Man Who Unlocked Nearly 2 Million AT&T Phones Gets 12 Years In Prison (theverge.com) 102
A man who the Department of Justice says unlocked AT&T customers' phones for a fee was sentenced to 12 years in prison, in what the judge called "a terrible cybercrime over an extended period," which allegedly continued even after authorities were on to the scheme. The Verge reports: According to a news release from the DOJ, in 2012, Muhammad Fahd, a citizen of Pakistan and Grenada, contacted an AT&T employee via Facebook and offered the employee "significant sums of money" to help him secretly unlock AT&T phones, freeing the customers from any installment agreement payments and from AT&T's service. Fahd used the alias Frank Zhang, according to the DOJ, and persuaded the AT&T employee to recruit other employees at its call center in Bothell, Washington, to help with the elaborate scheme. Fahd instructed the AT&T employees to set up fake businesses and phony bank accounts to receive payments, and to create fictitious invoices for deposits into the fake accounts to create the appearance that money exchanged as part of the scheme was payment for legitimate services.
In 2013, however, AT&T put into place a new unlocking system which made it harder for Fahd's crew to unlock phones' unique IMEI numbers, so according to the DOJ he hired a developer to design malware that could be installed on AT&T's computer system. This allegedly allowed him to unlock more phones, and do so more efficiently. The AT&T employees working with Fahd helped him access information about its systems and other employees' credentials, allowing his developer to tailor the malware more precisely, the DOJ said. A forensic analysis by AT&T showed Fahd and his helpers fraudulently unlocked more than 1.9 million phones, costing the company more than $200 million. Fahd was arrested in Hong Kong in 2018 and extradited to the US in 2019. He pleaded guilty in September 2020 to conspiracy to commit wire fraud.
In 2013, however, AT&T put into place a new unlocking system which made it harder for Fahd's crew to unlock phones' unique IMEI numbers, so according to the DOJ he hired a developer to design malware that could be installed on AT&T's computer system. This allegedly allowed him to unlock more phones, and do so more efficiently. The AT&T employees working with Fahd helped him access information about its systems and other employees' credentials, allowing his developer to tailor the malware more precisely, the DOJ said. A forensic analysis by AT&T showed Fahd and his helpers fraudulently unlocked more than 1.9 million phones, costing the company more than $200 million. Fahd was arrested in Hong Kong in 2018 and extradited to the US in 2019. He pleaded guilty in September 2020 to conspiracy to commit wire fraud.
Welcome to American cuntaroo court "justice"... (Score:5, Insightful)
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It's not scamming IMO when all the terms are spelled out and the consumer is free to accept or decline the offer.
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In many states that would be 25-to-life.
You probably live in the south.
Prison? (Score:4, Insightful)
Prison? This guy sounds like a hero! It should be legally mandated that phones are *NOT* locked to particular carriers, or have locked bootloaders.
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It should be legally mandated that phones are *NOT* locked
Anyone who wants an unlocked phone and is willing to pay for it can already buy one.
The key part is "willing to pay for it".
Re: Prison? (Score:3)
There's already a contract requiring the phone owner to pay for the phone, having a carrier lock is to lock the owner to the carrier. In Canada you only need to ask the carrier to unlock it.
Re: Prison? (Score:2)
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Actually any new phone is sold unlocked. But carriers are required to unlock older phones sold before the regulation was put in place.
That sounds like a very effective way to prevent future phone unlocking "crimes." Our legal systems have more important things to deal with. In the EU, it's also illegal to impose penalties for cancelling phone contracts.
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All phones sold in Canada since December 2017 are already unlocked. Older devices can be unlocked by the wireless carrier at no cost to the customer.
https://www.whistleout.ca/Cell... [whistleout.ca]
I thought there was momentum towards similar legislation in the US? One can dream I suppose.
Last I checked they are (Score:3)
12 years is still way, _way_ too much.
Re:Last I checked they are (Score:5, Insightful)
12 years is still way, _way_ too much.
If all he was doing was unlocking cell phones, I'd agree with you. However:
In 2013, however, AT&T put into place a new unlocking system which made it harder for Fahd's crew to unlock phones' unique IMEI numbers, so according to the DOJ he hired a developer to design malware that could be installed on AT&T's computer system.
He also bribed AT&T employees to give him access to their computer systems and stole other employee credentials. This goes *way* beyond bypassing some security feature on a phone.
