Suspicious cell phone purchases investigated

Fox 59 News ^ | 8/16/06 | Kimberly King

[Samwise]

Hartford City, IN — The Indiana Homeland Security department was notified about the cell phone purchases. Two men have been questioned in Hartford City, Indiana.

22-year-old Bilal Muhamed Mustafa and 29-year old Sultan Allah Muhammond came to the Alco discount store looking to buy a particular model Nokia Trac phone in bulk. Terrorism experts say Tracphones can't be traced and are known to be used by terrorists as detenators for bombs.

"Oh I was suspicious," said Alco Store Manager, Kenny Mazelin. " They always said after 9/11 be vigilant with cell phones sales and that we should contact somebody." That's just what store manager Kenny Mazelin did. The men drove a grey Nissan Altima rental down from Minnesota and just recently got Minnesota id's.

"We were told Minnesota cops questioned one of their brothers for the same type of business transaction regarding cell phones," said Detective Eric Hawk, Hartford City Police. Mustafa told police he buys the cell phones and puts a special chip in them that can make them work as prepaid on any cell network. He said he then sells the phones at a small profit.

The two men weren't interested in buying the minutes it takes to activate the phones only the phones themselves at Alco. They wanted as many as they could get and had cash to pay for them. "They told us they'd buy forty if we had 'em," said manager Mazelin."They came in three times, police got here in time to question them the third time."

The men evaded officers questions and didn't want their pictures taken. It's not illegal to buy cell phones in bulk. Neither men were arrested or held for further questioning. Fox 59 reached Bilal Muhamed Mustafa on a cell number he gave police. He hung up. Police say the case remains open.

[scan58]

Doesn't say if they were MEs or not, either. (But we know they were.)
We keep hearing about all these guys buying up these phones to sell for a profit. I would like to know where/how they are intending on selling them. Who's buying them? I'm sure that's come up in the questioning.

[sheik yerbouty]

They ought to be made to wait in their jihadistans..

[stlnative]

Thanks for the info...

here is how they are unlocking them

http://www.howardforums.com/archive/topic/756978-1.html

[stlnative]

Danny see post 45

[MinuteGal]

"The men drove a grey Nissan Altima rental down from Minnesota and just recently got Minnesota IDs."

Minnesota, Minnesota, what does this spark in my little grey cells?

Ah, yes, one of those missing Egyptian foreign exchange students was arrested the other day in Minneapolis.

Sounds like a little bit of congregatin' going on in the Land of 10,000 Sheiks.....er, I mean Lakes.

Leni

[stlnative]

Here some more info...

http://arstechnica.com/news.ars/post/20060217-6205.html
Prepaid cell phone provider tries DMCA smackdown
2/17/2006 12:31:05 PM, by Eric Bangeman

Almost every cellular provider sells its phones at a deep discount when you agree to sign up for service—either on a contract or prepaid. In the case of TracFone, they sell locked Nokia handsets below cost and then make their money by selling prepaid minutes. So far, so good. In the fine tradition of American entrepreneurialism, Miami-based Sol Wireless Group saw a business opportunity and began buying phones from TracFone, unlocking them so they can be used on any network, and then reselling them at a tidy profit.

When TracFone discovered that its Nokia 1100 and 2600 phones were being resold, they hired a private investigator to, well, investigate. After negotiating the purchase of a handful of phones, a PI went to the Sol Wireless store:

~SNIP~

[ricardobaltazar]

It's been mentioned already but yes, you can take those cheap ass prepaid phones and unlock them to make them usable on amy GSM network provider. That makes them worth a lot more, especially in other countries.

Either the the authorities know more than we do or they're retarded or they just want more terrorism funding for their department.

As far as I know, the charges have been dropped because they have nothing on these men.

[Walkingfeather]

Here is my question... If there is some kind of profit scheme in this why are we not seeing Asians buying up cell phones like this? The asian community is technology and profit savvy. I would ask them where they got the cash? Why are all of them paying in cash ( non traceable) and if so are they filing taxes on this nice little profit? Please provide a list of these customers. Where do you advertise these? Can we find evidence of this money making business such as ( customers, demographics, etc).

[stlnative]

http://hosted.ap.org/dynamic/stories/M/MI_PHONES_TERROR_CHARGES_MIOL-?SITE=MIDTN&SECTION=HOME&TEMPLATE=DEFAULT

Aug 16, 6:52 PM EDT

Texas men arraigned on federal charges in cell phone case

~SNIP~

The federal complaint contains no mention of terrorism. It alleges that the three men defrauded consumers, TracFone Wireless Inc. and Nokia Corp.

Miami, Fla.-based TracFone sells prepaid cellular phones with a limited number of minutes at subsidized prices. It makes money when buyers of those phones purchase additional minutes from the company.

The government alleges the men are part of a scheme to buy up phones that Nokia makes for TracFone and then remove TracFone's proprietary software, making it possible to use the handsets with any cellular provider.

By altering the phones, they're no longer genuine Nokia products even though they bear Nokia's trademark, the government says.

The complaint said TracFone estimates that more than 800,000 of its telephones have been "fraudulently converted."

People involved in the trade of so-called "unlocked" cell phones maintain that it is legal.

Consumer advocates say locking the phones in the first place is illegal, and there haven't been any court rulings about the legality of removing the phones' software.

The money laundering charge stems from the government's contention that the men used proceeds from their trade in cell phones to buy more cell phones.

