Posted: Jan 23, 2013 10:08 PM by Irina Cates - MTN News
MISSOULA - A man facing federal drug charges in connection to Jason Washington's former medical marijuana business is now accused by the Federal Trade Commission of a $70 million phone billing scheme.
The alleged scheme is known as "cramming," and it allegedly involves Steve Sann and his nine companies. FTC says Sann and three others charged people for services they didn't authorize or even known about.
Richard McKewen, an attorney for the FTC northwest regional office, said, "Charges for service provided by somebody other than your telephone company and the defendants in this case exploited that to placing the unauthorized charges on the consumers telephone bills."
In the civil complaint filed in federal court on Jan. 8, FTC investigators accuse Steve Sann, Terry Lane, Nathan Sann and Robert Braach of running nine companies out of Missoula and Henderson, Nevada.
FTC investigators say Sann is the leader of the operation and that he created a non-profit corporation called Bibliologic. He then allegedly used this corporation in the $70 million scheme.
"A lot of the money that was made from the operation was ultimately transferred to that non-profit. From there the money was transferred back into the companies and also was transferred to lawyers who were representing Mr. Sann in unrelated criminal matters. And so we've alleged that all of the money that was transferred to Bibliologic is ill-gotten gains," McKewen said.
FTC, the Better Business Bureau and the Federal Trade Commission received hundreds of consumer complaints about the unauthorized charges being "crammed" onto their phone bills.
"They had represented to various people that they were selling voicemail services, fax mail services, text to call services," McKewen said.
In its complaint, the FTC asked a Missoula federal judge to issue an order freezing the defendants' assets and to ban them from engaging in this alleged illegal conduct.
We contacted the spokesperson for the defense team and we're still waiting to receive their statement in response to the alleged "cramming" scheme.
In October, Sann pleaded guilty to federal drug charges after being accused of selling a marijuana growing facility at the Wye to Washington. A jury found Washington guilty on drug charges connected to that case last week.
Sann is due to be sentenced on those charges next month.