Some of these consumers were billed without ever having had any prior contact with these companies — not a click, not a sign-up, not even a wrong number — just charges appearing on their phone bills out of nowhere.

The $50 Million Text Message Scam

How a California operator and five shell companies spent years quietly stealing from Americans’ phone bills — then lied their way back in after getting caught.

They Charged You for Horoscopes You Never Asked For

The scam had a name in the industry: cramming. That means quietly inserting unauthorized charges into a consumer’s phone bill, buried among dozens of other line items, in the hope that most people will just pay without looking closely. The defendants in this case turned cramming into a full-scale corporate enterprise, running it across AT&T, Sprint, T-Mobile, and Verizon simultaneously.

The products being sold — or rather, being secretly billed — were subscriptions to Premium SMS text messages: celebrity gossip alerts, “fun facts,” horoscopes, quiz notifications, and romance tips. Each subscription cost either $9.99 or $14.99 per month, renewed automatically every month, and was listed on phone bills in “abbreviated and confusing form” specifically designed to evade detection.

For context: a family that went undetected for just six months on a single $9.99 subscription would have lost $59.94 (nearly two full tanks of gas) to a service they never used, never wanted, and never agreed to receive.

The Technical Exploit: Turning Carriers Into Unknowing Accomplices

Mobile carriers had a legitimate infrastructure for billing third-party digital content through a system called Premium SMS. A content provider would apply to a carrier, get approved for a five- or six-digit “short code,” and use it to bill consumers who had genuinely opted in. The safeguard built into this system was called “double opt-in” — a consumer had to take two separate, deliberate steps to activate a subscription.

These defendants skipped both steps entirely. They obtained consumers’ phone numbers through two primary methods: fake “freebie” websites promising $1,000 Walmart gift cards or $500 Target gift cards in exchange for personal information, and in some cases, simply pulling phone numbers from somewhere and starting to bill people with no prior contact at all. They then told carriers those consumers had subscribed, which was a lie.

A third-party “aggregator” sat between the content providers and the carriers, routing billing. The carriers passed money back through this chain — minus their fees — to the content providers. That is how charges on millions of Americans’ phone bills became revenue for a handful of California LLC owners.

Six Companies, One Web, One Ringleader

Makonnen Demessow Kebede ran MDK Media Inc. out of Gardena, California — operating it under at least three additional names: SE Ventures, GMK Communications, and EMG. MDK started cramming charges in 2010, four years before the FTC filed suit, and generated $19 million ($19 million — enough to pay a year’s worth of groceries for roughly 5,000 families) in revenues directly. Kebede served as sole signatory on every bank account, controlled every domain name, and — crucially — personally recruited every other defendant to expand the operation.

The satellite companies formed a constellation of liability shields. Sarah Ann Brekke ran Tendenci Media LLC out of Los Angeles using mail drop addresses — fake office fronts designed to obscure the company’s real location. Christopher Thomas DeNovellis ran Mindkontrol Industries LLC out of San Francisco. Wayne Calvin Byrd II ran Anacapa Media LLC, and also helped found both Tendenci and Bear. James Matthew Dawson ran Bear Communications LLC and also helped form Tendenci and Anacapa. Casey Lee Adkisson ran Network One Commerce Inc. out of San Diego, a Nevada corporation with a California address.

Every single one of these individuals served as the sole signatory on their company’s bank accounts — meaning every dollar that came in flowed through one set of hands and one set of decisions. This was deliberate architecture. Each entity ran its own short codes, maintained its own websites, and could be sacrificed individually if a carrier pulled the plug — while the broader network kept running.

The Revenue Share: MDK Got a Cut of Everything

The arrangement between MDK and its satellite operators was financially explicit. Tendenci, Mindkontrol, Anacapa, Bear, and Network One generated revenue from their cramming activities and then forwarded a substantial portion to MDK. The remaining cut stayed with the satellite operators as compensation for running the campaigns. MDK was, in effect, a franchise operation for phone bill fraud.

Total confirmed: over $62 million ($62 million — more than what 1,240 Americans earning the median income would collectively take home in a single year).

The Non-Financial Ledger: What Money Can’t Measure

Start with the person who never had any contact with these companies at all. The FTC complaint explicitly documents that some consumers received unsolicited text messages from these defendants and were simultaneously charged on their phone bills. There was no website visit, no fake gift card form, no accidental click. The defendants simply had their number, decided to start billing, and did. That is theft. It is theft executed with the confidence of people who knew that most victims would never notice.

For the people who did notice, the FTC documents what happened next: a “frustrating and time-consuming” process of disputing charges with both the carrier and the third-party content provider. The complaint describes consumers who were crammed for “multiple months before noticing” — meaning someone might have been drained of $9.99 or $14.99 every single month for three, four, or five months before the pattern registered on a bill they were already overwhelmed trying to parse. Even after all that effort, the FTC found that some of these consumers still “were unable to obtain a full refund.”

Consider the population most vulnerable to this. The charges were intentionally designed to hide in phone bills, listed in “abbreviated and confusing form.” Elderly consumers living on fixed incomes who have set up autopay — precisely the responsible, bill-paying Americans these operators counted on — had no natural checkpoint to catch the fraud. A $14.99 monthly drain, undetected for a year, equals $179.88 ($179.88 — nearly a week’s worth of groceries for a family of four) gone with no product, no service, and no recourse.

