Fraudster Sentenced to Prison for Stealing More Than $200 Million from AT&T


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Muhammad Fahd, a citizen of Pakistan and Grenada, was recently sentenced to 12 years in prison for his leadership role in a scheme to unlock nearly two million phones to defraud AT&T, inflicting more than $200 million in losses, according to the Department of Justice. At the sentencing hearing, U.S. District Judge Robert S. Lasnik for the Western District of Washington noted that Fahd had committed a “terrible cybercrime over an extended period,” even after he was aware that law enforcement was investigating.

Beginning in 2012, Fahd, 35, conspired with others to recruit AT&T employees at a call center located in Bothell, Washington, to unlock large numbers of cellular phones for profit, according to the DOJ. Fahd recruited and bribed AT&T employees to use their company credentials to unlock phones for ineligible customers. Later in the conspiracy, Fahd had the bribed employees install custom malware and hacking tools that allowed him to unlock phones remotely from Pakistan. In September 2020, he pleaded guilty to conspiracy to commit wire fraud.  

To make expensive cell phones more affordable, AT&T, for a period of time, subsidized the purchase cost of phones or sold phones to customers under installment plans. Unlocking a phone effectively removes it from AT&T’s network, enabling the account holder to avoid having to pay AT&T for service or to make any payments for purchase of the phone.

According to records filed in the case, in approximately June or July of 2012, using an alias, Fahd contacted an AT&T employee through Facebook. Fahd offered the employee significant sums of money if the employee would help Fahd secretly unlock phones at AT&T. Fahd also asked the employee to recruit other AT&T employees. He told them 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 make it appear the money was payment for genuine services, noted the DOJ.

AT&T’s forensic analysis shows that 1,900,033 cell phones were fraudulently unlocked. The carrier also determined that the loss it suffered because customers, whose cellular phones were illegally unlocked, failed to complete payments for their cellular telephones was more than $201 million.

Judge Lasnik ordered restitution of just over $200 million. (The difference between this amount and the total loss, $201,497,430.94, reflects restitution ordered against bribed AT&T employees in related prosecution).

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 in September 2020.

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