Two men in New York allegedly masterminded a scheme that defrauded Uber customers out of $40 million through fake surge pricing. Federal prosecutors revealed that the pair sold hacked smartphones and illicit apps to over 800 Uber drivers. For years, these tools apparently allowed drivers to manipulate Uber’s system. The apps charged customers unfairly high fares while drivers pocketed the extra money.

Eliahou Paldiel and Carlos Arturo Suarez Palacios allegedly made over $1.5 million from the scam. According to court documents shared by the New York Post, the fraudsters bragged about their operation in messages. In one exchange, a fraudster compared the appeal of their scheme to a drug addiction. They sold the hacked phones for $600 each. The devices were loaded with three illegal apps that helped drivers deceive Uber’s system.

How the dummy Uber apps worked

One of these apps, “Screwber,” gave drivers access to rider destinations and fares before accepting the trip. This allowed them to choose only the most profitable rides. Another app, “Fake GPS,” allowed drivers to “trick” Uber’s system into thinking they were in high-demand areas. This triggered surge pricing.

Demand for these illegal tools was apparently high. At one point, investigators observed lines of drivers, some with Taxi & Limousine Commission plates, waiting to purchase the devices. On one occasion, over 20 vehicles queued up at Paldiel’s home to get the prepped phones, the New York Post reported. In theory, the scheme deprived other drivers who played by the rules from accessing Uber’s platform, as these phone-wielding drivers dominated the surge fare opportunities.

Paldiel and Suarez pleaded not guilty and were released on $210,000 bonds. They each face up to 20 years in prison if convicted. It’s unclear whether the 800 drivers involved will face criminal charges. Uber reps condemned the actions of these drivers, stating that the scheme not only stole from passengers but also hurt honest drivers.

The Taxi & Limousine Commission is working with the FBI to identify drivers who participated in the fraud. The stated goal is to prevent them from ever driving for hire in New York City again. The group’s commissioner also mentioned the possibility of recovering the overcharges.