Then there is the specific indignity of the fake freebie trap. These websites offered a $1,000 Walmart gift card and a $500 Target gift card. The people who clicked on those links were people who genuinely needed $1,000 or $500. They were trying to get ahead on rent, on groceries, on gas. Instead, they handed over their phone number and personal information to operators who were already preparing to bill them indefinitely. The promise of relief became the mechanism of exploitation. That is not just fraud. It is a deliberate targeting of financial desperation.

What the Court Documents Actually Say

“Defendants have operated a scam in which they have ‘crammed’ unauthorized charges onto consumers’ mobile phone bills. Many consumers have paid their mobile phone bills without ever noticing these charges; others have paid and then unsuccessfully disputed the third-party charges without obtaining a refund; still others have disputed the charges and succeeded in having them removed only after substantial effort. Defendants have made millions of dollars by engaging in these deceptive and unfair acts and practices.”

FTC Complaint, Paragraph 19

“Other consumers are billed by Defendants without having had any prior contact with Defendants. In these instances, Defendants begin sending to the consumers’ mobile phones unsolicited text messages that many consumers assume have been sent in error. Defendants begin cramming charges on consumers’ mobile phone bills contemporaneous with the sending of these unsolicited text messages.”

FTC Complaint, Paragraph 27

“Defendants misrepresent to wireless phone carriers that consumers to whom they have sent unsolicited text messages have knowingly subscribed to Defendants’ text message subscription service and authorized the placement of Premium SMS charges on their phone bills.”

FTC Complaint, Paragraph 28

“Despite these sanctions, Defendants have maintained their access to these wireless phone carriers’ Premium SMS billing platforms and have continued to place charges on consumers’ mobile phone bills. Defendants have accomplished this by, among other things, providing false information to the wireless phone carriers and operating under different names.”

FTC Complaint, Paragraph 32

“The monthly charges for these subscriptions are often difficult to find in the consumer’s mobile phone bill and listed in an abbreviated and confusing form. Many consumers do not notice Defendants’ charges included on their bills and pay their bills in full, thus paying the unauthorized charge without realizing it. Further, the charges recur unless and until the consumer takes action to unsubscribe.”

FTC Complaint, Paragraph 29

A Four-Year Expansion With Zero Accountability

The cramming operation did not start small and get big by accident. It followed a deliberate multi-year expansion strategy, adding new corporate entities as each previous entity faced carrier bans, then using those new entities to continue operating on the same platforms under new names. The timeline below shows how the scheme grew even as sanctions mounted.

Societal Impact: Who Gets Hurt and Who Keeps Profiting

Economic Inequality: The Scam Was Designed to Hit Those With the Least

The mechanics of this scam are a masterclass in targeting the economically vulnerable. The fake gift card websites — promising $1,000 Walmart gift cards and $500 Target gift cards — did not attract wealthy consumers who browse premium retail sites. They attracted people searching for real relief from real financial pressure. The FTC complaint identifies multiple such websites: walmart.rewardhubzone.com, target4.net, grandsavingscenter.com, free-coupons-everyday.com, retailbrandprize.com, onlinegiftrewards.com, consumergiftspot.com, bestbuyraffle.com, freegasfairy.com, and iphone5.newrewardsdaily.com. The range of those sites — Walmart, Target, free gas, free coupons — describes a demographic: working-class Americans shopping on a budget.

The recurring, automatic nature of the charges compounded the inequality. A flat $9.99 monthly fee represents roughly 3% of a $400 weekly paycheck — meaningless to a high earner, genuinely damaging to someone on the margin. The FTC noted these charges recur indefinitely “unless and until the consumer takes action to unsubscribe” from a service they never subscribed to in the first place. That is money permanently removed from household budgets, redirected into the bank accounts of a handful of California LLCs.

The scheme also exploited the structural complexity of phone bills as a tool of extraction. Phone carriers — AT&T, Verizon, Sprint, T-Mobile — were used as unwitting collection agencies, lending their billing credibility to fraudulent charges. Consumers saw a charge from their trusted carrier and assumed it was legitimate. The defendants understood this psychology and built the entire operation around it. The carrier’s authority became a weapon against the carrier’s own customers.

Public Health: The Hidden Cost of Financial Anxiety

The FTC complaint documents that even consumers who caught the charges and fought back experienced harm. The dispute process was “frustrating and time-consuming” — and in many documented cases, unsuccessful. Financial stress of this kind is not abstract: research consistently links unexpected financial losses, feelings of financial helplessness, and failed attempts to recover money to measurable increases in anxiety, sleep disruption, and depression. The FTC’s own language — “substantial injury to consumers that consumers cannot reasonably avoid themselves” — acknowledges a form of helplessness built directly into the scheme’s design.

The population that went undetected — the majority of victims who simply paid without noticing — carried that financial injury forward without even knowing why their budget felt tight. This is the specific cruelty of cramming at scale: it removes money from people’s lives invisibly, denying them even the ability to correctly identify why they cannot quite make the numbers work at the end of the month. That gap between expected and actual financial position is itself a documented stressor with real health consequences.

What $62 Million Looks Like in Real Life

A press release about MDK Media running this scam can be found on the FTC’s website: https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-obtains-orders-halting-mobile-cramming-scheme

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