Screwber and Fake GPS: The $40 Million Dollar Ridesharing Fraud Scheme

Two men have been charged with conducting a six-year scheme in which they allegedly scammed a ridesharing company and customers out of $40 million in fraudulent “surge” fees by selling hacked smartphones and fake GPS applications to hundreds of rideshare drivers.

An indictment unsealed Wednesday in federal court in Brooklyn charges Eliahou Paldiel and Carlos Arturo Suarez Palacios with wire fraud and money laundering conspiracies. According to the office of Breon Peace, US Attorney for the Eastern District of New York, the two men are charged with equipping more than 800 rideshare drivers with devices that enabled them to fraudulently obtain “surge” fees and to manipulate legitimate rideshare applications to enrich themselves.

The indictment alleges that the scheme ran between November 2018 and August 2024. Not only did Paldiel and Suarez allegedly defraud an unnamed rideshare company’s users and drivers by causing passengers to pay millions of dollars in fraudulent “surge” fees but they also allegedly deprived legitimate rideshare drivers of their true share of “surge” fares and the most lucrative trips. The fraudulent devices and applications they sold for profit enabled their driver co-conspirators to “cherry-pick” high-fare rides by obtaining proprietary information and to “queue” in areas where they were not physically present, court documents claim.

During the course of the scheme, the driver co-conspirators allegedly earned more than $40 million from rideshare customers. Paldiel and Suarez received more than $1.5 million from driver co-conspirators through one peer-to-peer payment service alone, prosecutors claim.

Paldiel was arrested in Brooklyn and Suarez was arrested in Brick Township, New Jersey. In addition to US Attorney Peace’s office, the New York field office of the Federal Bureau of Investigation participated in the case.

The charges are allegations and the defendants are presumed innocent unless and until proven guilty. If convicted, the defendants face up to 20 years in prison on each of the two counts.

“As alleged, 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,” said Peace in the announcement of the arrest.

For almost six years, this alleged conspiracy offered an “unfair financial advantage to more than 800 participants and disrupted the integrity of nationwide rideshare services, earning the participants more than $40 million,” stated FBI Acting Assistant Director Christie M. Curtis.

The unnamed rideshare company operates primarily through its smartphone application, connecting users with drivers for on-demand transportation services. The defendants allegedly sold fake applications to driver co-conspirators on cellular devices that had their security restrictions modified or removed, thereby allowing the installation of applications that the device manufacturer had not made available for the device.

Fake GPS “Spoofing “and Screwber Apps

The prosecutors claim that Fake GPS is a GPS spoofing application developed by the defendants and others. Fake GPS enabled drivers to manipulate or “spoof” their locations and make it appear as if they were located in an area with surging fares when, in fact, they were not.

Another application they allegedly developed, Screwber, provided their co-conspirator drivers with information about prospective rides that was not otherwise available to other drivers prior to accepting such rides. For example, Screwber enabled them to learn destinations and approximate fares, thereby allowing them to cherry-pick only the most profitable rides offered.

By installing outdated versions of the rideshare company’s application, the defendants ensured that the Fake GPS and Screwber applications were not detected by security features implemented in newer versions of the application, prosecutors contend.

Prosecutors indicate that the defendants spoke with one another about their strategy. For example, in November 2018, they say Suarez wrote to Paldiel, “You know Screwber is like drugs .. once you get into it you’ll get withdrawals when you can’t get your fix.” In another message, prosecutors say Paldiel wrote to Suarez regarding the driver co-conspirators, “I get them hooked on the software, even a drug deal[er] throws in a few extra grams of weed in the beginning.”

Officials request that anyone with information related to this case please contact the FBI at NY_RideShareTips@fbi.gov

Topics Fraud