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

The eight-member jury awarded Digicel Haiti $5.4 million in damages for the fraud by UPM Technology and another $3.6 million in punitive damages against the Oregon company, plus $700,000 in punitive damages against the company’s chief executive officer Duy Tran.File art
A federal jury in Portland has awarded nearly $10 million in damages to a telecommunications company in Haiti, finding an Oregon company defrauded it of millions of dollars owed on international calls.
The jury found that Hillsboro-based UPM Technology Inc. and its chief executive officer used technology that tricked the Haitian phone network into charging local or discounted rates for calls placed 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 longstanding legal battle between the two companies.
Before Digicel Haiti filed the suit in 2015, it sought the help of Haitian police, who arrested several men in Haiti in 2011. They were accused of a phone piracy to avoid international phone charges, known as bypassing, according to court records.
Court testimony showed that UPM bought or obtained Digicel Haiti SIM cards, or subscriber identity cards, from third parties in Haiti and then sent the cards to UPM in Oregon. UPM then placed multiple 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 began in the United States and was sent over the internet to a radio transmitter in Haiti, making the call appear as if it originated as a local call on Digicel Haiti’s network, according to Digicel Haiti’s lawyers. UPM shipped equipment it disguised as DVD players to Haiti that were used to connect the internet-based calls to Digicel Haiti’s network, according to Digicel Haiti’s lawyers.
The other type of call also began in the United States with UPM registering Digicel Haiti SIM cards with Digicel Haiti’s discounted calling program called “Roam Like You Are Home.” Using the registered SIM cards, UPM would route an international call as a call from a roaming Digicel Haiti subscriber signed up for the discounted program, concealing the original international caller. As a result, the call was charged at the discount rate.
Digicel Haiti intended each SIM card to be used by a different person. Instead, UPM used what’s called “human behavior software,” that simulated use by a person, and placed multiple SIM cards into a computer server. By doing this, UPM connected calls made in the United States to Haiti customers of Digicel Haiti, resulting in a local or discounted rate for these calls, rather than the higher rate for incoming international calls.
“The calls were either not billed or only billed as local calls made from within Haiti,” according to attorney Robert C.L. Vaughan, who represented Digital Haiti.
The jury found UPM was responsible for 75% of the fraud and Tran for the remaining 25% of the fraud.
Digicel Haiti’s lawyers had sought much more in damages, telling the jury the telecommunications provider had suffered lost revenue in excess of $50 million from 2011 to 2014. Digicel Haiti argued that each minute of bypass traffic 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 couldn’t base them entirely on estimated lost revenues.
“Digicel Haiti has not identified or provided any supporting data to substantiate its claimed damages, and the bare estimates of witnesses (without any underlying evidentiary basis) is clearly insufficient to reasonably establish the existence and amount of lost net profit,” UPM’s lawyer Christopher Savage argued in a court filing.
A separate regulatory matter is also pending before the Federal Communications Commission. Savage argued the company was doing what the commission encouraged it to do.
“United States law can’t be found to hold illegal something that the FCC itself is encouraging, which is the use of technology to find ways around those 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 having another provider complete it.
Savage said UPC has not decided whether to wait until a FCC ruling is made before considering whether to appeal the jury verdict.
— Maxine Bernstein
Email mbernstein@oregonian.com; 503-221-8212
Follow on Twitter @maxoregonian
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