The Most Important Takeaway from the FCC’s Fourth Annual TRACED Act Report to Congress About Robocalls

On December 27, the FCC released its fourth annual report to Congress on efforts to stop robocalls. This report is required under Sections 3, 11, and 13 of the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act.

The significant difference between this report and the three previous reports is that the FCC listed five criminal referrals it made to the Justice Department in 2023. Previously, the FCC had only reported two other cases of criminal robocalling, both involving COVID fraud in 2020. The FCC made no criminal referrals in 2021 and 2022. As background, Section 11 of the TRACED Act requires the FCC report criminal robocalls to the Justice Department.

SEC. 11. PROVISION OF EVIDENCE OF CERTAIN ROBOCALL VIOLATIONS TO ATTORNEY GENERAL.

(a) IN GENERAL.—If the Chief of the Enforcement Bureau of the Commission obtains evidence that suggests a willful, knowing, and repeated robocall violation with an intent to defraud, cause harm, or wrongfully obtain anything of value, the Chief of the Enforcement Bureau shall provide such evidence to the Attorney General.

It is important to note that the law does not simply allow the FCC to report criminal robocalling for Federal prosecution, it requires the FCC to do this. Americans made more than 6.5 million robocalling complaints in 2021 and 2022. In 2022 alone, American consumers reported more than $800 million in loss from fraud initiated by phone call. It seems extraordinarily unlikely that the FCC had no evidence of criminal robocalling it could refer between 2021 and 2022. It appears the FCC has been treating this law as if it was an elective and not a requirement.

On October 23, 2023 the Senate Commerce, Science, and Transportation Subcommittee on Communication, Media, and Broadband heard from witnesses who testified that the missing link in the fight against criminal robocalls was aggressive enforcement from the Justice Department.

I don’t believe the Department of Justice is doing enough; and you can sense that frustration from the FCC Chairwoman. They certainly at the Department have a lot of tools that they can use both to enforce FCC orders, but on their own to bring righteous Mail Fraud [and] Wire Fraud cases and enforce the laws that you all have passed. So, yes, we believe the United States Department of Justice could do more. And, as a former DoJ official, I think it is a missed opportunity for them.

     – Megan Brown, Wiley-Rein on behalf of the US Chamber of Commerce Cybersecurity Council

I agree with my colleague here, Megan, that criminal enforcement against these individuals, these groups, that’s organized crime abroad doing this, is absolutely critical because that’s the only way they’re going to stop trying to defraud Americans if they if they’re taken off the board.

     – Josh Bercu, USTelecom, on behalf of the Industry Traceback Group

The FCC had made a point in each of its TRACED Act annual reports to reiterate that it is dependent on the Justice Department to collect fines the FCC imposes on regulated US entities for robocalling violations. For example, in 2017 the FCC imposed a $120 million fine against Adrian Abramovich for sending millions of “neighbor spoofed” vacation and timeshare offer calls (FCC Proposes $120M Fine On Robocaller For Illegal Spoofing). At the time, this was the largest fine the FCC had ever imposed. As a result, in the weeks following this action, overall robocalling complaints dropped more than 50%. Yet the Justice Department did not file suit to collect this fine until 2023 (See case # 1:23-cv-21723-BB; US Federal District Court for the Southern District of Florida).

This year’s five criminal referrals from the FCC are likely intended to further accentuate the FCC’s frustration with the lack of partnership from the Justice Department. These five referrals appear to be curated to draw attention to FCC cases that are already well known to the public, including cases where the FCC took formal action between 2019 and 2021 (see pages 18-19, paragraphs 2a-e of the FCC’s report).

• One referral was for, “calls introducing an advertisement or constituting telemarketing of auto warranties.” This likely refers to the FCC’s actions against Sumco Panama, et al.

Of particular note, one of the defendants in the Sumco action had been previously banned from the telemarketing industry in 2013 (see case # 8:11-cv-01910-DOC-JPR; US Federal District Court for the Central District of California).

• The FCC’s second 2023 criminal referral was for, “voice message calls to toll free numbers without prior express consent or an emergency purpose.” This almost certainly refers to the FCC’s allegations of toll-free traffic pumping by Thomas Dorsher.

The Dorsher action has proven to be somewhat controversial for the FCC in that Dorsher claims he was acting as consumer advocate under the online pseudonym “ScammerBlaster,” tying up the phone lines of robocallers. Dorsher was also a prolific correspondent with FCC Commissioners, sending rambling, unsolicited e-mail complaints about the FCC’s inability to stop robocalls (see Federal Communications Commission (FCC) Emails About Robocalls in the FCC Commissioners’ Email Accounts, Sept 21, 2021 – Dec 14, 2021 pages 44, 46-47, 56-69, 70-72, 80-82, 99-101, 106-108, 128-131, and 170-173). Dorsher was criminally indicted in Utah in December 2022 (see case # 3:22-mj-00623-ARS; US Federal District Court for the District of Utah).

• The third referral was for, “calls related to an election to wireless numbers without prior express consent.” This likely refers to the FCC’s well publicized 201 case against Jacob Wohl and Jack Burkman.

Election related robocalls might seem to be a bit of a stretch for a criminal referral, but Wohl and Burkman are alleged to have sent robocalls telling voters that would be arrested if they voted by mail in the 2020 election. They have been sued in several jurisdictions and were criminally convicted in State Court in Ohio.

• The fourth referral was for, “calls pertaining to health insurance, with the intent to defraud.” This likely refers to the FCC’s 2020 case against Rising Eagle and JSquared Telecom.
• The fifth referral was for, “calls using spoofed caller ID in connection with a state election.” This likely refers to the FCC’s 2019 case against Kenneth Moser.

It is, again, very important to note that the TRACED Act does not allow the FCC to cherry pick the best cases, or cases already known to the public, or cases the FCC has already completed, or cases against entities inside the US. The TRACED Act requires the FCC to refer evidence of criminal robocalling to the Justice Department.

Americans reported 226,405 instances of fraud initiated by telephone to the FTC in the first nine months of 2023. These reports detailed more than $600 million in loss. The information provided to the FCC by the telecom industry—both unilaterally and through the Industry Traceback Group—involves credible leads into dozens of potentially viable criminal investigations.

All objective experience over the past seven years has shown that every successful effort to reduce robocalling has been the result of an enforcement action or fear of an enforcement action . If the FCC truly wants to protect American consumers from robocalling fraud, it needs to expand the scope and volume of evidence it sends to the US Department of Justice.