Who hasn’t groaned when your Uber fare spikes just because it’s rush hour or a popular event just ended? But imagine if that surge was a complete sham, and you were paying extra simply because a driver tricked the system.
That’s precisely what two men allegedly orchestrated, leading to their arrest and federal charges.
Eliahou Paldiel, 52, of Queens, and Carlos Arturo Suarez Palacios, 54, of Brick Township, New Jersey, stand accused of creating a sophisticated scheme to defraud rideshare customers and drivers out of millions. The duo allegedly developed and sold applications that enabled over 800 rideshare drivers to manipulate GPS locations and access surge pricing fraudulently, raking in more than $40 million.
According to the unsealed indictment, from November 2018 to August 2024, Paldiel and Suarez sold hacked smartphones preloaded with two deceptive applications: “Fake GPS” and “Screwber.” These apps allowed drivers to spoof their GPS location, making it appear as if they were in surge-pricing areas, even when they were not. The “Screwber” app also provided drivers with unauthorized information about potential rides, such as the passenger’s destination and estimated fare, allowing them to cherry-pick the most profitable trips.
Federal authorities detailed how the scheme not only defrauded passengers but also deprived honest drivers of their rightful earnings. Paldiel and Suarez, in turn, pocketed over $1.5 million from the drivers involved in the scam through a popular peer-to-peer payment service.
Both men were arrested on Wednesday morning, with Paldiel apprehended in Brooklyn and Suarez in New Jersey. They are expected to be arraigned in federal court in Brooklyn, where they face up to 20 years in prison on charges of wire fraud and money laundering conspiracies.
Breon Peace, the U.S. Attorney for the Eastern District of New York, emphasized the gravity of the charges, noting that the defendants exploited both passengers and drivers who followed the rules.
“There is no such thing as a free ride,” Peace said, highlighting the seriousness of the allegations against Paldiel and Suarez.
The case is being prosecuted by the U.S. Attorney’s Office’s Business and Securities Fraud Section, with the assistance of the FBI, which played a crucial role in uncovering the scam.
As the investigation continues, authorities urge anyone with information related to the case to contact the FBI at [email protected].
Photo by Sora Shimazaki