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I agree, but 12 years is excessive. Jordan Belfort was locked up for less than 2.
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Jordan Belfort was locked up for less than 2.
Belfort was sentenced to 4 years which got reduced to under 2 years because he ended up cooperating with authorities to help bust his partners and others involved. Belfort also paid back millions to his victims as part of the deal.
We don't know how long Fahd will serve. If there were other players or bigger fish Fahd could help authorities go after, he could have worked out a cooperation deal for a reduced sentence, but he's the sole mastermind behind this scheme. And I don't see is mentioned anywhere how
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I left out the part where Belfort didn't install malware on any company's computer system that allowed him access to internal company information
In 2013, however, AT&T put into place a new unlocking system which made it harder for Fahd's crew to unlock phones' unique IMEI numbers, so according to the DOJ he hired a developer to design malware that could be installed on AT&T's computer system. This allegedly allowed him to unlock more phones, and do so more efficiently. The AT&T employees working with Fahd helped him access information about its systems and other employees' credentials, allowing his developer to tailor the malware more precisely, the DOJ said.
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So he stole money from a band of thieves?
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IMHO, cell carriers and/or Google/Apple (whoever is the at-fault party) should have to pay an e-waste tax for each intentionally bricked phone.
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If you stop paying before the contract term ends you are in breach of contract and there are already laws to deal with that.
If someone is unable to pay the service contract due to financial hardship, turning the handset into a paperweight doesn't make them any more able to pay - it makes them less able.
It also generates more unnecessary e-waste.
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With the phone locked AT&T can disable service
That can happen with any phone.
Can't afford a $850 phone. $109 phone (Score:3)
They can't afford a phone that costs $850.
So they pay $60/month for 24 months.
You can Google Pixel 2, 8-core, 64GB unlocked for $135. You can get a decent phone for $109.
Personally, I COULD go buy a $1,000 phone, for cash, whenever I wanted to. One reason that I have that money in the bank is because what I do buy is a $180 phone, or thereabouts. You can easily find a good phone under $200. In fact, the difference is specs between a $180 phone and an $800 phone isn't that much.
It's kinda like how the founde
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Funny thing is, $800 is about what my new iPhone is going to cost. I’ve typically kept my phones about 3 years, so your $180 phone would represent about $206.66 in annual savings.
In only 1,419.4 years, I’d have enough saved up to buy the average median US home.
You’re not really going to fundamentally change your standard of living by cheaping out on phones. It may make you personally feel better to be frugal, but that’s about it.
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For the people that can't afford $60/month, $206/year is a material difference.
Cheapest AT&T deal I can find on their site that includes a new iPhone is $72/month. A fucking month.
Or, You could wait three months, buy a $180 phone and still have enough money to pay the next three months of your $10/month phone service from someone that isn't gouging you.
At which point you also own your phone and don't have to pay AT&T another $1500.
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$10/month phone service from someone that isn't gouging you.
Well, you can technically get a $15/mo plan on Boost, but I'm pretty sure that's on Sprint's old network that T-Mobile is in the process of demolishing. Realistically, prepaid plans that actually include a decent amount of data and piggyback on a major cell network start at around $30-$40/mo. It's not like the old days though, you will be subject to deprioritization during periods of congestion (which, if you live in a metro area, is pretty much always).
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Boost isn't on that network anymore.
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Funny thing is, $800 is about what my new iPhone is going to cost. I’ve typically kept my phones about 3 years, so your $180 phone would represent about $206.66 in annual savings.
In only 1,419.4 years, I’d have enough saved up to buy the average median US home.
You’re not really going to fundamentally change your standard of living by cheaping out on phones. It may make you personally feel better to be frugal, but that’s about it.
Talk about your "Let them eat cake" answer. Cheaping out on phones might be the difference in getting to keep your phone or having it turned off and being referred to a collection agency. A month ago, people like you were telling us the poor couldn't afford to get picture IDs. Now they have an extra $200 per year laying around just to make Apple a little richer?
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Cheaping out on phones might be the difference in getting to keep your phone or having it turned off and being referred to a collection agency.
You're missing the point. If $0.57 per day is the straw that breaks the camel's back in your budget, you're going to get turned over to collections anyway for something else. It's easy to imagine poor people have poor people problems because they bought an "expensive" smartphone, but it's housing costs, food costs, car payment, utilities, and healthcare costs that are the real burdens.
