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Cops Claim Victory After Busting $1m Phone Fraud Ring

Twelve defendants have been charged with offenses relating to a $1m smartphone fraud ring in which over 3300 customer accounts were illegally accessed.

The massive fraud campaign is said to date back to at least 2014. Members of the gang would hijack customer accounts using credentials either phished or bought on the dark web, or even fake ID in store.

They would then physically buy new devices or upgrades in-store, charging the majority of the cost back to the customer’s account. Some also opened new accounts using victims’ Social Security numbers. The devices were mainly sold for profit in the Bronx, according to the Department of Justice.

During the investigation, a Homeland Security Investigations (HSI) team searched a property in Mt Vernon, New York where six of the 12 defendants were found along with 47 electronic devices. Investigators claimed two IP addresses associated with the property were used to access around 3300 smartphone customer accounts and fraudulently purchase at least 1294 devices.

The 11 computers also seized contained evidence of a 15-minute “how to” video on smartphone fraud, indicators they’d been used to visit dark web sites and numerous Google searches relating to fraud.

Each of the 12 has been charged with one count of conspiracy to commit wire fraud, and one count of aggravated identity theft, which could land them a sentence of over 20 years.

“Those arrested today were allegedly part of a fraud network operating in New York, the Dominican Republic and the Darknet. Their activities left a trail of unsuspecting victims across the United States and cost businesses significant losses,” said HSI special agent in charge, Angel Melendez.

“They traveled to 30 states to obtain cellphones that were later sold through fencing operations in the Bronx. Telecommunications fraud is a huge business and where there is a profit to be made by criminals, HSI’s longstanding El Dorado Task Force will follow the money to bring those perpetrators to justice.”

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