Every technology which can be used for good can be used for bad as well and that is what I couldn’t help but think about when I learned a federal judge sentenced Vinod Tonangi and Harjeet Bhambhani to over a year in prison for $4.4 million in VoIP fraud. They were further ordered to serve three years of supervised release, and Tonangi owes $1.7 million in restitution.

Using companies Paradise Communications, Reach Communications and Airtel Holdings they resold wholesale telecom service which didn’t exist according an article in the Wall Street Journal.

They both pleaded guilty to one count to commit wire fraud.

Unfortunately they also damaged the trust level of the wholesale telecom market – and whether this is permanent damage or not remains to be seen. I expect upstart telecom wholesalers to have to deal with more red tape to prove they are legitimate going forward.