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:
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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
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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.
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