Tsvetnenko charged with fraud in US court

25/07/2016 - 13:15

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Local entrepreneur Zhenya Tsvetnenko has tendered his resignation from the boards of listed companies DigitalX and Tech Mpire after being indicted by US prosecutors for participating in a scheme to defraud mobile phone customers.

Local entrepreneur Zhenya Tsvetnenko has been charged with fraud in a US federal court. Photo: Attila Csaszar

Local entrepreneur Zhenya Tsvetnenko has tendered his resignation from the boards of listed companies DigitalX and Tech Mpire after being indicted by US prosecutors for participating in a scheme to defraud mobile phone customers.

Mr Tsvetnenko was charged in the Manhattan Federal Court on Friday alongside US-based Fraser Thompson and Francis Assifuah, all of whom ran unnamed digital content providers.

All three were added to a pre-existing case against five other people.

The men are accused of participating in a scheme to charge mobile phone customers millions of dollars in monthly fees for unsolicited, recurring text messages without the customers’ knowledge or consent – a practice known as ‘auto-subscribing’.

The schemes operated between 2011 and 2013.

Mr Thompson was arrested on Friday, while Mr Assifuah was arrested in April.

Mr Tsvetnenko resides in Perth and has not yet been arrested.

The three men have been charged with conspiracy to commit wire fraud, mail fraud and money laundering, each of which carries a maximum sentence of 20 years in prison.

Today, DigitalX announced Mr Tsvetnenko had tendered his immediate resignation as chairman of the company as well as relinquishing his executive role, while Tech Mpire said he had resigned as its non-executive director.

Both companies cited ‘personal reasons’ for his departure.

Mr Tsvetnenko was a 40under40 award winner in 2011 and was named on the BRW Young Rich List in 2014, with an estimated fortune of $67 million.

DigitalX has brought in its existing vice-president of business development and investor relations, Leigh Travers, to join the board as an executive director.

DigitalX shares plummeted on the news, down 36 per cent to 8.9 cents each, while Tech Mpire shares fell 6.6 per cent to 35 cents each, at 1pm.

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