AT&T Loses $200 Million to Phone Unlocking Malware

  • By Dawna M. Roberts
  • Published: Sep 28, 2021
  • Last Updated: Mar 18, 2022

A Pakistani hacker was able to install malware with the help of bribed workers and unlock and steal millions of mobile phones from the AT&T U.S. network.

What Happened?

According to Department of Justice (DOJ) records, Muhammad Fahd of Pakistan spent seven years grooming AT&T employees at a Bothell, Washington call center for AT&T to complete his ruse. He convinced the workers to disconnect mobile phones on the AT&T network. He and his now-deceased partner bribed the AT&T employees for their compliance. The workers used their own credentials to log into the system and perform actions to further his criminal activity.

During the 7-year scam, Fahd bilked AT&T out of more than $200 million in lost subscription fees. In addition, the DOJ explained that the 35-year-old cyber thief disconnected more than 2 million phones from the network.

Court documents also showed Fahd enticed AT&T call center employees to install his own malware and “hacking tools that allowed him to unlock phones remotely from Pakistan.”

How Did it Work?

The scam began in 2012 when Fahd targeted an AT&T employee on Facebook using the fake alias “Frank Zhang.” According to Threatpost,

“He offered the employee “significant sums of money” in return for taking part in his scheme, and asked the person to recruit other AT&T employees to the ring as well.”

 

The scam worked by disconnecting phones that were still under contract, and the owners were then able to take them to another service. DOJ court documents said,

“Unlocking a phone effectively removes it from AT&T’s network, thereby allowing the account holder to avoid having to pay AT&T for service or to make any payments for the purchase of the phone.”

 

AT&T loses millions

Additionally, Fahd instructed his accomplices to launder the bribe money “Fahd instructed the recruited employees to set up fake businesses and bank accounts for those businesses, to receive payments and to create fictitious invoices for every deposit made into the fake businesses’ bank accounts to create the appearance that the money was payment for genuine services.”

When AT&T developed new unlocking software in 2013, Fahd hired a developer to create custom malware to do the job for him. “At Fahd’s request, the employees provided confidential information to Fahd about AT&T’s computer system and unlocking procedures to assist in this process. Fahd also had the employees install malware on AT&T’s computers that captured information about AT&T’s computer system and the network access credentials of other AT&T employees. Fahd provided the information to his malware developer, so the developer could tailor the malware to work on AT&T’s computers.”

How Did AT&T Respond?

In 2015, AT&T brought a lawsuit against the call center workers when a fake company called SwiftUnlocks exposed the ruse after they advertised the service of unlocking phones online. The malware was discovered in 2013, and AT&T fired the employees and then sued them personally.

Eventually, the entire operation was traced back to Fahd, who now faces a 12-year sentence in federal prison. Threatpost adds,

“Fahd was indicted in 2017 and arrested in Hong Kong in 2018. He was extradited and appeared in U.S. District Court in Seattle in August 2019. He pleaded guilty to conspiracy to commit wire fraud last September.”

 

Insider fraud and data breaches continue to be a serious concern for large companies like AT&T.  Some employees knowingly engage in malicious activities against their employer, but some are unwitting and do not realize they are being tricked into fraud.

Threatpost summarizes that “AT&T has had its share of trouble, including facing a  $224 million legal challenge  after store employees were caught in a SIM-swapping ring.”

About the Author
IDStrong Logo

Related Articles

Instagram Vulnerability Allowed Hackers Access to Control Your Phone

Security experts Check Point Research discovered a critical vulnerability while examining Instagra ... Read More

Alien Malware Infects More than 226 Mobile Apps and Steals Bank Data

As reported on September 24, 2020, by ZDNet and ThreatPost, a new strain of malware named “A ... Read More

Universal Health Systems Hit by Ransomware Attack

Universal Health Systems (UHS), a Fortune 500 company owning more than 400 hospitals across the co ... Read More

Exchange Server Bug Exposes a Big Risk to Hackers

Months after Microsoft released a patch to fix a serious flaw in MS Exchange Server, more than 61% ... Read More

Clients’ Bank Data Exposed in Blackbaud Ransomware Attack

Blackbaud software was victim to a ransomware attack last May, and new information suggests that c ... Read More

Latest Articles

What You Need to Know about the Delta Dental Data Breach

What You Need to Know about the Delta Dental Data Breach

Delta Dental is a dental insurance provider serving over 90 million Americans. It offers coverage in all 50 states, Puerto Rico, and Washington, D.C. The company was established in 1966 in California as part of the Delta Dental Plans Association.

What You Need to Know about the Hot Topic Data Breach

What You Need to Know about the Hot Topic Data Breach

Hot Topic plays in the fashion, apparel, and shoe industry as a retailer of music-influenced apparel and accessories, such as jeans, tops, belts, dresses, pajamas, sunglasses, jewelry, and tees.

Google Voice Scams: What They Are and How to Stay Safe

Google Voice Scams: What They Are and How to Stay Safe

Google Voice scams continue to pose a risk for users of this service. Scammers continuously attempt to lure users into divulging their verification PIN code.

Featured Articles

How to Buy a House with Bad Credit

How to Buy a House with Bad Credit

Buying your own home is the American Dream, but it might seem out of reach to those with bad credit. However, the good news is, if your credit is less than perfect, you do still have options and in most cases, can still buy a home.

How Secure Is Your Password? Tips to Improve Your Password Security

How Secure Is Your Password? Tips to Improve Your Password Security

Any good IT article on computers and network security will address the importance of strong, secure passwords. However, the challenge of good passwords is that most people have a hard time remembering them, so they use simple or obvious ones that pose a security risk.

Top 10 Senior Scams and How to Prevent Them

Top 10 Senior Scams and How to Prevent Them

Senior scams are becoming a major epidemic for two reasons. First, seniors often have a lot of money in the bank from a life of working hard and saving.

Notice

By proceeding with this scan, you agree to let IDStrong run a Free Scan of supplied parameters of your personal information and provide free preliminary findings in compliance with our Terms of Use and Privacy Notice. You consent to us using your provided information to complete the Free Scan and compare it against our records and breach databases or sources to provide your Free preliminary findings report.

Rest assured: IDStrong will not share your information with third parties or store your information beyond what is required to perform your scan and share your results.

Free Identity Threat Scan
Instantly Check if Your Personal Information is Exposed
All fields below are required
Please enter first name
Please enter last name
Please enter a city
Please select a state
Please enter an age
Please enter an email address
Close