updated 09:03 pm EDT, Tue September 24, 2013
Investigation yielded over 5,300 phones, $800,000 in cash
Criminals in Michigan have managed to defraud Apple retail, Best Buy, Verizon Wireless, and Radio Shack out of thousands of dollars of free or subsidized phones over two years, according to a federal lawsuit filed last week. The US Secret Service discovered the thefts in the beginning of 2012, where the thieves used stolen identities to sign two-year cellphone service agreements, and sold the phones to now-defunct iBuy Express, who peddled the phones overseas after unlocking.
The Secret Service operated over four months, and found that the iBuy warehouse was shipping the phones overseas, with more than 300 phones shipped at a time. In April, the Secret Service seized 5,300 devices and more than $800,000 in cash associated with the scheme.
The suit claims that between January 2 and March 12, iBuy's bank posted $6.9 million in wire transfers incoming, and $3.3 million outgoing to support the fraud. Armored cars were used to move cash from the bank to the bulletproof-glass storefront where the phones were purchased from the "credit mules."
The same company was sued by Sprint for earlier in 2012, where it is alleged that the company made off with phones in a similar scheme. Sprint was awarded $2 million dollars, and iBuy and its officers were permanently barred from buying, selling or unlocking Sprint phones in the future.