A former employee of AT&T was sentenced to 12 years in prison for a phone-unlocking scheme that cost the company roughly $200 million. The defendant is Muhammed Fahd, a Pakistani and Grenadian national, who was found guilty of unlocking phones for profit. The presiding judge, U.S. District Judge Robert S. Lasnik for Washington state, commented that the defendant had engaged in a “terrible cybercrime over an extended period.”
According to the U.S. Department of Justice, Fahd concocted the scheme while he was working for a call center in Bothell, Wash. Along with co-conspirators, the guilty parties (using aliases) sought to unlock numerous AT&T phones with their credentials. By unlocking the phones, they were removed from the AT&T network, and users were able to skirt by the normally applicable fees. Clients would pay Fahd or his partners for the scheme.
The DOJ describes the scheme in more detail as follows:
According to records filed in the case, in approximately June or July of 2012, using the alias “Frank Zhang,” Fahd contacted an AT&T employee through Facebook. Fahd offered the employee significant sums of money if the employee would help Fahd secretly unlock phones at AT&T. Fahd also asked the employee to recruit other AT&T employees to help with the unauthorized unlocks.
Fahd instructed the recruited employees to set up fake businesses and bank accounts for those businesses, to receive payments and to create fictitious invoices for every deposit made into the fake businesses’ bank accounts to create the appearance that the money was payment for genuine services.
In total of 1,900,033 phones were unlocked over the years that this scheme was active. Muhammed Fahd was indicted following an extensive investigation in 2017 and arrested in Hong Kong. Following extradition, the first court proceedings took place in August 2019. Fahd pleaded guilty to conspiracy to commit wire fraud in September 2020.
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