AT&T iPhone Unlocking Scheme Cost Co $201M, Man Sentenced to 12 Years In Prison

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AT&T iPhone Unlocking Case Overview: 

• Who: Muhammad Fahd was sentenced to 12 years in prison. 
• Why: Fahd pled guilty to conspiracy to commit wire fraud after being accused of leading an AT&T iPhone unlocking scheme which cost the company more than $201 million.
• Where: The case was heard in Washington federal court.

A Pakistani man was sentenced to 12 years in prison on Thursday for leading an AT&T iPhone unlocking scheme that reportedly cost the company more than $201 million. 

Prosecutors claim that, starting in 2012, 35-year-old Muhammad Mahd bribed employees at an AT&T call center in Bethel, Wash. in order to remotely unlock iPhones originally sold and subsidized for consumers by AT&T. 

AT&T estimates more than 1.9 million iPhones were unlocked during the scheme, reports Law360. The iPhones had been sold to consumers at a subsidized price with the stipulation that the phone would be locked if the customer left the network before it was paid off.

Fahd, along with unnamed accomplices, allegedly ran a website advertising phone unlocking services, reports Law360. 

AT&T implemented an attempted fix to the phone unlocking issue in 2013, at which time the company introduced new software that made it more difficult to do.

Man Bribes Employees in AT&T iPhone Unlocking Scheme

To counter the new software, Fahd allegedly paid three AT&T employees a total of $921,700 in bribes over the span of seven years to install malware into AT&T computers that allowed him to unlock the phones remotely from Pakistan. 

Fahd was indicted in 2017 and arrested in Hong Kong the next year, reports Law360. He was extradited to the US and eventually pled guilty to conspiracy to commit wire fraud in a Washington federal court in September 2020.

Prosecutors recommended 15 years in prison at the time, five years less than the maximum sentence of 20 years in prison, reports Law360. Fahd has been ordered to forfeit $5.3 million as part of his sentencing agreement.  

iPhones were at the center of a class action lawsuit filed against Apple earlier this year by a consumer who alleged the company uses software updates to intentionally damage its iPhone models as a way to encourage consumers to keep buying newer versions.  

Do you believe AT&T could do more to protect its iPhones from being remotely unlocked? Let us know in the comments! 

Fahd is represented by Peter A. Camiel of Camiel and Chaney PS and Stephan R. Illa. 

The AT&T iPhone Unlocking Case is USA v. Fahd, et al., Case No. 2:17-cr-00290, in the U.S. District Court for the Western District of Washington.

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