Ayad said all the information in the federal complaint came from the defendants' own statements to the FBI in hours of interviews before they were charged in Tuscola County, about 80 miles north of Detroit.

~SNIP~

[stlnative]

PING to my posts in this thread

Basically they are buying certain cellphones so that they can be unlocked and then used on any cell network.

[stlnative]

http://www.bennetlaw.com/practice_area.php?id=47&article=625

03/10/2006

TracFone Obtains Permanent Injunction Against Handset “Unlockers”

The United States District Court for the Southern District of Florida (Federal Court) has ordered Sol Wireless Group, Inc. (Sol) to immediately and permanently halt “unlocking” TracFone Wireless Inc. (TracFone) pre-paid cell phones. Handset “locking” involves encrypting a handset so that the handset is not functional on another carrier’s network unless a key code is entered to unlock the phone. In its complaint Tracfone argued that Sol was engaged in an unauthorized and illegal wireless telephone business where Sol was purchasing large numbers of pre-paid handsets, altering the handsets’ software computer code to “unlock” the handset from being tied to TracFone’s network and then reselling the handsets as new for use on other wireless carriers’ networks. The Federal Court’s order came as a direct result of a settlement reached between the parties whereby Sol was enjoined from: (1) purchasing or selling any wireless mobile phone bearing the TracFone trademark; (2) altering or unlocking any TracFone handsets, or assisting anyone with altering or unlocking TracFone handsets; (3) using the TracFone trademark; and (4) misrepresenting used products as new or misrepresenting that TracFone warrants the used and/or re-conditioned phones. Any violation of the permanent injunction by Sol could lead to the imposition of penalties of up to $5,000 per phone.

[stlnative]

Terror Charges Dropped Against Two Cell Phone Suspects
Prosecutors In Michigan Stand By Charges Against Three Others

http://www.clickondetroit.com/news/9682097/detail.html

DETROIT -- Federal authorities told local law enforcement last winter to be on the lookout for people buying large numbers of prepaid cell phones. Authorities in Michigan and Ohio were clearly listening: They arrested five men doing just that last week and charged them with terrorism-related offenses.

But on Monday, an Ohio prosecutor said he was dropping the charges he brought against two Dearborn men because he could not prove a terrorism link. Supporters of the five men have said all along their only purpose was to make money through a perfectly legitimate business and that they were targeted because of their Arab descent.

Prosecutors in Michigan were standing by the charges against three Texas men, though they have not said what they believe the men intended to do with the phones. The men's lawyer said he believed they too were wrongly targeted.

~SNIP~

TracFone Wireless Inc. sells prepaid cell phones at major retailers like Wal-Mart. The Nokia or Motorola handsets are heavily subsidized and come with limited minutes. The company makes money when customers purchase additional minutes from TracFone.

In a statement, Miami, Fla.-based TracFone said it was aware that people buy the phones in bulk in order to remove the TracFone software -- often called "unlocking" a phone -- and resell the handsets.

The modified handsets can be used with any cellular provider, not just TracFone, said Michael Vargas, a 26-year-old New Yorker who said he is in the business of buying and reselling the phones. Wal-Mart and other stores sell the TracFones for about $20, he said.

The company believes the practice violates its intellectual property, spokesman Derek Hewitt said. He said the company has brought civil lawsuits in some instances.

There has been no definitive court ruling on the legality of unlocking phones. Consumer advocates maintain locking the phones in the first place is illegal.

The FBI and the U.S. Department of Homeland Security sent out joint bulletins in February and March to police departments nationwide warning about the bulk purchase of TracFones for personal profit or financing terrorism, according to FBI agent Mike Brooks and Susan Raber, a spokeswoman for the Ohio Department of Homeland Security.

~SNIP~

[NavyCanDo]

Getting to where you need some sort of a score card to tell all these Islamic mass cell phone buyers apart. This is what the third, fourth, fifth story in the last 2 weeks?

[Hoosier-Daddy]

Sadly, something very large is about to happen. The best thing we can do is be vigilant.

[CindyDawg]

I'm not sure I understand. Are you saying for example you could buy one of these for 20 dollars and unlock it and use Sprint?

[RichardW]

Thank you so much. Now we have to "follow the money."

[spokeshave]

""Mustafa told police he buys the cell phones and puts a special chip in them that can make them work as prepaid on any cell network. He said he then sells the phones at a small profit."

So show me the special chip...

Where does he get it from....?....who makes it....?

I guess the patent attorneys from Texas Instruments, Motorola, Nokia and Qualcom should take a look at this.

Seems at best some leakage of intellectual property.

[RichardW]

That's a damned good question. I wonder how that works as well. I guess someone could get a regular contract with a contract company and then use the subsidized Tracfones for their family and all their friends at no additional cost. But I don't know for sure. And check ebay. They might be dragged into this mess before this plays out. There has to be a bunch of crooks there. I checked earlier and all kinds of crazy schemes are there. Ebay is going to get smacked one of these days for looking the other way.

[RichardW]

I think it is more than a "small profit." Their overhead in driving all over the country to get these phones has to be fairly substantial. It is almost 1,300 miles from Dallas to Michigan where they got nailed for this scam. And there is no shortage of Tracfones in Texas. I checked and they are available in abundance. But Wal-Mart says Homeland Security limits sales to two to a customer and they can't go through the line twice either.

[MSSC6644]

After all, bin Laden said his next move would strike the heart of America's homes.

Makes me wonder if not schools, maybe churches on a Sunday morning?