A Texas federal grand jury recently returned an indictment charging 101 individuals in a transnational cellphone trafficking conspiracy responsible for stealing more than 70,000 devices worth nearly $100 million from wireless service providers and their customers. The indictment was part of a coordinated effort among many federal and local agencies over several years, which included the seizure of more than $6 million in assets. This is a significant victory in which dozens of runners and several aggregators in the Dallas area were charged. Consistent with most cellphone trafficking rings, according to the indictment, the stolen phones were ultimately sold in bulk to companies in the United Arab Emirates and Hong Kong.
Unfortunately, there is significant money to be made in the illegal trade of cellphones, at the expense of U.S. carriers, mobile virtual network operators (MVNOs), and other providers, as well as their customers and partners. Law enforcement rarely has the opportunity and resources to pursue traffickers, particularly when the phones are obtained through nonviolent methods.
Telecom providers, however, can maximize the results of their own efforts to stem the flow of illegally obtained phones by piggybacking on the recent indictment.
- While the federal government is prosecuting the indicted individuals, telecom providers can reap the benefits of the government’s investigation and asset seizure. For example, providers may seek restitution and file claims against the $6 million that was purportedly seized. Given how lucrative cellphone trafficking is, additional assets may be located.
- Providers should also consider offering to testify at trial and sentencing, and submit victim impact statements. This can mean the difference between a judge ordering probation or jail time.
- In addition to participating as a victim in the criminal case, telecom providers can take advantage of the information obtained by the government and file civil lawsuits against the named unindicted aggregators, and capitalize on the moment to take action against traffickers nationwide.
- Quick self-help action by telecom providers, immediately after an indictment, is extremely valuable. Shutting down aggregators is crucial to making lasting reductions in handset losses and reducing armed robberies at retail stores.