5 Facts about the $300mn Sumco Panama Robocall Fine the FCC Does Not Want You to Know

The fight against illegal robocalls is often compared to a game. That is unfortunate; a lot of real harm is done to people who believe the lies told to them by telemarketers and scammers. Their lies will only be defeated by facts, however uncomfortable those facts may be. It is true that the US Federal Communications Commission (FCC) issued the largest fine in its history, worth USD299,997,000, last week. And it is true that the fine is for one of the most egregious illegal robocalling operations ever identified by the US authorities. A consortium of business fronts, including one called Sumco Panama, were used to disguise who was actually responsible for illegal car warranty telemarketing calls that were so numerous they represented 3.5 percent of all US robocall traffic at their peak. But here are five important truths you would never learn by reading the FCC’s press release or the lazy sycophantic journalists that have uncritically repeated it.

1. The FCC wants credit for a ‘groundbreaking’ operation that caught repeat offenders who were caught and released before

From the press release:

“We take seriously our responsibility to protect consumers and the integrity of U.S. communications networks from the onslaught of these types of pernicious calls,” said FCC Enforcement Bureau Chief Loyaan A. Egal. “I want to thank the Enforcement Bureau’s Telecommunications Consumers Division for its groundbreaking work on this case, and we will continue to work with our federal and state partners to hold these entities and others engaged in similar conduct accountable.”

These are nice words. But this fine applies to business entities controlled by a gang that includes Roy Cox and Aaron Jones, both of whom were previously ‘banned’ from making telemarketing calls. Roy Cox was the mastermind behind a nearly identical robocall operation who admitted his guilt in a legal settlement reached in 2013. Back then Cox was prosecuted for making illegal robocalls to sell car warranties whilst hiding behind business fronts in Panama and Hungary, just like the methods used by the Sumco Panama consortium. What is ‘groundbreaking’ about catching and punishing crooks who were already caught and prosecuted for the same unlawful activities a decade ago?

2. The enormous size of the fine is meaningless if you know the guilty cannot possibly afford it

From a press release issued by the Federal Trade Commission (FTC) following the 2013 settlement with Cox:

The settlement order bans Cox from telemarketing and imposes a $1.1 million civil penalty that will be suspended due to his inability to pay. The full penalty will become due immediately if he is found to have misrepresented his financial condition.

Cox negotiated a settlement where he never spent a day in prison, and never paid a penny in fines. For all the trouble they cause, the crooks behind illegal robocall outfits are not multimillionaires. If Cox was not made to pay even a single dollar as punishment in 2013, why should anyone expect that he and his accomplices will be made to pay 300 million times that amount in 2023?

3. The current Chair of the FCC used to criticize the failure to collect huge robocall fines

On August 3, Current FCC Chair Jessica Rosenworcel emphasized that the new FCC fine set a record.

But she had a very different attitude when her predecessor, Ajit Pai, announced a then-record USD225mn fine for illegal robocalls in June 2020. Rosenworcel’s statement in response to that punishment observed how rarely these fines are collected in practice.

…Here’s the signal I see. Over the last several years the FCC has levied hundreds of millions in fines against robocallers just like the folks we have here today. But so far collections on these eyepopping fines have netted next to nothing. In fact, it was last year that The Wall Street Journal did the math and found that we had collected no more than $6,790 on hundreds of millions in fines. Why? Well, one reason is that the FCC looks to the Department of Justice to collect on the agency’s fines against robocallers. We need them to help. So when they don’t get involved — as here — that’s not a good sign.

Writing her response to the Sumco Panama penalty, Rosenworcel chose to be more oblique about the ongoing problem of the Department of Justice not collecting fines.

What happens next? Under the law we will refer this Forfeiture Order to the Department of Justice to collect payment. I hope, however, that Congress will consider giving the FCC authority to go to court and collect these fines ourselves.

