A federal judge sentenced two men to varying prison terms for their roles in a telecom fraud scheme that netted more than $4.4 million, the Department of Justice said Tuesday.
U.S. District Judge Peter G. Sheridan sentenced Vinod Tonangi, age 33, to a year and a day in prison, while Harjeet Bhambhani, age 40, received a 37-month term. They were also ordered to serve three years of supervised release, and Tonangi owes $1.7 million in restitution.
Both men pleaded guilty to one count of conspiracy to commit wire fraud by selling stolen voice over Internet protocol services to telecom companies including AT&T Inc. (T) and Verizon Communications Inc. (VZ). Phone companies often trade such VoIP services on a wholesale basis.
Tonangi, Bhambhani and their alleged co-conspirators were accused of using shell companies to induce the legitimate VoIP wholesalers to provide them phone services on credit. The defendants then resold the services to other telecom companies for profit, the department said.
In reality, the companies known as Paradise Communications, Reach Communications and Airtel Holdings had no operations, and did not provide the services they purported to offer, authorities said.
The defendants backed up the companies' image using fake business addresses, shell company e-mail accounts with names of non-existent employees and fabricated financial reports that used the logo of a national accounting firm without its knowledge, according to prosecutors.
Tonangi and Bhambhani were also accused of using a fake U.S. passport to try to prove the indentity of their non-existent lawyer, named Frank Soss.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com