Pak national sentenced to 12 yrs for running phone unlocking scheme to defraud AT&T

Sadly, he persuaded and pressured young people into engaging in criminal conduct, spreading the damage of his greedy scheme to others, Gorman said in a statement.According to court documents, beginning 2012, Fahd conspired with others to recruit ATT employees at a call center located in Bothell, Washington, to unlock large numbers of cellular phones for profit.Fahd recruited and bribed ATT employees to use their ATT credentials to unlock phones for ineligible customers, federal prosecutors alleged.Later in the conspiracy, Fahd had the bribed employees install custom malware and hacking tools that allowed him to unlock phones remotely from Pakistan.

A US court has sentenced a Pakistani national to 12 years in prison for his leadership role in running a seven-year scheme of unlawfully unlocking cellular phones to defraud AT&T, the largest telecommunications company in the world.

Muhammad Fahd, 35, committed a ''terrible cybercrime over an extended period'' even after he was aware that law enforcement was investigating, US District Judge Robert S Lasnik said at the sentencing hearing on Thursday.

Acting US Attorney Tessa Gorman said Fahd is a modern-day cybercriminal who combined his technological expertise with old-school techniques such as bribery, intimidation, and exploitation to run a criminal organization causing USD 200 million in losses.

"And the damage was not just financial. Sadly, he persuaded and pressured young people into engaging in criminal conduct, spreading the damage of his greedy scheme to others," Gorman said in a statement.

According to court documents, beginning 2012, Fahd conspired with others to recruit AT&T employees at a call center located in Bothell, Washington, to unlock large numbers of cellular phones for profit.

Fahd recruited and bribed AT&T employees to use their AT&T credentials to unlock phones for ineligible customers, federal prosecutors alleged.

Later in the conspiracy, Fahd had the bribed employees install custom malware and hacking tools that allowed him to unlock phones remotely from Pakistan. In September 2020, he pleaded guilty to conspiracy to commit wire fraud.

Cellular phones such as iPhones cost hundreds of dollars. To make the phones more affordable, during the relevant time, AT&T subsidised the purchase cost of phones or sold phones to customers under installment plans.

Unlocking a phone effectively removes it from AT&T's network, thereby allowing the account holder to avoid having to pay AT&T for service or to make any payments for purchase of the phone, the Department of Justice said.

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.

He offered the employee significant sums of money if the employee would help him secretly unlock phones at AT&T, the largest provider of mobile telephone services in the US.

Fahd also asked the employee to recruit other AT&T employees to help with the unauthorised unlocks. Fahd needed additional AT&T employees to join the scheme, because Fahd wanted someone to be always available to expand his ability to do unauthorised unlocks, it said.

Fahd also 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, the Department of Justice said.

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