A Bethesda pay phone operator has admitted that he fraudulently made $4 million by setting up his phones to robotically place calls to government agencies and businesses. Nicolaos Kantartzis, owner of Federal Telephone Corporation Incorporated, pleaded guilty in federal court in Greenbelt on Tuesday to wire fraud.
From January 2005 until July 2011, he programmed his pay phones to place calls to toll-free numbers, according to plea documents. Kantartzis, 62, received a compensation fee of about 50 cents from the recipient of each call, the documents say. In total, he netted $4 million over the six years.
Operators of pay phones receive what’s called a “dial around” compensation fee of 49.4 cents for toll-free calls that are made from their phones, paid by the owners of the toll-free numbers. Kantartzis admitted that he rigged his phones to automatically make millions of such calls.
Court documents say he programmed the phones to place calls to government agencies that included the General Services Administration, the Department of Labor, the Department of Education and the Internal Revenue Services. The robocalls were also made to private businesses such as Dell Corporation, Fidelity Brokerage Services, financial institutions and airlines, according to court records. Prosecutors said more than 200 agencies and businesses were called.
Court records say video surveillance shows that no user was placing a phone call when many of the robocalls were made. Many calls made from pay phones at the Rockville Sportsplex and a barbecue restaurant were programmed to be made while the establishments were closed, court documents say.
“There were no actual callers, but owners of the toll-free numbers, including many government agencies, were required by law to pay Mr. Kantartzis 49 cents for each sham call,” Rod Rosenstein, the U.S. attorney for Maryland, said in a statement.
Kantartzis could not be reached.
He controlled at least 165 pay phones in Montgomery and Prince George’s counties, court records say. He has agreed to forfeit all the phones, as well as more than $2.8 million and any other future profits from the fraudulent calls.
He could face up to 20 years in prison, according to his plea agreement.
