Federal prosecutors in Brooklyn accused two software developers in Queens of a sweeping, six-year scheme in which they sold shady apps – including one called Screwber – that allowed hundreds of drivers to swindle passengers out of $40 million. Following an FBI investigation, officials in late-August indicted Eliahou Paldiel, 52, of Queens, and Carlos Arturo Suarez Palacios, 54, of Brick Township, NJ, on federal wire fraud and money laundering charges, according to court records. Both men pleaded not guilty and were released on bail. If convicted, they each face up to 20 years in prison.
In court documents, prosecutors outlined how Paldiel and Suarez allegedly orchestrated an elaborate plot to sell hacked smartphones and access to fraudulent apps to more than 800 app-hail drivers from November 2018 through August 2024. The illicit apps allowed drivers to fake their locations to fraudulently obtain excessive “surge” fees. The hacked smartphones were manipulated to allow apps not available on official app stores, with two programs called “FakeGPS” and “Screwber.” Drivers used the former app to make it look like they were driving in areas with surge fees, while Screwber provided drivers with info about fares that was otherwise not accessible – including prospective passengers’ destinations and the estimated fare for a trip, court papers show.
The indictment does not explicitly name Uber, but spokesman, Josh Gold, confirmed to Crain’s New York Business that the company was the target of the alleged fraud. Prosecutors said that access to the unauthorized info enabled drivers to cherry-pick the most lucrative fares – to the detriment of drivers playing by the rules.
All told, the drivers scammed passengers out of $40 million, and Paldiel and Suarez received more than $1.5 million from drivers to subscribe to their services, said law enforcement officials. The hacked phones, according to court papers, were sold near Paldiel’s Queens home for $600 per device, along with a $300 monthly subscription fee to Screwber and a one-time $50 charge to access the FakeGPS app.
The indictment states that, during two days in early June, law enforcement officials observed “lengthy lines of drivers” waiting to meet with Paldiel in Queens, including drivers with NYC Taxi & Limousine Commission (TLC) license plates.
In a statement, TLC Commissioner David Do said the city is working with the FBI to identify city drivers who used the illegal apps to “ensure they never drive for hire in New York City again and, if feasible, recover any overcharges for those harmed.”
Source: Crain’s New York Business
