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Montana man pleads guilty to wire fraud, money laundering in $70 million phone 'cramming' case

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MISSOULA, Montana — A Montana man pleaded guilty to wire fraud and money laundering after prosecutors said his companies ran up $70 million in unauthorized charges on phone bills across the nation in a "cramming" scheme.

Cramming involves tricking customers into paying for services they didn't authorize or receive, prosecutors said.

The U.S. Attorney's Office alleged the case against 59-year-old Steven Sann of Stevensville involved voicemail accounts and fax services people may have unwittingly signed up for while answering questions on websites offering free products or job-search assistance.

Hundreds of complaints about monthly charges from $9.95 to $24.95 led Sann's companies to return more than $40 million, authorities said.

Data collected by the Federal Trade Commission found many customers didn't know they were being charged. From March 2010 to April 2012, less than 1 percent of the people purportedly with voicemail accounts through the companies actually accessed them.

The FTC brought civil action against Sann, his wife, his son, Nathan, their accountant and nine companies in January 2013, asking a federal court to shut down the operation. The agency said companies run by the Sanns started tacking on unauthorized phone charges in 2008.

The companies listed were: American eVoice, Ltd.; Emerica Media Corp.; FoneRight Inc.; Global Voice Mail, Ltd.; HearYou2, Inc.; Network Assurance, Inc.; SecuratDat, Inc.; Techmax Solutions, Inc.; and Voice Mail Professionals, Inc.

Nathan Sann has said they stopped charging customers in April 2012. He reached an agreement with the FTC in November that bans him from placing charges on consumers' phone bills. It called for a $21 million judgment, but that amount would be suspended if Sann surrendered precious metal coins to the agency. The value of the coins was unclear.

Steven Sann was initially charged with 32 counts of wire fraud, two counts of money laundering and one count of conspiracy. He pleaded guilty to one count each of wire fraud and money laundering last Friday during a hearing before U.S. District Judge Dana Christensen.

His attorney, Peter Lacney, said the plea agreement recommends a two-year prison term when Sann is sentenced on July 17.

The FTC case against Steven Sann was put on hold pending the outcome of the criminal case, Lacney said. It was not immediately clear Monday where the FTC case against Sann's wife stood. An FTC spokesman did not immediately return a phone message from The Associated Press.

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