California man facing life for $25m T-Mobile fraud scheme
The former owner of a cellphone store has been found guilty of an elaborate phone unblocking scheme that entailed phishing emails, social engineering, identity theft, and unauthorized computer access.
Argishti Khudaverdyan, 44, of Burbank, California, went to considerable lengths to deprive T-Mobile and other providers of $25 million in contractual revenue, advertising a phone unlocking and unblocking service that allowed clients to keep using their handsets even if they broke the contract.
Khudaverdyan ran the scheme from 2014 to 2019, during which T-Mobile’s policy was to lock customer phones if they ceased using its services before terms and conditions expired, preventing them from using the handsets with another provider. The cunning store owner falsely advertised his service as a legitimate one, sanctioned by the telecom provider, presumably to encourage people to pay to use it.
This strategy appears to have rewarded Khudaverdyan and his associates with success, up until they were caught – during the five years that the illegal scheme ran, it is thought that hundreds of thousands of handsets were unlocked and unblocked, including phones from other providers such as AT&T and Sprint.
Khudaverdyan kept the fraudulent scheme going even after T-Mobile sacked him from his position as co-owner and manager of its Eagle Rock franchise Top Tier Solutions in 2017 for “suspicious computer behavior,” said the US Department of Justice (DoJ), announcing the verdict.
Khudaverdyan now faces the prospect of spending the rest of his life in jail when he is sentenced by a federal court on October 17, having been convicted of 14 charges, including three counts of wire fraud that carry a maximum tariff of 20 years each, and one of unlawfully accessing a computer, for which he could serve up to five years.
How he did it
For five years, Khudaverdyan illicitly unlocked phones provided to customers by T-Mobile, allowing them to be used with other carriers or resold on the black market.
“Khudaverdyan advertised his fraudulent unlocking services through brokers, email solicitations, and websites such as unlocks247.com,” said the DoJ. “He falsely claimed the fraudulent unlocks that he provided were ‘official’ T-Mobile unlocks.”
He gained access to T-Mobile computer systems by sending phishing emails to employees of the telecommunications company and socially engineering its IT help desk.
“Khudaverdyan used the fraudulent emails to trick T-Mobile employees to log in with their credentials, so he could harvest the information and fraudulently unlock the phones,” said the DoJ.
In this way, he obtained vital data from 50 T-Mobile employees, working with accomplices in overseas call centers to accomplish this aim. Khudaverdyan was then able to reset the passwords of high-level workers, facilitating his illicit unlocking and unblocking service.
But he eventually fell foul of the US Secret Service Cyber Fraud Task Force in Los Angeles and the cybercrime unit of the IRS, which investigated him and his accomplices and brought them to justice.
Khudaverdyan’s key accomplice and fellow former co-owner of Top Tier Solutions, Alen Gharehbagloo, 43, of La Cañada, earlier pleaded guilty to three felonies and will be sentenced in December.
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