AT&T, T-Mobile hit in $22M handset scam

Eight people were indicted for allegedly using AT&T Mobility and T-Mobile USA customer data to steal more than $22 million in wireless devices, according to prosecutors.

The U.S. Attorney's office in Brooklyn, N.Y., said Gabe Beizem, an owner of a former AT&T and T-Mobile dealership in Brooklyn; Rohan Stewart, a T-Mobile dealer in West Palm Beach, Fla.; and six others were charged with conspiracy and mail fraud.

"Identity theft can ruin customers' credit and seriously disrupt their lives," U.S. Attorney Benton Campbell said in a statement. "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."

The prosecutors said that Beizem, Stewart and the others used dealer access codes to get the customer information from AT&T and T-Mobile's databases. They then allegedly assumed the identities of existing customers to get the devices without paying for them.

"T-Mobile is pleased the alleged perpetrators are being brought to justice. We have, and will continue to, partner with U.S. Secret Service and law enforcement agencies as they pursue this matter, in conjunction with continuing our own investigation," T-Mobile said in a statement. "We will notify our impacted customers and ensure their accounts are credited as appropriate. Additionally, we will offer complimentary credit-monitoring services for customers who may be affected by these actions."

An AT&T spokeswoman said that while the carrier would not comment on specifics during an ongoing investigation, it takes all matters related to customer privacy and security very seriously, and is fully cooperating with the investigation.

"Customer privacy and data security are very important to us. As the investigation unfolded, AT&T put several additional security measures and practices in place to provide further protection of our customers' personal information," the spokeswoman said. "We continue to add security safeguards to protect customer data."

This is not the first time the two carriers have fought against scams. In March, T-Mobile received a final judgment and permanent injunction against unauthorized companies that were reselling and trafficking T-Mobile prepaid phones and accessories. And in July, AT&T said it was awarded separate judgments ranging from $3 million to $5 million in four federal lawsuits against traffickers who resold the carrier's its prepaid mobile phones and accessories.

For more:
- see this Dow Jones Newswires article [1] (sub. req.)