Defense attorneys outraged as terror case switches to fraud (Michigan Mackinac Bridge case)

The Saginaw News ^ | Thursday, August 17, 2006 | JOE SNAPPER

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BAY CITY -- Lawyers for three Texas men once accused of plotting to blow up the Mackinac Bridge claim the government is bailing out an overzealous prosecutor by bringing unprecedented charges.

Until Wednesday, even the FBI said the business of buying and altering cell phones -- as the men claim was their only motive -- was a legal enterprise, and that the only issue was whether proceeds end up in terrorist coffers.

But now, the FBI and U.S. attorneys in Bay City say the entrepreneurial behavior of three Americans of Palestinian descent amounts to fraud, not terrorism.

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[ndt]

"I really believe there is something much more sinister going on."

Hey CindyDawg, remember me, the one telling everyone not to freak out? There is a reason we have protections that require evidence, and this is a perfect example of why.

The classy thing to do at this point is to admit mistakenly arresting innocent people. Not that I expect a lot of that around here.

[jonrick46]

"The batteries wear down too fast, so they substitute longer lasing batteries, so that it can sit for a week and still work.

Just my two cents worth: Maybe they took out the batteries, knowing they could resale the batteries. The cell phones would then go over seas without batteries and be repackaged with cheaper batteries.

[ArmstedFragg]

Your two cents is worth considerably more. Take a look at the cost of replacement batteries at somewhere like www.radioshack.com. You can almost pay for the cost of the phone by selling the battery and charger.

[LachlanMinnesota]

I'm talking about the context of using the phones for detonation of explosives. If it is to detonate an IED, then a regular cell phone battery might not last the week or so that they want the IED to be buried before they light it off by dialing the number. They would install better batteries to use for that purpose, IMHO.

The old batteries could probably be sold off to someone and the money kept for airfare.

This assumes though that they had nefarious intent.

[conservative in nyc]

That case though was different in that they sold the X-Box consoles with pirated games included on the harddrives. It wasn't just about the modification.

Not exactly. According to this article, the California store owners pled guilty to conspiring to traffic in a technology used to circumvent a copyright protection system, which doesn't necessarily have anything to do with actually pirating any games. (Their co-conspirator, who actually did the modifying, is on the lam). Sale of a product that is intended to circumvent a copyright protection system would be enough. A Virginia man was also similarly charged and sentenced to jail for merely importing and selling the Xbox mod chips.

Precedent for charges similar to those brought against the Dallas area men IS out there, but the prosecutor decided to charge them with general fraud instead of a more specific DMCA violation for some reason. Perhaps the TracFone software isn't protected under the DCMA.

[conservative in nyc]

The classy thing to do at this point is to admit mistakenly arresting innocent people. Not that I expect a lot of that around here.

What they are doing - unlocking locked cell phones so that they can be used on any network, and then reselling those phones for profit - could conceivably be illegal. It's certainly a gray market and gray area.

[CindyDawg]

I would rather Americans be cautious and alive than classy and dead. Did you see my post where these things are showing up as weapons too?. Yeah this may be a money maker but we should follow where the money is going. When some things don't seem on the up and up and actions can't be explained I think it needs checking out. I'm really not in to being "right" Actually I hope you turn out to be. Time will tell, I guess.

[ndt]

"What they are doing - unlocking locked cell ... It's certainly a gray market and gray area."

But compared to what these guys have been raked over the coals for on these threads and in real life, they are angles.

[conservative in nyc]

To some FReepers, the only possible explanation for any unusual event is terrorism. If a Muslim is involved in the event, the designation is automatic, and no other logical explanation will change their mind.

We all didn't think these purchases made much sense - FReepers, the Wal*Mart clerk, the local police, and the FBI. I realized a few potential arbitrage opportunities in prior posts, where the value of the phone parts might be worth more than the phones themselves. But there appears to be a much simpler (and to some, less sinister) explanation for what the men were doing.

That some people come to rash judgments don't make what these men were doing anything more or less of a crime. And I don't think the US Attorney's legal theory is totally out in left field. Novel when applied to cell phones? - yes. Unprecedented when compared to other electronic goods? Perhaps not.

[JeffAtlanta]

I'm being thick-skulled because some enterprising entrepreneur wants to re-sell phones for a profit, when they can be bought in bulk legitimately, and the purchase can be tracked. I think the IRS would like to hear about this little 'business' if anything. Not that I'm fond of the IRS.

Happens all the time on ebay. It's very common for people to find discounted items at local stores like Walmart and then resell them on ebay.

[JeffAtlanta]

Walmart.com will ship the TracFone Motorola GSM C139-4 right to your door for $24.94 This story doesn't pass the smell test.

