A man has been arrested in New York for allegedly participating in an international telecom scam that used more than 1,000 stolen identities to activate fraudulent mobile phone accounts. He then made telephone calls to fake overseas numbers that charged a premium connection fee.
More than half of the stolen identities belonged to members of the U.S. military. The scheme caused at least $8 million in losses to mobile telecommunications providers including AT&T and T-Mobile.
Dialing for Dollars
From 2001 through January 2013, police allege that the suspect participated in an identity theft scheme in which he and his co-conspirators obtained stolen identification information from individuals, including names, dates of birth, and Social Security numbers.
He would then allegedly activate fraudulent cellular service accounts in their names.
So how did this negatively affect AT&T and T-Mobile?
Turns out that the fraudsters would activate the accounts, create SIM cards, and insert them into mobile handsets. They then called premium international telephone numbers (similar to 1-900 numbers in the United States) that they acquired and controlled, presumably to generate fees for the members of the scheme. The premium numbers charged fees of as much as $1 per minute that the international carrier then charged back to AT&T and T-Mobile.
While the U.S. provider would normally bill subscribers for the calls, in this case the U.S. provider was forced to pay for the calls because the accounts were registered to identity theft victims.
Even worse, the police in New York say the international carrier provided a share of the fees to the fraudsters.
If convicted of the most serious charges, the suspect faces a maximum of 20 years in prison, according to Assistant U.S. Attorney Timothy Howard, who is in charge of the prosecution.
His office has said that identity theft is “an epidemic of global proportions and we are bound and determined to identify and prosecute those who engage in this illegal conduct.”