Federal authorities have arrested a 26-year-old North Carolina man on charges that he defrauded more than 1,000 long-distance telephone service subscribers in a nationwide cut-rate phone service scheme based in Baltimore County.
Hal Kitt Snyder, 26, was arrested Wednesday and released the following day on $50,000 bond from the Graven County Jail in New Bern, N.C.
Postal authorities said Snyder pleaded guilty to mail fraud last year for setting up a similar scheme called Comp Tell and was sentenced to five years in prison by a federal judge in North Carolina, but remained free on a $10,000 appeal bond.
Last July, he allegedly set up Florist Communications in Garrison, Md. A warrant issued in Baltimore alleges that before he left the area five months later, he had defrauded newspapers, TV stations, magazines, telephone equipment companies and long-distance subscribers of more than $400,000.
Postal authorities, who conducted an eight-month investigation, said Snyder first advertised low-cost long-distance service in the Baltimore newspapers, putting up enough money to establish credit with the papers and phone equipment suppliers. Postal inspectors said he used the newspaper ads to help him take out ads in a number of other publications around the country, including the New York Times. He was also able to secure credit to buy long-distance lines and telephone switching equipment, the postal authorities said.
One postal inspector said Snyder provided some service, "but not until the end of October. It was so poor and so different from what he had advertised that hundreds of people asked for refunds. They never got any."
Postal inspectors said that 85 percent of those allegedly defrauded were businesses, many in the New York City area.
Synder left the area in December, taking with him the equipment he had bought, according to authorities, and was in the process of setting up another low-cost long-distance phone operation in Raleigh, N.C., called The 800-Club, when he was arrested.
If convicted of the latest charges against him he could be sentenced to as much as five years in prison and a $50,000 fine.