8 indicted in $22m fraud against AT&T Wireless, T-Mobile

An indictment was unsealed in Brooklyn federal court this morning charging Courtney Beckford, Gabe Beizem, Rawl Davis, Lennox Lambert, Marsha Montayne, Saul Serrano, Ron Shealey, and Rohan Stewart, with conspiracy to commit mail fraud and wire fraud. Beizem, Montayne, and Stewart were also charged with wire fraud and aggravated identity theft.

The charges were announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, and Brian G. Parr, Special Agent-in-Charge, United States Secret Service, New York Field Office.

According to the indictment, between February 2005 and July 2009, the defendants fraudulently obtained over $22 million worth of wireless devices from AT&T and T-Mobile without payment. As part of the scheme, Beizem, an owner of Got Wireless, also known as USA Wireless, a former authorized AT&T and T-Mobile dealer that operated in Brooklyn, obtained dealer access codes for AT&T’s and T-Mobile’s online customer databases. Stewart, the owner of KP Wireless, an authorized T-Mobile wireless device dealer operating in West Palm Beach, Florida, also obtained dealer access codes for T-Mobile’s customer database. Using these access codes, Beizem, Stewart, and Montayne, and others, fraudulently obtained existing customer information from the customer databases, including customers’ names, addresses, and personal identifying information. Montayne, and others, then fraudulently assumed the identities of existing customers and obtained new wireless devices without payment and without the customers’ permission by (1) calling AT&T and T-Mobile, adding new lines of service to existing customers’ accounts, and requesting new wireless devices to support the new lines, (2) calling AT&T and T-Mobile, falsely claiming that a wireless device subscribed to an existing customer was damaged or defective and requesting replacement wireless devices, and (3) calling AT&T and Asurion, falsely claiming that existing customers’ wireless devices were lost or stolen and requesting new wireless devices pursuant to AT&T’s insurance program with Asurion.

As a result of these fraudulent requests, AT&T and T-Mobile shipped new or replacement wireless devices for express mail delivery by FedEx, DHL or UPS. As alleged in the indictment, FedEx and DHL shipments from AT&T were generally shipped to addresses along the routes of private express mail drivers whom Beckford, Davis, Lambert, and Stewart, and others, recruited and paid to divert the packages. FedEx and DHL drivers, including Serrano and Shealey, then scanned the packages into their respective carrier’s computerized tracking systems as “delivered” to the stated delivery addresses, but actually diverted the packages to Beckford, Davis, Lambert, and Stewart, and others. UPS shipments from T-Mobile were shipped directly to addresses connected to the defendants and their associates.

Beckford, Beizem, Davis, and Montayne, and others, allegedly then sold the fraudulently obtained wireless devices to others. When charges were incurred on these devices they were billed to existing AT&T and T-Mobile customers’ accounts. When the customers reported or confirmed the fraud on their accounts to AT&T and T-Mobile, the companies absorbed the losses, which included the cost of the devices, insurance payments, shipping costs, and wireless service and other calling charges.

“Identity theft can ruin customers’ credit and seriously disrupt their lives,” stated United States Attorney Campbell. “The type of fraud alleged in the indictment strikes at the very heart of our modern digital economy and imposes substantial costs on commercial businesses. It is a serious problem that requires serious action. Those who commit identity theft can expect to be investigated and prosecuted to the full extent of the law.” Mr. Campbell thanked the New York State Police for their assistance.

Secret Service Special Agent-in-Charge Parr stated, “The results of this investigation are an example of the strategic partnerships between the Secret Service, the New York State Police, and our private sector partners. We continue to prioritize investigative cases, focusing on electronic and financial crimes which have a significant impact on the community, and deploy cutting edge technology to pre-empt criminal ingenuity.”

If convicted of conspiracy to commit mail fraud and wire fraud, the defendants each face maximum sentences of 20 years of imprisonment. Defendants Beizem, Stewart, and Montayne also face additional mandatory two year consecutive sentences if convicted of aggravated identity theft.

The government’s case is being prosecuted by Assistant United States Attorneys Michael Stoer, Karin Orenstein, and Thomas Sullivan.

Source: U.S. Attorney’s Office, Eastern District New York

Update: On September 3, T-Mobile filed a breach report with the New Hampshire Attorney General’s Office. I think it may be this incident that they are basing it on, but am not sure.

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