AT&T Loses $200 Million from Employees Adhering to Bribes

AT&T Credit: Mike Mozart / Flickr CC
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Fraudster and ringleader of a seven-year phone unlocking scheme paid AT&T employees $1 million in bribes, which allowed him to install malware on the company’s U.S. network and remotely unlock nearly 2 million phones.

Yesterday, the Department of Justice sentenced Muhammed Fahd, a 34-year-old from Pakistan, to 12 years in prison. Fahd is being accused of grooming AT&T employees at a call center located in the Seattle area to help with his malicious scheme.

In 2012, Fahd found his first AT&T employee through Facebook and paid him to recruit other employees. Fahd continuously bribed AT&T insiders to give him access to their credentials to disable AT&T’s proprietary locking software that kept phones from being removed from the carrier.

Fahd told the employees “to create shell companies and open business banking accounts in the names of the shell companies,” according to court documents.

AT&T developed a new unlocking system in 2013, making it much harder for Fahd to bribe employees to unlock International Mobile Equipment Identities. As a result, he hired a software developer to design malware that did not require authorization on AT&T’s end so he could unlock phones more efficiently and in larger numbers.

So far, only three of Fahd’s co-conspirators have pleaded guilty, admitting they were paid high six-figure numbers to assist in the fraudulent activities. The millions of phones Fahd successfully removed from the AT&T network resulted in $200 million lost in subscription fees.

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