Nothing has changed since June 2020, except that Democrats have replaced Republicans at the head of the FCC and the Department of Justice. An impartial analysis would conclude that the failure to collect fines in 2023 remains as unproductive as it was in 2020. The application of different varieties of media spin should not distract from the fundamental flaw in the US legal system that Rosenworcel previously drew attention to. No criminal is deterred by a notional penalty, no matter how severe it is in theory, if they know it will never be imposed in practice.

4. The authorities catch robocallers, release robocallers, but do not monitor former robocallers

The FCC likes to draw attention to how it works with other government agencies to protect customers. But the public does not need an endless list of empty claims about the work being done by government agencies. Nothing will change until somebody applies pressure that forces these agencies to really do the things they claim to do. Rosenworcel previously illustrated the failure of the Department of Justice to collect the fines it is supposed to collect. A similar complaint can be made about the FTC. Two weeks ago the FTC issued a press release to trumpet ‘Operation Stop Scam Calls’. It included the following promise.

“Today, government agencies at all levels are united in fighting the scourge of illegal telemarketing. We are taking action against those who trick people into phony consent to receive these calls and those who make it easy and cheap to place these calls,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, who appeared at a news conference in Chicago announcing the initiative. “The FTC and its law enforcement partners will not rest in the fight against illegal telemarketing.”

Now take a look at the wording of the legal settlement between Roy Cox and the FTC in 2013.


IT IS FURTHER ORDERED that, for the purpose of monitoring Individual Defendant’s compliance with this Order…

C. Plaintiff and the Commission may use all other lawful means, including posing, through its representatives, as consumers, suppliers, or other individuals or entities, to Individual Defendant or any individual or entity affiliated with Individual Defendant, without the necessity of identification or prior notice.

The 2013 settlement meant Cox was banned from making telemarketing calls, and his business activities were supposed to be monitored by the FTC for the following 20 years. This included the freedom for the FTC to pretend to be someone else in order to check if Cox was making telemarketing calls again. But somehow, a completely separate and new investigation into illegal robocalls selling car warranties was needed to discover Cox was one of the key players behind it.

The Sumco Panama consortium closely replicated the model followed by Cox before. It generated five billion calls in total. Those calls sold car warranties, like many of Cox’s previous robocalls. The same telemarketers committed the same crimes to sell the same services without anyone at the FTC joining the dots and asking their compliance monitoring team to make some enquiries about the current business activities of the man at the top of their list of former offenders.

5. This game is not whac-a-mole; it is cat-and-mouse

There are two big differences between the game of whac-a-mole and the game of cat-and-mouse.

  • The assumption in whac-a-mole is that there are many moles to defeat. In cat-and-mouse, you only need one mouse.
  • The cat enjoys the game of cat-and-mouse because it keeps releasing the mouse to chase and catch it again.

The public relations staff at government agencies love to compare the fight against illegal robocalls with whac-a-mole because it gives the public the impression that there is no way to definitively ‘win’ the game. But they could win, because only a small number of opponents need to be defeated, so long as they are permanently defeated.

Men like Cox and Jones illustrate a fundamental misconception about the problem of illegal robocalls: there are very many calls, but that does not mean there are very many crooks behind those calls. On the contrary, the evidence strongly suggests that only a tiny number of career criminals are responsible for the vast majority of illegal telemarketing calls. The number of criminals attracted to this niche crime seem larger in number because organizations like the FCC and the FTC keep issuing announcements each time they catch them… but never say anything about releasing them and failing to monitor what they do after they are released. This makes entertaining work for these government agencies — they catch the mouse over and over and over, and each time they get better at catching the mouse — but they would not need to keep catching the same mouse if it was not left to run wild again.

The media spin from agencies like the FCC is that they will never win the fight against robocallers. This lie is supported by businesses who have a vested interest in generating revenue from a fight that never ends. But they could win. The government could punish the illegal robocallers. Take them out of circulation. Monitor what goes into their bank accounts after they are released. Deter other would-be robocallers. It can be done. The problem is that these government agencies waste year after year playing a different game instead.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.