The FCC recently issued a Notice of Apparent Liability (NAL) to IT Connect and its principal, Richard Jackowitz, for brokering 210 toll free numbers for fees ranging from $375 to $60,000 per number. The NAL finds that Jackowitz and IT Connect willfully and repeatedly violated §52.107 of the FCC’s rules which prohibits hoarding, including data brokering (the selling of a toll free number by a private entity for a fee). The NAL assesses the maximum forfeiture allowed by law, $16,000 for each brokered toll free number, due to the egregious nature of the violation.
What Exactly Did IT Connect Do Wrong?
IT Connect and Richard Jackowitz sold, or offered to sell, toll free numbers to a law firm for substantial fees. The FCC’s investigation uncovered four separate contracts, signed by Mr. Jackowitz as chief executive officer or president of IT Connect in which it sold over 32 toll free numbers to the law firm for fees ranging from $375 to $10,000 per number. In addition, the FCC found evidence that Mr. Jackowitz, through IT Connect, solicited the law firm to purchase 178 other toll free numbers for fees ranging from $575 to $60,000 per number but no sale was ever consummated. The FCC also discovered other blanket offers to sell bulk sets of toll free numbers at $550 per number.
Why Was The Fine So High?
The FCC found the conduct at issue especially egregious because IT Connect and Richard Jackowitz had previously been issued a Citation, a NAL, and a Forfeiture Order for similar violations. In addition, the FCC found emails in which Mr. Jackowitz admitted to several other violations that took place outside the applicable statute of limitations period, including the sale of a single toll free number to another entity for $1,175,000.
The FCC said that the fact that Mr. Jackowitz and IT Connect continued to engage in a large number of violations despite having been warned and assessed forfeitures for similar conduct “strongly suggests that they acted with deliberate and intentional disregard for the Commission’s rules. These egregious actions warrant the maximum possible forfeiture for each toll free number sold or offered for sale.”
What About the Resp Org Involved?
The FCC said that Mr. Jackowitz and IT Connect employed several Responsible Organizations (Resp Orgs) to affect their brokering practice but did not name them. The FCC said it would “employ all tools available to us in cases like this, including limiting any ‘RespOrg’s allocation of toll free numbers or possibly decertify[ing] it as a Resp Org’ and enjoining violators from obtaining additional toll free numbers from the numbering administrator’s spare pool of toll free numbers.”
Why Was Richard Jackowitz Held Personally Liable?
The FCC’s evidence indicated that Mr. Jackowitz brokered the toll free number in both his personal capacity and on behalf of IT Connect. The FCC found that Mr. Jackowitz failed to adhere to corporate formalities and comingled assets, making it clear that IT Connect merely functioned “as an instrumentality of Mr. Jackowitz.” Specifically, the FCC noted that Mr. Jackowitz: (1) regularly used his personal e-mail account to solicit the law firm to purchase
toll free numbers; (2) directed the law firm to submit payments to him in his own name, and specifically requested that IT Connect’s corporate name be excluded; (3) on some occasions directed that the payment be submitted in the name of, or to the personal bank account of, his wife; and (4) asked that payments be mailed to his personal residence.
In addition, the FCC pointed to legal precedent allowing it to hold Mr. Jackowitz personally liable for the actions of IT Connect because he personally participated in its conduct and otherwise had the authority to control its actions.