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I used to pay a neighbor to watch my kids for a couple hours between school dismissal and me
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Delaying gratification is a primary contributor to the cycle of poverty.
I'm assuming you meant to write "Not delaying gratification", and while it has been demonstrated that young people who can delay gratification are more likely to be successful later in life, delaying gratification of in itself does not necessarily create a path to success. It's merely a personality trait indicator that you might have the aptitude to tolerate the strife necessary to do the boot-strappy* thing.
It's not just the $0.57 a day for that (and that's an underestimate anyway)
I know they've been pushing some kind of crazy common core math for awhile lately, but that really
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Correct.
All terms you pulled out of your ass.
Someone else posted that the cheapest AT&T plan with a "free" iPhone was $70 per month. I pay on average $23 for a difference of $47. Knowing from a past contract how AT&T throws in $10 - $20 in additional
That's what I used to think (Score:2)
> Youâ(TM)re not really going to fundamentally change your standard of living by cheaping out on phones.
That's how I used to think. $5 at Starbucks aint going to make any difference either - I only get a coffee once or twice a week.
A few years ago, I was convinced to try a different way of thinking. Hills Brothers coffee mix (35 cents per cup) instead of Starbucks once or twice a week, just little things like that which "don't amount to hill of beans". It's not like I was spending any significant
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Funny enough, my net worth has improved by over half a million in the last ten years.
You have to earn it first before you can save it, though. Most banking sites/apps have a feature to show a breakdown of annual spending. If you look at it and see you're spent the cost of a Tesla in dining out, yeah, you could've had a Tesla had you eaten Ramen noodles at home instead.
But if your frivolous spending amounts to a new high-end smartphone every 3 years, and maybe Starbucks once a month, well - giving those things up isn't going to produce a rags-to-riches transformation. The math just doesn'
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> The math just doesn't work out.
Exactly. And that's a big thing to me, because I'm a math guy.
I've been a programmer my whole life pretty much; I totally relate to Mr. Spock and Commander Data.
I was not at all comfortable with the idea that if you're amking over $50K and you're broke, *it's not a math issue*. OF COURSE it's math - it's dollars and cents. But, whether I like it or not, it's a habits thing, not a math thing. The proof is in the pudding, and I've got a lot more pudding now that I've a
Re: Can't afford a $850 phone. $109 phone (Score:2)
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In many countries phones are already provided unlocked, the carriers there still provide rental options. Most countries have laws that govern contracts, so if you breach the terms of the contract the party with whom you have the contract will pursue you legally.
Locking the handset only harms the users, which is why in some countries it is illegal to lock handsets.
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rison? This guy sounds like a hero! It should be legally mandated that phones are *NOT* locked to particular carriers, or have locked bootloaders.
Nice try, Osama, I mean, Mr. Bin Laden, but that's not how we do things here in Benevolent Justice Freedomland!
What I want to know is, why do you hate our corporation's freedoms? Does their freedom to control the private property of their customers, even when the property is fully paid for, displease you people? You jealous because you can only buy your goats, no
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Customers don't just break the contract terms because they want to take the phone. Why would they do that? It will result in them being chased for the unpaid debt and having a poor credit rating as a result. Plus you would only be able to do it once before you got blacklisted.
If you wanted to try doing it repeatedly using false identities that would be a crime known as fraud, for which there are also laws. If someone is going to commit a crime to obtain handsets for resale, then why wouldn't they simply ste
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inane and customer hostile business model
The alternative would be to provide pay as you go cellular service. And then expect customers to cough up many hundreds (if not a thousand dollars or more) to purchase some inane iDevice. Few people would do it. And worse yet, when the service providers wanted to upgrade their systems from 2/3G to 4/5G, quite a few customers would balk at throwing out perfectly good older generation phones.
It's not customer hostile on its own. That would be the cellular companies' need to expand into new markets and provid
Re:Well this is what I want to spend my taxes on (Score:5, Insightful)
The alternative would be to provide pay as you go cellular service. And then expect customers to cough up many hundreds (if not a thousand dollars or more) to purchase some inane iDevice. Few people would do it.
You can literally buy an Android phone and get a month's prepaid service for less than $100 at WalMart. Are you advocating for indentured customers that can't afford an "iDevice" to buy one on time just so they can show off their new shiny?
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Meanwhile "Harvard Swimmers" get sentenced to six months. Trump University results in a slap on the wrist. Cops who flat out murder motorists get... zilch. Maybe it's time we had a reboot of the entire justice system.
