How AT&T Insiders Were Bribed to 'Unlock' Millions of Phones

A dramatic saga that began with a civil lawsuit between AT&T and former employees has resulted in a high-profile arrest. Muhammad Fahd, 34, and his co-conspirators allegedly paid AT&T employees more than $1 million in bribes over five years to install malware and spying devices at their offices in Washington, according to a Department of Justice indictment unsealed Monday. He was first arrested in Hong Kong in February 2018, and was extradited to the United States Friday. Fahd is accused of orchestrating an elaborate conspiracy from the other side of the world, designed not to steal sensitive customer data or proprietary information but to illegally “unlock” more than 2 million AT&T cell phones.

The newest iPhones and Android smartphones can now cost upwards of $700. To afford them, millions of Americans sign one- or two-year contracts with their mobile carriers, which allows them to pay for their phones in monthly installments. As a protection against theft, carriers “lock” the devices, stopping them from being easily sold or used with another mobile network. Customers can request to unlock their phones for valid reasons like traveling overseas, but an ecosystem of shady entities has sprung up that offer to do it without proper authorization. Some claim to carry out the process via technical means, but Fahd and those who worked with him are accused of recruiting AT&T employees to help unlock phones from the inside, paying one worker as much as $428,500 over five years.