Prison inmates used contraband cellphones in 'sextortion' ring targeting military service members, officials say

Fifteen people have been charged in a "sextortion" ring run by prisoners using contraband cellphones and targeting U.S. military service members, officials announced Wednesday.

The suspects involved are prisoners being housed in the North and South Carolina Department of Corrections, as well their associates on the outside, U.S. Attorney for South Carolina Sherri Lydon told reporters at a press conference.

The male inmates charged in the scheme allegedly posed as women who were seeking relationships with the military servicemen, Lydon said. After they would make contact with a member of the military, the suspects would then send them nude images of a young woman and ask for nude photos in return, Lydon said.

After an exchange of photos, the suspects would then call the servicemen, claiming to be a police officer or the father of the young woman seen in the photos, and would threaten to notify authorities "unless the serviceman paid him some money," Lydon said.

Naval Criminal Investigative Service special agent-in-charge Drew Goodridge characterized the scam as a "sextortion" ring.

"The prisoners used fictitious online personas, preyed on service members to engage them in online romantic relationships and then extort those service members for money," Goodridge said.

He added that the servicemen would then pay the extortion money because they were "fearful that they might lose their careers over possessing what they were led to believe was child pornography."

More than 440 military service members, from different military branches stationed around the country, have paid more than $560,000 in extortion money to the suspects, Goodridge said, adding that its likely that more victims exist.

The service members involved were mostly men, Goodridge said. When asked if the service members will face disciplinary consequences from the U.S. military, Goodridge replied that they "committed no crimes themselves."

Authorities simultaneously executed five arrest warrants, served five summonses and interviewed five inmates throughout South and North Carolina, Goodridge said. Among their charges are money laundering, extortion and wire fraud. More than 250 people are also being investigated and could face future prosecution, Goodridge added.

The suspects were arrested without incident, said U.S. Marshall for the District of South Carolina Tom Griffin. They will soon appear before a federal judge, Griffin added.

Matthew Line, special agent-in-charge of the Internal Revenue Service's Charlotte office, emphasized the fact that the prisoners charged "did not act alone" and that they recruited family and friends to sneak them cellphones as well as create a financial network in order to spend the money.

Associates opened bank accounts and utilized money transfer services and prepaid debit and credit cards to spend the "illegally gotten gains," Line said.

The NCIS began its investigation into a case it dubbed "Operation Surprise Party" in January 2017, but had been monitoring "this particular sextortion cyber crime" for several years, Goodridge said.

"It's been a pervasive problem," he added.

Lydon said authorities announced the indictment to "sound the alarm that these kinds of scams are a significant threat."

South Carolina Department of Corrections Director Bryan Stirling is hoping to install access management systems at all facilities. The technology would only allow calls from approved numbers to go through, rather than jamming the signal, which would block everything, Stirling said, adding "jamming" is common at federal facilities.

Among the problems a manage access system presents is the cost of employing someone to oversee the system as well as having to work with engineers when cell phone companies change their frequencies, causing the system to not function properly, Stirling said. It is already been tested in at least one prison, Stirling said.

Stirling emphasized that prisoners are able to continue their crimes when they are in the possession of contraband cellphones.

"They're physically incarcerated, but as you see today, virtually, they're out there among us," he said. "They're able to continue their schemes from behind bars and continue their criminal ways.

Lydon vowed to hold the suspects accountable.

"We do not lock up criminals only to have them go to prison and continue their criminal conduct," she said. "It is the unfettered use of contraband cellphones that allows inmates to continue harming the citizens of South Carolina."

ABC News' Rachel Katz contributed to this report.