Tuesday, October 26, 2021

Man sentenced to 12 years for $ 200 million phone fraud

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SEATTLE (AP) – A Pakistani resident has been sentenced to 12 years in prison for conspiring to “unlock” phones on AT & T’s network, a scheme that the company says cost him more than $ 200 million.

Muhammad Fahd, 35, of Karachi, recruited an AT&T call center employee in Bothell, Washington, via Facebook in 2012, and began bribing that employee and his co-workers to use his credentials. to unlock phones.

That allowed the phones to be pulled from AT & T’s network, even if customers had not finished paying for expensive devices or their service contracts had not expired. Customers could then buy a cheaper service for their phones.

Fahd later had workers install malware on the company’s network, allowing him to unlock Pakistani phones. It persisted even after the company spotted the initial scheme and fired two of the workers involved, prosecutors said.

Fahd sold the illegal phone unlocking service through online retailers, raising millions. His extravagant lifestyle included frequent trips abroad, $ 1,000-a-night hotel stays in Dubai, and a $ 30,000 watch. He boasted that he hired British singer-songwriter Jay Sean to perform his wedding for $ 100,000, according to the United States Attorney’s Office in Seattle.

He paid three AT&T workers $ 922,000 from 2012 to 2017 before being arrested in Hong Kong in early 2018. More than 1.9 million phones were unlocked as part of the conspiracy, AT & T’s forensic analysis found.

The company based its $ 200 million loss amount on only phones that were removed from its network before customers paid for them in full, not including the amount it lost in service contracts. Prosecutors said such losses would have been passed on to consumers, in terms of higher overall prices, and to shareholders.

Fahd was extradited to the US In 2019, he pleaded guilty to wire fraud conspiracy a year ago and was sentenced Thursday.

“This defendant is a modern-day cybercriminal who combined his technological expertise with old-school techniques such as bribery, intimidation and exploitation,” Acting US Attorney Tessa M. Gorman said in a news release.

Fahd apologized in a letter to US District Judge Robert Lasnik, but did not go so far as to help the US government recover ill-gotten assets, prosecutors said. They said that based on the limited records they were able to locate, Fahd made at least $ 5.3 million.

“Over time, I became obsessed with money and any thoughts that I was doing wrong disappeared,” Fahd wrote. “I didn’t know it, but it was on its way to self-destruction. Worse still, my misbehavior destroyed the lives of those around me. “

Lasnik ordered him to pay more than $ 200 million in restitution.

Two AT&T workers who played minor roles in the conspiracy were sentenced to probation. Last week Lasnik sentenced a third party, Marc Sapatin, who was Fahd’s main contact at the company, to 18 months.

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