BROOKLYN, N.Y. — Two individuals have been charged in a wide-ranging scheme to defraud rideshare customers and drivers, according to an indictment unsealed today in federal court in Brooklyn. Eliahou Paldiel and Carlos Arturo Suarez Palacios (Suarez) face charges of wire fraud and money laundering conspiracies for allegedly selling fraudulent applications and hacked smartphones to more than 800 rideshare drivers, enabling them to manipulate GPS locations and fraudulently obtain surge fees.
Paldiel was arrested in Brooklyn, while Suarez was taken into custody in Brick Township, New Jersey. Both defendants will be arraigned before U.S. Magistrate Judge Marcia M. Henry.
According to U.S. Attorney Breon Peace, “The defendants sought to enrich themselves by corrupting the rideshare market at the expense of unsuspecting passengers and hardworking drivers who play by the rules.” Peace emphasized that the charges demonstrate that complex schemes designed to exploit technology will be met with legal consequences.
The indictment alleges that between November 2018 and August 2024, Paldiel and Suarez orchestrated a scheme that defrauded a multinational rideshare company, referred to as “Rideshare Company-1,” as well as its users and drivers. The defendants developed and sold applications like “Fake GPS” and “Screwber,” which allowed drivers to spoof their locations, manipulate surge pricing, and cherry-pick the most lucrative rides, resulting in more than $40 million in illicit gains.
The fraudulent devices, known as “Scheme Devices,” were sold to drivers after being modified, or “jailbroken,” to bypass security measures. These devices ran outdated versions of the rideshare application, enabling the fraudulent apps to go undetected. The defendants provided instructions to drivers on how to avoid detection while using these applications.
FBI Acting Assistant Director in Charge Christie M. Curtis stated, “The FBI will continue to dismantle all fraudulent schemes, even as criminals attempt to create innovative scams for selfish gains.”
If convicted, Paldiel and Suarez each face up to 20 years in prison on each count of wire fraud and money laundering conspiracy.