A Group of Fraudsters Managed to Steal $19 Million Worth of iPhones in the past Several Years

BY Mahit Huilgol

Published 5 Jun 2019

It is no secret that when it comes to stealing phones, thieves prefer iPhone! The latest heist was orchestrated by a New York-based group of fraudsters. The fraudsters used identity theft to steal $19 million worth of iPhones and then sold it in the black market. Apparently, the fraudsters ran the scam successfully for many years.

Modus Operandi

The associates used identity theft and posed as cellphone subscribers to get new devices. They got new devices for as little as nothing and this meant that the transaction didn’t raise any red flags.

In the next stage, the associates visited the mobile phone stores with fake debit cards and posed as legitimate customers. The payment for the phone was spread across several months and the victim would only be alerted after he saw the bill. Needless to say, by then the associates would have disappeared in thin air.

The Police Report reads as follows,

Since in or around 2014, the NYPD and the Federal Bureau of Investigation (“FBI”) have been investigating a group of individuals – the “Fraud Ring” – who operated in, among other places, the Southern District of New York, including the Bronx, Manhattan, and Westchester County. From at least 2012 to the present, the Fraud Ring perpetrated a wide-ranging scheme to obtain valuable, new electronic devices, predominantly Apple iPhones.

During the course of the conspiracy, the Fraud Ring fraudulently obtained more than $19 million worth of devices. To facilitate the scheme, the Fraud Ring traveled to approximately 34 different states, but often brought or shipped the fraudulently obtained cellphones back to the Bronx, where they regularly sold them through fencing operations.

It is worth noting that the Fraud Ring compromised of multiple levels and the low-level criminals are now giving evidence against the others for a reduced sentence. Below is an excerpt of the charges filed by the prosecutor.

The Fraud Ring would typically send participants on “trips,” fanning out across the country to fraudulently acquire iPhones. The Fraud Ring’s participants held differing roles within the ring: At the top were the Fraud Ring’s leaders, termed “Top Dogs” by the Fraud Ring’s participants. Top Dogs organized and funded trips, sold fraudulently obtained iPhones and made the lion’s share of the profits. Second were participants who worked with the stolen PII and forged identifying materials. Finally, the Fraud Ring included lower-level trip participants, the runners and drivers, who were actually responsible for using the stolen PII to fraudulently acquire iPhones and then shipping the phones back to Top Dogs in the New York City area.

The informant said that $100 was paid for each iPhone that they obtained from the store. The worst part is that victims will be bearing the brunt of the fraud. It is very important to safeguard ourselves from identity theft and phishing scams. We hope the victims get justice while the perpetrators are put behind the bar.

[Via Quartz]