Your problem, is assuming we still have a justice system.
We don't.
We have a legal system created by those profiting from it, and you're only starting to see the corrupt difference between the two. And it will get far worse, because Greed.
Bend over, consumer (Score:4, Insightful)
So each unlocked phone cost AT&T approximately $100 in profits. You really have to question the financial structures that let large companies bilk consumers for money just by flipping a software switch in a hardware device.
Re:Bend over, consumer (Score:4, Funny)
Houses cost $500k. And they can be given to the resident just by flipping a blob of ink over the mortgage lien on their title document.
You really have to question this financial structure!
Re:Bend over, consumer (Score:5, Insightful)
It's not just that. He actually got employees to put malware on AT&T's systems so he can continue to make money.
That's the reason why. It's less about the $100 - he probably charged people $50+ for the privilege.
It's less about unlocking phones, and more about he had written malware and bribed employees to install it on the AT&T computer network so he could continue with his business.
Most of that $200M is probably not from unlocking phone fees but costs incurred by AT&T to clean out their computer system to make sure the malware was removed completely. It's likely AT&T's losses in that department are probably very small. Think of it this way - if he unlocked 10,000 phones this way, the loss to AT&T would be $1M.
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Look at it another way. A phone is capital expenditure for the company, offset against an expected revenue stream.
That revenue stream comes with a few risks, one of which is the customer choosing not to pay.
Locking the phone discourages that choice, mitigating that risk, and thus lowering the cost of that risk. The result is a cheaper price for the customer, because less of their money is being used to cover the risk of non-payment by other customers.
Another risk is that the phone will be stolen. If it's lo
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It's really the phone carrier's choice to not collect that revenue stream all at once, before purchase, similar to how most other products in the known world are purchased.
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It's their choice to advance credit as part of a product offer, yes.
That doesn't make it an invalid choice. That doesn't mean they shouldn't mitigate the financial risks associated with that business model. That doesn't mean it isn't capital expenditure or that its an investment by the company to create an asset that will bring future cash flow.
What's the point you were trying to make?
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The point is that the carriers are "advancing credit" to the consumer, but calling it something else, trying to hide what it is. You can't be disappointed when people game the system in that circumstance.
I'm very confused.... (Score:2)
This makes no sense.
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Perhaps they just stop paying AT&T and ignore the debt collectors?
Re:I'm very confused.... (Score:4, Informative)
Perhaps they just stop paying AT&T and ignore the debt collectors?
Indeed. Many people have such terrible credit that they just don't care anymore.
I have a niece like that. Her FICO score is around 400. She gets tons of free stuff by buying on the installment plan and then just not paying.
She lived with me for a year (because no one would rent to her), and she got so much mail from debt collectors that we were able to put it in the fireplace and heat the house for a week.
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And she suffers the consequence that noone will rent to her.
Those companies that allow her to have an instalment plan despite her poor credit rating are shooting themselves in the foot here. The whole point of credit ratings is to determine if someone should be given credit or not. Your niece should not be given credit as she has demonstrated she cannot be trusted with it.
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I doubt it's the unlocking that got him busted... it's probably more the fraudulent businesses and invoices and malware installed on AT&T systems.
Plenty of people have found ways to unlock phones without getting busted for it, because it's not illegal in and of itself (at least, not in the US, despite carriers wanting it to be). Paying employees of a company for confidential information, having someone create malware, and getting it installed on the systems of a major telco, however, is very illegal.
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> How does unlocking their phone free them from installment payments?
Some stupid phone companies had free phones when you agreed to pay for a $129/mo phone plan.
It duped stupid consumers too but apparently some people took advantage of it and then bypassed the port lock.
It's the typical case of everybody trying to get something for nothing.
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The actual crime charged was wire fraud.
Part of the crime was advising people how to create fake names and companies to get the subsidized phones. If AT&T tried to go after the name on the contract they wouldn't find an actual person.
Cost AT&T $200 million? (Score:1)
Lots about this case that I don't understand. How did he cost AT&T $200 million? Presumably the owners of the phones wanted them unlocked, so using "malware" was done at their behest. I don't see how this is a crime, frankly. The deal with the guy with inside secret information, that I can understand being a problem. But not the rest. Strange story. I'd love to know the rest of the details because what was in the article certainly didn't make sense to me. Must be missing something.
