nicolaos kantartzis statement of facts

8/4/2019 Nicolaos Kantartzis Statement of Facts

1/3

ATTACHMENT A

STIPULATED FACTS - UNITED STATES v. NICOLAOS KANTARTZIS

If this matter had proceeded to trial, the government would have proven thefollowing beyond

a reasonable doubt. The parties agree that thefollowingfacts do not encompass all of the facts that

would have been proven had this matter proceeded to trial.

Since at least 1995, defendant NICOLAOS KANT ARTZIS has been the President and sole

owner of Federal Telephone Corporation Incorporated ("FTCI"), which he operated out of his

residence at 8903 Transue Drive, Bethesda, Maryland. As of January 2011, KANTARTZIS and

FTCI owned and controlled approximately 165payphones located at various businesses and on the

streets in Montgomery County and Prince George's County, Maryland and in the District of

Colwnbia, including locations in Kensington, Silver Spring, Gaithersburg, Hyattsville, and

Rockville, Maryland.

Federal ~gulations require that each owner of a toll-free phone number pay the owner of a

< - ~ & J ~ payphone $.49,l1'or each completed toll-free phone call placed from his payphone. This payment/) ~ is commonly called "dial around compensation."

\ Between in or about January 2005 and in or about July 2011, KANTARTZIS devised and

intended to devise a scheme and artifice to defraud the victims identified below. The defendant used

a "polling" computer server maintained at 8903 Transue Drive, Bethesda, Maryland to program his

payphones to robotically place re~ated phone calls to toll-free phone nwnbers, for the purpose of

fraudulently acquiring the $.49~ (lial around compensation fee for each phone call. In many

instances, KANT ARTZIS programmed his payphones to call toll-free phone nwnbers in a repeating

pattern, consisting of blocks of approximately ten calls within approximately three minutes followed

by approximately five hours of no toll-free calls. These calls typically lasted only a few seconds in

duration. Examples of these fraudulent toll-free phones calls include:

KANT ARTZIS controlled a payphone with phone nwnber 30 1-942-9816 located in

Wheaton, Maryland. On August 14,2008, KANT ARTZIS caused this payphone to

fraudulently dial toll-free phone nwnber 1-800-333-4636, belonging to U.S. General

Services Administration, located in Lakeland, Florida, for the purpose of acquiring

$.495 in dial around compensation.

KANT ARTZIS controlled a payphone with phone number 202-722-9024 located at

Super Dollar at 5918 Georgia Avenue N.W., Washington, D.C. From January 1,

2008 through January 31, 2008, KANTARTZIS's program for this payphone

instructed this payphone to repeat a pattern of placing approximately ten calls to toll-free phone numbers followed by five hours of no calls, which was immediately

followed by a call to 301-365-8184, KANTARTZIS's business phone nwnber.During this time, this payphone made 2,669 outgoing calls, of which 1,688 (63%)

were to toll-free nwnbers beginning with 800, 866, 877, and 888. Of the 1,688outgoing toll-free calls, 1,577 (93%) had durations of 10 seconds or less. One

hundred and forty-four unique outgoing toll-free nwnbers were identified, of which

Case 8:11-cr-00511-RWT Document 7-1 Filed 09/20/11 Page 1 of 3


2/3

21 were called one time with durations typically exceeding one minute. The

remaining 123 outgoing toll-free numbers were called multiple times. This calling

pattern continued in subsequent months.

KANT ARTZIS controlled a payphone with phone number 301-208-9805 located at

Morazan Grocery, 32 N. Summit Avenue, Suite B, Gaithersburg, Maryland.

KANTARTZIS programmed this payphone to make approximately 143 calls to

toll-free phone numbers between December 27, 2010 and December 29, 2010.

KANT ARTZIS programmed the phone to make ten calls to toll-free phone numbers

and then wait five hours to repeat the pattern. Video surveillance from this time

showed that no user was physically placing a call at the payphone at the time any of

these calls were made.

KANTARTZIS controlled a payphone with phone number 301-762-9719 located at

Rockville Sportsplex, 60 Southlawn Court; Rockville, Maryland. KANT ARTZIS

programmed this payphone to make approximately 144 calls to toll-free phone

numbers between April 20, 2011 and April 22, 2011. KANT ARTZIS programmedthe phone to make ten calls to toll-free phone numbers and then wait five hours to

repeat the pattern. Video surveillance from this time showed that no user was

physically placing a call at the payphone at the time any of these calls were made.

In fact, many of these calls were made after the business was closed and when the

video shows that the building was dark and the building housing the payphone was

locked.

KANTARTZIS controlled a payphone with phone number 301-762-9783 located

near the men's room in O'Brien's Pit Barbeque restaurant located at 387 East Gude

Drive, Rockville, Maryland. KANT ARTZIS programmed this payphone to make

approximately 1,200callsto toll. free phone numbers between March 1,2008 throughMarch 31,2008. Most of these calls were 10 seconds or less in duration. During this

same time, approximately 60 calls were made to non-toll-free numbers. Calls made

to toll-free numbers were clustered, with typically five-hour gaps between clusters.

During this time period, KANT ARTZIS programmed these payphones to made

hundreds of calls to toll. free phone numbers during hours that the restaurant was

closed, specifically, between the hours of 9:30 PM and 11:00 AM. Clusters of

toll-free calls were made at approximately 2:00 AM, 3:00 AM, 4:00 AM, 7:00 AM,

8:00 AM, 10:00 PM, and 11:00 PM..

KANT ARTZIS programmed his payphones to call over 200, but less than 250 victims.

These victims included, among many others, various federal agencies - including the U.S. GeneralServices Administration, the U.S. Department of Labor, the U.S. Department of Education, and the

Internal Revenue Service - as well as Dell Computer, the District of Columbia Homeless Shelter

Hotline, various financial institutions, and various airlines. During the scheme to defraud,

KANT ARTZIS caused payphones within Maryland to transmit by means of wire in interstate

2



3/3

~

Date

commerce signals and sounds for the purpose of executing the scheme to these entities, which were

located outside of Maryland.

Between January 2005 and April 20 11, K A N T A R T Z I S received at least $4,000,000 in dial

around compensation paid by victims of his fraudulent scheme.

I have read this statement of facts, and have carefully reviewed it with my attorney.

I acknowledge that it is true and correct.

~~--

Nicola~artzis

I am Nicolaos Kantartzis's attorney. I have carefully reviewed the statement of facts with

him.

~~.~David B. Irwin, Esq.

3


nicolaos kantartzis statement of facts

Documents