This Santa Fe lady, a retired dental hygienist, took on the junk callers who pestered her daily and won in court.
She began with all the things we’re supposed to do – registering on the do-not-call (DNC) list, blocking them on her cell phone, and pressing the opt-out on pre-recorded phone messages – to no avail. Finally, she bought the fake health insurance just to identify the source of the calls and last year sued four men in federal court.
Mohon argued that the four violated the New Mexico Unfair Practices Act, which bars automated calls with prerecorded solicitations unless there’s an existing business relationship. The state also requires sellers to identify themselves within 15 seconds. And it’s illegal to call residential subscribers listed on the national do-not-call registry or to block caller ID.
They violated the federal Telephone Consumer Protection Act by making robocalls to sell “services they falsely claimed were ‘health insurance,’” according to the lawsuit. Federal law prohibits robocalls to cell phones without the user’s consent and calls to anyone on the DNC.
According to Mohon’s lawsuit, Texas residents John C. Spiller II and Jakob A. Mears, through their business, Rising Eagle, made “abusive robocalls nationwide” from at least June 2018 through January 2019. Michael Theron Smith Jr., of Florida, also made abusive robocalls through his business, Health Advisors, and Scott Perry Shapiro provided call lists.
None of the defendants ever responded to her lawsuit, so the judge granted a default judgment of $570,000.
However, seven state attorneys general got there first. In 2021 the U.S. Federal Communications Commission hit Spiller and Mears and their companies, Rising Eagle and JSquared Telecom, with a record $225 billion fine for 1 billion illegal robocalls falsely claiming to offer insurance plans from well-known companies. In August, Smith and Shapiro were each fined $73 million.
The AGs’ combined case reveals the innards of this operation. The four defendants worked together to generate call lists and unleash a torrent of robocalls with little regard for federal law or the do-not-call list. At all times, their primary concern was keeping a pool of 30 agents busy peddling dubious insurance. When the Missouri AG sued, Smith instructed Mears to stop making sales there.
They subsequently stopped calling Florida, California, and Illinois. In June, Smith’s Health Advisors was dissolved, and Smith settled with Missouri, but he was still buying caller data.
According to the AGs, the defendants made 1.7 million calls to their states between January 2019 and June 9, 2020, and more than 308,000 were to numbers on the DNC. In September 2022, Smith complained to Mears: “We’re getting hit with lawsuits left and right…We have to find a way to not call these (expletive)s.”
Smith is shielded for a time because of his Chapter 11 bankruptcy case in southern Florida.
It gives us a closer look at one key player. In 2021, he made $587,642. That dropped to $501,173 in 2022. He lived in a $2.3 million home, and his credit cards ran from five digits to six. He owned a Lincoln and a Mercedes. A single man, he paid child support to two women.
Smith and friends ran one of many such scams out there.
U.S. Sen. Ben Ray Luján, chair of the Senate subcommittee on Communications, Media and Broadband, recently held hearings on the plague of robocalls and robotexts that defrauded Americans of $39 billion in 2022 and heard the feds don’t have a handle on them.
This case shows us that scammers can simply ignore federal laws with little fear of consequences, but states and the FCC can make a dent. And so can determined individuals like Barbara Mohon.
Mohon knows she probably won’t see a dollar, but she told the Albuquerque Journal that her case sends a message: Find honorable work or prepare to pay up.
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