Toll-Free Number Payphone Scam make 1.2 million

Two Wisconsin men whose pay phone company raked in $1.2 million by auto-dialing toll-free numbers were indicted Wednesday on federal fraud and money laundering charges.

Jeff Frost, 53, of Brookfield, and Colin Nordstrom, 48, of Coon Valley, programmed pay phones to take advantage of a fee that pay phone owners receive when their phones are used to dial toll-free numbers, according to the U.S. Attorney’s Office in Madison.

Each faces up to 20 years in prison if convicted on wire fraud, wire fraud conspiracy and money laundering conspiracy charges. Nordstrom faces another possible five years for allegedly lying to federal agents in January and to a grand jury in March.

According to the indictment, FCC regulations require that toll-free number subscribers pay a 49.4-cent per call fee to payphone owners, called “dial around compensation,” each time their pay phones are used to call toll-free numbers.

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