Man responsible for unlocking AT&T phones put in prison for 12 years

The DOJ says AT&T phone unlocking malware costs 200 million for the carrier

The campaign running from 2012 at least, involved bribed employees and a man who now faces 12 years in prison

The scheme lasted for seven years and affected 2 million phones. The responsible man faces charges and should end up in prison for 12 years.^[1] AT&T phone unlocking malware costs hundreds of millions for carriers. In 2012, Muhammad Fahd, a citizen of Pakistan and Grenada, contacted an AT&T employee via Facebook and offered the employee a significant amount of money in exchange for helping him secretly unlock AT&T phones.

Fahd didn't go by his real name; instead, he used the alias Frank Zhang, and persuaded the AT&T employee to recruit more employees at its call center in Bothell, Washington. Criminal instructed the AT&T employees to set up fake businesses and bank accounts to receive payments and to create fake invoices for deposits into the fraudulent accounts to create the appearance that money exchanged as part of the scheme was payment for legitimate services.

During all these seven years, with the help of insiders, a fraudster was able to install malware and remotely divorce iPhones and other handsets from the carrier’s U.S. network. Now, the head of the mastermind criminal scheme is going to jail for 12 years, after effectively compromising AT&T’s internal networks to install credential-thieving malware. Fahd was convicted of grooming AT&T employees. During all this time, he defrauded AT&T out of more than $200 million in lost subscription fees.

The elaborate scheme faced troubles early on

The campaign went on for years, however, not without any problems. In 2013 AT&T implemented a new system to help prevent phone unlocking. That caused a significant headache for Fahd, but he eventually came up with a solution: he decided to hire a software developer to create malware capable of remotely manipulating AT&T computers into unlocking the phones for him. Then, bribed AT&T employees helped to plant the malicious code into company systems.^[2]

However, the very same year AT&T discovered Fahd’s malware on its network. This discovery led to three AT&T employees being fired. After that, federal investigators identified the perpetrator who continued his phone-unlocking scheme until 2017. Soon after, Fahd was arrested in Hong Kong and extradited to the US in 2019. There, he pleaded guilty to conspiracy to commit wire fraud.

AT&T has faced hardships before. In 2018, cryptocurrency investor and Dogecoin founder Michael Terpin filed a $223.8 million lawsuit against the company. He alleged that the mobile phone company didn't report a SIM fraud. It was stated that more than 3 million cryptocurrency tokens worth $24 million were lifted from the digital wallet at an AT&T store. The mobile phone was hijacked, and tokens were transferred to an international criminal gang.^[3]

Mobile malware becomes more and more common

The recent situation shows just how much damage malware on mobile phones could do. This ties up to mobile ransomware, which is s a form of malware that affects mobile devices. A cybercriminal can use mobile malware to steal sensitive data from a smartphone or lock a device before demanding payment to return the data to the user or unlock the device. Sometimes, users are tricked into downloading mobile ransomware, but the damage remains the same.^[4]

Researchers state that 87 percent of all Android smartphones are exposed to at least one critical vulnerability. 95 percent of Android devices could be hacked with a simple text message. Apple isn't immune either, many apps are pulled due to infections and malware.^[5] To stay safe, users have to use protected Wi-Fi, be careful using email services, and install antivirus protection even on their mobile devices. It is especially important nowadays when you can do all tasks from the palm of your hand using the smartphone.