Jury awards nearly $10 million in damages to Haitian telecommunications network defrauded by OR

A federal jury in Portland has awarded nearly $10 million in damages to a telecommunications company in Haiti, finding that an Oregon company defrauded it of millions of dollars owed on international calls.

The jury found that Hillsboro-based UPM Technology Inc. and its CEO used technology that tricked the Haitian telephone network into charging local or discounted rates for calls made to Haiti from the United States.

Jurors awarded Digicel Haiti $5.4 million in compensatory damages and $3.6 million in punitive damages against the Oregon company, plus $700,000 in punitive damages against CEO Duy Bruce Tran.

The trial lasted a week before U.S. District Judge Michael H. Simon. The eight jurors began deliberations Friday afternoon and returned the verdict Monday afternoon.

The case capped a long-running legal battle between the two companies.

Before Digicel Haiti filed the lawsuit in 2015, it sought the help of Haitian police, who arrested several men in Haiti in 2011. They were charged with phone hacking to avoid international phone charges, known as bypass name, according to court records.

Court testimony showed that UPM purchased or obtained Digicel Haiti SIM cards, or subscriber ID cards, from third parties in Haiti and then sent the cards to UPM in Oregon. UPM then placed several SIM cards in a server, activated the cards with software, and used them to initiate two types of calls from the United States to Haiti.

One type of call originated in the United States and was sent over the Internet to a radio transmitter in Haiti, making the call appear to be from a local call on Digicel Haiti’s network, according to lawyers for Digicel Haiti. UPM shipped equipment disguised as DVD players to Haiti that was used to connect Internet calls to Digicel Haiti’s network, according to lawyers for Digicel Haiti.

The other type of calling has also started in the United States with UPM registering Digicel Haiti SIM cards with Digicel Haiti’s discount calling program called “Roam Like You Are Home”. Using the registered SIM cards, UPM would route an international call as a call from a Digicel Haiti roaming subscriber enrolled in the discount program, masking the original international caller. Accordingly, the call was billed at the discount rate.

Digicel Haiti has planned for each SIM card to be used by a different person. Instead, UPM used what is called “human behavior software”, which simulates usage by a person, and placed several SIM cards in a computer server. In doing so, UPM connected calls made in the United States to Haitian customers of Digicel Haiti, resulting in a local or reduced rate for those calls, rather than the higher rate for incoming international calls.

“Calls were not billed or only billed as local calls made from Haiti,” according to attorney Robert CL Vaughan, who represented Digital Haiti.

The jury found that UPM was responsible for 75% of the fraud and Tran for the remaining 25% of the fraud.

Lawyers for Digicel Haiti had sought far more damages, telling the jury that the telecom provider suffered a loss of revenue of more than $50 million from 2011 to 2014. Digicel Haiti argued that every minute of traffic circumvention should have generated revenue at the rate of 23 cents per minute.

UPM argued that Digicel Haiti had no records to support its alleged losses and could not base them entirely on estimated revenue losses.

“Digicel Haiti has not identified or provided any supporting data to substantiate the damages claimed, and the bare witness estimates (without any underlying evidentiary basis) are clearly insufficient to reasonably establish the existence and amount of the lost net profit. “said UPM attorney Christopher Savage. pleaded in a court case.

A separate regulatory matter is also pending before the Federal Communications Commission. Savage maintained that the company was doing what the commission encouraged it to do.

“The law of the United States cannot be considered illegal something that the FCC itself encourages, namely the use of technology to find ways around these high termination rates,” Savage said after the verdict. . A termination rate is the price paid when a call out of the country is terminated by another provider.

Savage said the UPC had not decided to wait for an FCC ruling before considering appealing the jury’s verdict.

–Maxine Bernstein

Email [email protected]; 503-221-8212

Follow on Twitter @maxoregonian

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