Former Employee of Telecommunications Company Charged for Large-Scale Mobile Phone Unlocking Scheme

 

 A former telecommunications company employee was charged for his role in a scheme to fraudulently unlock the Subscriber Identification Module (SIM) cards of thousands of mobile phones, U.S. Attorney Philip R. Sellinger announced today.

Richard Forrest Sherman, 43, of previously of Salem, Oregon, and now Boerne, Texas, is charged by complaint with wire fraud conspiracy in Newark federal court. He was arrested today in Texas, had his initial court appearance before U.S. Magistrate Judge Henry Bemporad in federal court in the Western District of Texas, and was released on $30,000 unsecured bond.

According to documents filed in this case and statements made in court:

Sherman worked at a multinational telecommunications company. While there, he managed an account for a customer that received an exemption to unlock the SIM cards of mobile devices. Sherman exploited this exemption by creating a series of customer accounts within the carrier’s system to make the accounts look like an affiliate company of the customer that actually received the exemption. Sherman and others then submitted bulk unlocking requests through these fake affiliate accounts that Sherman set up before leaving the telecommunications company. 

Sherman, through his entities, received payment from others in exchange for causing the fake affiliate accounts to successfully send International Mobile Equipment Identity (IMEI) numbers in bulk to the carrier. The carrier, believing that the fake affiliate company was entitled to the unlocking exception, unlocked these IMEIs in bulk. Unlocking these IMEIs permitted others involved in the scheme to resell the phones for profit – the phones would have otherwise remained locked or required payment of a fee to be unlocked. Sherman set up the fake affiliate accounts in or around 2013; he and his conspirators exploited the fraud scheme until it was discovered in August 2020. 

The wire fraud conspiracy count is punishable by a maximum of 20 years and a fine of $250,000 or twice the pecuniary gain to the defendant or loss to the victims, whichever is greatest. 

U.S. Attorney Sellinger credited special agents of the U.S. Secret Service’s Seattle Field Office, under the direction of Special Agent in Charge Robert Canestrari, with the investigation leading to the charge.

The charge and allegations contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.