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Former Australian Porn King Busted in SMS Scam

Former Australian Porn King Busted in SMS Scam
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Dec 1, 2010 9:00 AM PST    Text size: 
BRISBANE — A former porn site operator was fined $2 million by the Brisbane Federal Court for bilking lonely hearts in an SMS dating scam.

Scott Gregory Phillips is reportedly the mastermind behind a scheme where backpackers were hired to create fake profiles on dating websites.

The bogus profilers posted photos and sent unsolicited text messages to victims in an effort to harvest mobile phone numbers.

These numbers were then fed into special software that sent premium SMS messages inviting people to use a secure SMS chat gateway called Safedivert at a cost of $5 per message. Some were also charged for the texts they received.

The victims lost money and suffered personal embarrassment — some of which spent large sums of money on hotel rooms and waited at airports for dates that never arrived.

The operation sent 1.8 million messages over three years and brought in revenue of $4 million. Phillips netted $140,000 in profit during his involvement between December 2005 and April 2006.

The fine was levied against Phillips by the Australian Communications and Media Authority (ACMA) for breaching federal anti-spamming laws and the Trade Practices Act created in 2003.

ACMA prosecuted three other companies along with Phillips in the fake dating operation that netted authorities fines totaling $22 million.

In October 2009, the Federal Court fined Mobilegate Ltd $5 million, Winning Bid Pty Ltd $3.5 million and Simon Anthony Owen and Tarek Andreas Salcedo $3 million each and Glenn Christopher Maughan $1.25 million.

The court also fined Jobspy Pty Ltd $4 million and Scott Mark Moles $2.5 million in December 2009.

Phillips had a run in with the law in 2006 when he plead guilty to torturing burglars. At the time he was reportedly the head of Internet Billing Services and operated porn site PinkBits.com.

Phillips was busted this time after he was jailed for an unrelated matter. He reportedly used one of his homes to set up the scheme.

But he was the first person to challenge the act and the only one to defend the charges against him, however losing his court battle last month.

Justice John Logan said, "Phillips' involvement was at the most senior level ... it involved systematic and studied deception of those who use Internet dating websites, the end to which that deception directed was the (pursuit) of profit.”

As a result of the investigation ACMA has set up a spam reporting text message service and can be visited here.

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