Three Former Employees charged in a lawsuit by AT&T

21 Sep 2015 | Author: | No comments yet »

AT&T Files Lawsuit Against Staff Engaged in Unlock Scheme.

AT&T is suing three former employees who the telecommunications giant claims were paid by another company to place malicious software programs on AT&T phones, PCmag.com reported. If you work at an AT&T store, but moonlight on the side by helping other resellers fraudulently unlock AT&T phones (through AT&T’s own systems), then odds are good at AT&T isn’t going to be very thrilled with you.Three former AT&T employees are alleged to have participated in an unlock scheme, allowing thousands of cell phones to function on any wireless network. The company would sell unlock codes for anything from an iPhone to a Fire Phone, letting AT&T customers wriggle out of their contracts long before the subsidy was paid off. Consumers are legally allowed to request that their carrier unlock their phones — once they’ve been paid off in full — so that the phone can then be connected to a competing carrier’s network.

When a phone is unlocked, according to the complaint, “it can be used on multiple carrier systems rather than exclusively with AT&T,” a change which cuts directly into the heart of AT&T’s business model. This created a profit motive to enable easier unlocking, and a company called Swift Unlocks, which AT&T is also suing, made a business of unlocking AT&T phones. According to AT&T representatives, in 2013 Evans received a $20,000 bribe from Vira to create, install and run malware programs on the company’s protected computer network.

District court, the three “perpetuated the Unlock Scheme by creating, distributing, and placing on AT&T’s computer systems a ‘malware’ program designed to fraudulently, and without authorization, transmit unlock requests that unlocked hundreds of thousands of phones from exclusive use on AT&T’s network.” Of course, they didn’t do this for free. The company first noticed the scheme when it saw a noticeable uptick in the number of unlock requests issued by two call-center employees, often within milliseconds of each other. Sapatin told at least one other AT&T employee he was trying to recruit that he knew an individual that had paid to develop software designed to unlock phones. The carrier, the nation’s second largest, says the defendants created a software program that allowed an external server to issue unlock permissions to AT&T phones. As the provider’s complaint states, Sapatin promised other employees that they would earn $2,000 every two weeks, just for downloading the malicious software and allowing it to run in the background on the computers.

The lawsuit describes comprehensive details of the scheme, with the defendants making a profit of between $10,000 and $20,000 in the illegal activity. Unfortunately for the accused, those requests were still being made under their own employee codes, so the company quickly traced the new requests back to them. “It’s important to note that this did not involve any improper access of customer information, or any adverse effect on our customers,” an AT&T spokesman told The Verge. The breach is all the more significant given the revelation last month that AT&T handed over more than 1 billion domestic cellphone calling records per day to the NSA since 2011. The malware allegedly sent a bunch of proprietary and internal AT&T information to the the aforementioned defendants and up to 50 other “John Doe defendants” AT&T names in its complaint, which they would then use to tweak said malware, pass off to Evans, and have her reinstall on AT&T’s systems.

During the same period, AT&T was hacked by a criminal organization looking to unlock stolen phones before selling them, a breach that also resulted in a $25 million fine from the FCC. A vast number of the unlocked devices are claimed to have been resold at a later date, and have been suggested to have helped reward those involved in the the scheme. AT&T has a particularly strict policy against the practice of unlocking, which gives users the possibility to run any compatible SIM card on their device, regardless of the network operator. The multinational telecommunications company has asked for both financial damages, as well as injunctions to prevent the defendants from continuing with the illegal scheme.

According to Marty Richter, the company’s spokesperson, AT&T is seeking damage and injunctive relief, consisting in any lost profits, the amounts received as bribes, plus interest. The company site describes why a mobile device user would want to unlock it, saying it makes it possible to switch carriers to take advantage of promotions, and it can make switching SIM cards for international travel easier. It is uncertain if the defendants may have to serve prison time if proven guilty: although the complaint doesn’t refer to any criminal fraud, one of the accusations it lists is a matter of criminal law.

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