ATT full retail cost per phone + 2 year sub cost? (Score:2)
ATT full retail cost per phone + 2 year sub cost?
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Again, how did cause AT&T to incur that cost? The subscribers would still be paying AT&T until their contract runs out. If that's really the logic, the number is bogus and dishonest on AT&T's part.
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Cop math. Guy is arrested with half an ounce of weed. Street value of a million dollars.
Someone should unlock his cell (Score:2, Funny)
The only way he could be more of a hero is if he had done it for free.
Re: Someone should unlock his cell (Score:2)
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He stole from the rich and powerful. An example had to be made.
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Public pirates from the poor artists, making examples of them.
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in an camp they don't have cells or even an fence
Throw Away The Key! (Score:2)
My God, this criminal may be the most heinous person alive.
Could you imagine, I mean, IMAGINE what would happen if you gave people the keys to their house; the keys to their car; the root password to their computers, etc ... before they had fully paid these things off?
Imagine it!
I mean, what if these people had bought their phones with a credit card, and the credit card company let them do what they pleased with the phones, buy, sell them, whatever, without the devices being locked down by the credit card c
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contacted an AT&T employee via Facebook and offered the employee “significant sums of money” to help him ... ... ...
instructed the AT&T employees to set up fake businesses and phony bank accounts to receive payments, and to create fictitious invoices for deposits into the fake accounts to create the appearance that money exchanged
he hired a developer to design malware that could be installed on AT&T’s computer system
It’s not clear from the DOJ release whether anyone besides AT&T was harmed as a result of the scheme
In the old days hacking AT&T would get you a life sentence.
Uf.. usa land of the free from everything. (Score:2)
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So?
In countries where phones are provided unlocked, carriers still offer rental terms for handsets.
It's possible to take a cash loan, use it to buy an unlocked phone (or anything else for that matter) and then not repay the loan.
Most goods purchased on credit are not locked to anything, it's possible to do exactly the same with these.
It's possible for someone to stop paying for a contract even if the phone is locked, it just generates e-waste which doesn't benefit anyone.
There are many legitimate cases wher
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It's not my job to prop up your crappy business idea.
And neither is it that of the justice system.
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freed from payments? how/why? (Score:2)
"freeing the customers from any installment agreement payments" - but they still have the phone, the lock is just an awful stick forcing people to stay with the network - but unlocking the phone doesn't free them from their obligations under whatever contract they made with AT&T.
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And the cheaper carrier won't provide them service or insists on payment up front because they now have a poor credit rating.
Those same people could take out a cash loan, use it to buy an unlocked handset, and then refuse to repay the loan. Locking the handset makes no difference to someone who intentionally wants to break the contract.
On the other hand, those who intend to fulfil the contract terms are harmed - someone who wants to use a tourist sim while they travel, someone who wants to sell or gift the
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Then I guess you should have chosen a business model that doesn't rely on adhesive contracts to be profitable.
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They bought the phones with fake names, so there's no actual person for AT&T to go after to fulfill the contract.
Just wow how injust (Score:2)
Meanwhile AT&T does not unlock phones ever (Score:2)
Where's the crime? (Score:2)
Seriously, what did he do?
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From the actual DOJ press release https://www.justice.gov/opa/pr... [justice.gov]
"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."
"Fahd hired a software developer to design malware that could be installed without authorization on AT&T’s computer system to unloc
Deep pockets (Score:2)
unique IMEI numbers? (Score:2)
Unlocking wasn't the crime charged (Score:2)
"He pleaded guilty to conspiracy to commit wire fraud in September 2020."
He was engaged in fraud, money laundering, unauthorized computer access, and conspiracy to do all of the se above. He was charged with wire fraud.
Unlocking phones was just something done in the process of the criming, not the crime in itself. Imagine if the headline was "Man who walked down the street gets 12 years in prison".
What is the problem? (Score:2)
The PIGs unlock phones every chance they get. I do not hear tales of the PIGs being thrown in prison (preferably with a morning and afternoon ration of lashes with the Cat-o-Nine).
It is completely amazing that there are two sets of laws -- one for the peasant class, and another for the PIG class.
Heavy Handed Justice Indeed (Score:1)
This man broke the law and deserves some consequences but the sentence he was given seems very harsh. Crimes like rape and murder can see smaller sentences that this. I guess the reason for this is that the laws against computer crime have greater penalties than many other crimes. Seems like those laws should be reformed so the consequences are more in line with the nature of the crimes!