hope's $500,000 Party

Regarding the Verizon lawsuit, Jawa is going on the offensive. In a recent Press Release, Jawa claims:

"We are outraged by today's District Court action that allows Verizon Wireless to continue to abuse its dominant market position and force out smaller competitors who provide valuable mobile content to customers. It is a blatant attempt to monopolize content. We will continue to aggressively fight for our rights and hope to resolve this matter quickly. JAWA employs more than 240 people, all of whom live in the Scottsdale, Arizona area. We take great pride in our work and want nothing more than to get back to delivering superior service to our customers."

Seriously? 

People can say whatever they want. Laywers and PR agents can make their claims seem legitimate. They very well could get away with this elaborate scam. It's possible they could "settle" the lawsuit with Verizon. After all, Verizon (and other wireless operators) make money from Jawa and Jason Hope's scams (they keep a portion of the proceeds). All they need to do is show that they are taking action to try and prevent such scams from continuing. Verizon's lawsuit has already done that. As far as Verizon is concerned, they might think they are better off to settle for a nice one-time payment, which would allow Jawa and Jason Hope to keep most of their stolen wealth and continue operating in other regions of the world where consumer protection isn't so great.

It's time to do something. This scam could be the biggest ever in the state of Arizona and there isn't a single journalist covering the story yet. It's very unfortunate.

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Reader Comments (5)

The sad part is they are just going to use their obviously good SEO / reputation management skills to keep burying posts like this. But any coverage on this is better than no coverage. Keep spreading the word.

March 19, 2011 | Unregistered Commenterbk

bk, if you do a search for "Jawa scam" the AZDisruptors article is now #1 search result on google: http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=jawa+scam

March 19, 2011 | Registered CommenterHamid Shojaee

What I also find sad is the developer's who program the phone number farming sites, knowing what they were doing (let's face it, engineers aren't dumb, they knew what they were building). I've turned down some jobs because I didn't think what the company was doing was valuable, or even ethical.

March 19, 2011 | Unregistered CommenterSean Coleman

We have been investigating this for some time and are initiating a class action lawsuit against all of the entities. If you have been victimized by this scam email cellphonescam@barskidrake.com for more information!

March 23, 2011 | Unregistered CommenterArizona Attorneys

Thanks for the terrific and gutsy job on reporting these very serious allegations. It is an emotional issue for all involved. Let's all remain factual and please keep in mind nothing is yet proven and everyone charged must be considered innocent for the time being.

A much larger story is coming, this is just the tip of the iceberg as other mobile carriers must likely follow suit. As well - watch for Interpol getting involved if the alleged scam involves international scope. Moreover, if deemed warranted, an aggressive prosecution joined by the Federal government may eventually invoke the Patriot Act and thus link the alleged crimes to a form of domestic terrorism that threatens the economy by undermining the secure means of performing daily commerce.

Incidentally, the charges were filed under Federal RICO statutes (Racketeering Influenced and Corrupt Organizations Act). It is extremely serious, allowing for criminal penalties, and is not just a civil case. If found guilty, it may include extended prison time in addition to paying back triple damages. RICO charges are not filed unless there is a very strong, provable case (meaning overwhelming evidence and witnesses). Typically, pressure on the lower level perpetrators leads to testimony by them against the leaders. Finally, given the wealth of the individuals charged, they may be deemed a flight risk and could have their freedom of movement restricted accordingly.

http://en.wikipedia.org/wiki/Racketeer_Influenced_and_Corrupt_Organizations_Act

March 24, 2011 | Unregistered CommenterLC
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