A 34-year-old citizen of Pakistan is charged with paying more than $1 million in bribes to employees at AT&T’s Seattle-area offices and call centers to install malware on the company’s network to unlock millions of smartphones.
According to an indictment unsealed today by the U.S. Department of Justice, Muhammad Fahd and a partner who is now believed to be deceased unlocked more than 2 million smartphones from 2012 to 2017 that could be taken off the network and brought to other carriers. AT&T lost more than $5 million per year as a result of the alleged scheme, per the indictment.
Fahd allegedly recruited AT&T “insiders” to install malware programs that gathered confidential information and submitted unlock requests using employee credentials via a remote server. He encouraged insiders to recruit other potential co-conspirators and allegedly paid one employee $428,500 over five years.
AT&T investigators appeared to catch on to the scheme at one point as several workers left the company when confronted about their involvement in 2014. The defendants then allegedly recruited new employees to execute their plan.
The objective of the alleged scheme, per the indictment, was to “sell to members of the public the resulting ability fraudulently to unlock phones, so that the members of the public could stop using AT&T wireless services and thereby deprive AT&T of the stream of payments it was owned under the customers’ service contracts and installment plans.”
The indictment doesn’t get into how Fahd was caught. He was arrested in Hong Kong in February 2018 at the request of U.S. authorities. Fahd was extradited from Hong Kong to the U.S. last week to face 14 different charges in federal court in Seattle, including wire fraud, violating the Travel Act and intentional damage to a protected computer.
“This defendant thought he could safely run his bribery and hacking scheme from overseas, making millions of dollars while he induced young workers to choose greed over ethical conduct,” said U.S. Attorney Brian T. Moran of the Western District of Washington. “Now he will be held accountable for the fraud and the lives he has derailed.”