Phony Phones : Raids Target ‘Cloning’ of Cellular Telephones
Unveiling the first crackdown of its type in the nation, Los Angeles law enforcement officials will announce today the arrest of nearly two dozen men and the seizure of electronic gear capable of stealing millions of dollars worth of air time from Southern California’s cellular companies.
Using the code name “L.A. Blitz,” a 30-member strike force raided dozens of small businesses and homes in Los Angeles and Orange counties during the last three weeks and arrested 22 of the people they believe are responsible for producing much of the equipment behind Southern California’s emergence as the nation’s cellular fraud capital.
“We got the people we believe are at the root of the problem,” said Michael Guidry, a private security consultant retained by the cellular industry to work with local law enforcement officers. “We think we have driven a stake through the heart of cellular fraud.”
Industry and law enforcement officials said the local raids have been so encouraging that the techniques developed here will be used elsewhere in the country to crack down on the explosive growth of counterfeit electronics capable of stealing onto cellular radio airwaves.
“Los Angeles is the prototype for what is going to happen throughout the country,” said Tom Wheeler, president of the Cellular Telecommunication Industry Assn. “We’re going into other major U.S. cities with our teams.”
Cellular companies--claiming losses of $1 million a day--are cracking down on fraud because the abuse is spreading just as the nation’s telecommunications industry is preparing to launch the next generation of wireless telephones. Industry officials fear that the scams will undermine public confidence in the privacy and security of a system that is so easily tampered with.
Agents in Los Angeles have searched primarily for scam artists who alter cellular phones with counterfeit electronics to act as clones of cellular phones owned by legitimate customers. These clones are also known as “no bill” phones because their owners never get a bill for their cellular phone use.
According to Lt. David Barkdull of LA Impact, a countywide cooperative law enforcement group, agents confiscated 66 counterfeit “no bill” phones. More importantly, industry sources said, the agents found evidence that the suspects were prepared to clone thousands of legitimate cellular phones, potentially causing millions of dollars in losses for cellular system operators in Los Angeles.
The most surprising find of the raids, officers said, was computer software capable of fraudulently producing a virtual “free-for-life” cellular phone. Investigators said they had long feared the existence of such software because of the devastating impact it could have on cellular companies.
The “no bill” scam, the latest to hit the cellular industry, has proven especially vexing for cellular system operators because it is being pulled off by a myriad of small-time con artists. Equipped with just a personal computer and some software, these criminals--most of whom are young men with a background in electronics--operate out of flea markets, tiny electronics shops and even their own garages.
Agents said the initial suspects were found through tips from legitimate cellular customers who had received “no bill” propositions and through leads offered by some of those arrested. All the men arrested face felony state charges carrying a maximum one-year prison term. More arrests are expected soon.
According to telecommunications industry officials, Southern California is home to about 11% of the 10 million cellular customers in the United States and generates about a third of the country’s cellular fraud.
The latest “no bill” fraud started here earlier this year and has spread rapidly, largely because it is relatively easy to do with the proper equipment.