Yet I can sell a hard drive on ebay at a higher price than a person could get shipped free to their door from Fry's Electonics.

Not everyone knows what things cost or where to get them. There's a reason why convienenence stores can sell a soft drink for $1.50 while you could buy it for $.20 at the Walmart across the street.

[vbmoneyspender]

There is a theory that the reason why a premium is paid for hard drives on ebay is that many people fail to wipe their hard drives before selling them. As a result, unscrupulous buyers on ebay are able to lift credit card info off of the unwiped drives.

[JeffAtlanta]

I would rather Americans be cautious and alive than classy and dead.

Then why not just arrest everyone just to be cautious.

Terrorists are a real threat to the country but so is hysteria. If we keep crying wolf, we're going to miss the real terrorists.

[ArmstedFragg]

It'd be a really challenging thing to write legislation about. The unlocking process involves using the phone, and manipulating the buttons on the phone, and that's all. So, there's no copywrite circumvention device you can attack. There is some precedent with charges brought against those who were unlocking the cellular frequencies on scanners, but in most cases those were physical modifications. There'd be a civil issue regarding violating the license agreement, I guess.

Then, of course, there'd be interesting anti-trust questions if all the cellular providers got together and decided not to provide to service to anyone not using one of their phones.

At any rate, you'd think the focus would have to be on the individual doing the actual unlocking, not on an individual who just sells him phones. It's be a pretty long conspiracy chain to stretch. The appropriate avenue of attack on the guy who buys the phones retail and resells them to the unlocker would probably be in the business license, tax, or sales tax areas. As you said..... graysville.

[JeffAtlanta]

There is a theory that the reason why a premium is paid for hard drives on ebay is that many people fail to wipe their hard drives before selling them. As a result, unscrupulous buyers on ebay are able to lift credit card info off of the unwiped drives.

You can sell unopened hard drives on ebay for more than what a person can get shipped to them free at Fry's. In fact, every time Fry's has a big sale, ebay is flooded with hard drives the next week.

Fry's uses hard drives as loss leaders and at times sells them for less than cost.

Cell phones are marketed the same way.

[vbmoneyspender]

Buyers Scour eBay For Data-Rich Hard Drives

"I think that many drives sell for more than their market value," on eBay, Garfinkel said in an e-mail interview with TechWeb. The only explanation: they're playing the possibilities, and expect there's data on some of the drives they buy.

[geopyg]

The one that gets me is that in one of these vehicles they also found airline passenger manifestos and internal airline scheduling information. The cops said it was "old material and left in the vehicle by a relative who worked at an airport".

[conservative in nyc]

At any rate, you'd think the focus would have to be on the individual doing the actual unlocking, not on an individual who just sells him phones. It's be a pretty long conspiracy chain to stretch.

Well the US Attorney's office appears to be claiming the arrested men did the unlocking, so the chain isn't that long here.

Here's what TracFone's terms and conditions of service (a.k.a. shrink wrap contract) says about unlocking (with my emphasis added):

By purchasing or activating a TRACFONE or using any TRACFONE service ("Service"), customer ("You") acknowledges and agrees to the following terms and conditions:

--Snip--

UNAUTHORIZED USAGE
You agree not to tamper with or alter your TRACFONE or its software, enter unauthorized PIN numbers, or engage in any other unauthorized or illegal use of your TRACFONE or the Service. Improper, illegal or unauthorized use of your TRACFONE may result in immediate discontinuance of Service and prosecution to the full extent of the law. TRACFONE Wireless reserves the right to cancel any Service without notice.

It sounds to me that TracFone thinks unlocking the phone is a breach of contract, if not illegal. Whether that would hold up in court is a different story.

A Wired News reporter Jennifer Granick concludes that the sale of unlocking software probably isn't illegal, despite the cell phone companies' protestations to the contrary. She thinks that the Sixth Circuit's decision in the Lexmark case would preclude it. Lexmark wanted to require its printer owners to buy its cartridges, and added a "secret handshake" that needed to be communicated by the cartridge to the printer in order for the printer to work. Lexmark sued generic printer cartridge manufacturers for violating the DCMA by selling cartridges that worked with Lexmark's "secret handshake". After winning their initial case, Lexmark lost in the Sixth Circuit. Granick thinks the cell phone locks are similar to the "secret handshake".

[jonrick46]

If the cell phones were to be used for IEDs, you would put a cheap non rechargable battery in them. Since they were a one shot device, there is no reason to keep a more expensive rechargeable battery in them. In fact, such batteries and their recharger could be sold at a profit, and as post #83 said, you could almost get the cost of the phone from their sell.

[jonrick46]

Correction: "sell" = sale.