By Robert Weisman | December 10, 2019
A married couple running a tech support business from their Melrose home has been sued by the state attorney general for allegedly charging consumers to fix nonexistent computer problems, in a scheme that netted at least $2.4 million through thousands of transactions.
The scam by Vtech Software Solutions Inc., a company run by Shalu and Vishal Chawla, targeted senior citizens in Massachusetts and across the country by sending deceptive pop-up ads to their computers warning them of viruses or other problems, and then charging them for repairs, according to a civil lawsuit filed by Attorney General Maura Healey.
“This couple preyed upon residents in our state — many of them elderly — and tricked them into paying for computer repairs that didn’t exist,” Healey said in a statement. She said her office began investigating after receiving a tip from the Federal Trade Commission.
Late last month, her office obtained an order from Suffolk Superior Court freezing assets in the Chawlas’ bank accounts and real estate to set up a fund for restitution. The court also granted a preliminary injunction preventing the Chawlas and Vtech — along with a Wakefield business they operated, TechMate Inc. — from transferring assets. Vtech wired at least $428,500 in 2016 to an affiliated company in India, called Clingwire, according to the attorney general’s complaint.
The defendants have not yet formally answered the complaint or addressed the charges in a filing. But they are cooperating with Healey’s office, their attorney said.
John Bacon, a Quincy lawyer who represents the Chawlas, described his clients as innocent victims of a relative in India for whom they set up the tech support business nine years ago. He said the couple initially thought the business was legitimate and, while they established business bank accounts, had no direct contact with customers themselves.
When they learned about a rash of consumer complaints against Vtech several years ago, Bacon said, the Chawlas began “aggressively trying to clean this up” by, among other things, reaching out to law enforcement officials in the United States and India.
“They were bamboozled by Mrs. Chawla’s brother-in-law in India,” he said.
Senior advocates and law enforcement officials say fraud attempts aimed at older Americans are at or near record levels, powered by a range of technologies — robocalls, pop-up computer messages, and fake caller IDs that can make incoming calls appear local.
Massachusetts officials say the Vtech case was sophisticated, employing a network of third parties in the United States and India, and among the most serious they’ve seen.
In the attorney general’s complaint, prosecutors detailed a “brazen computer tech support scam” in which Vtech “causes pop-up advertisements to appear on consumers’ computers that mimic operating system dialog boxes.” The ads falsely claim the computers are malfunctioning or infected with viruses and offer to fix them for a fee, typically in the form of credit card or electronic check payments of hundreds of dollars for one to three years of protection, the complaint said.
An affidavit from Edward Hutchinson, 71, of Watertown, recounted that he was working on a spreadsheet in 2016 when his computer screen went blue and made “siren noises.” A phone number popped up instructing him to call Vtech for immediate assistance, the affidavit said, and while “in semi-panic mode” Hutchinson talked to someone who asked a series of questions — including his age — and then let the support person remotely access his computer.
“I’m not sure what this person did when he was controlling my computer,” he said. “I don’t believe he did anything constructive or helpful. I believe he was just looking through [files] on my computer.” Hutchinson used a credit card to pay $199.99 for “one year of protection.” He later received dozens of calls from people seeking to “follow up” on his computer problems.
The attorney general’s lawsuit seeks to disgorge profits from the scheme, unspecified civil penalties, and restitution to victims. Healey’s office also has set up a special phone line, asking people who believe they lost money due to the Vtech scam to call 617-963-2628.
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