> Khudaverdyan obtained more than $25 million for these criminal activities.
I wonder how much economic value he created for “hundreds of thousands” of consumers by removing T-Mobile’s artificial restraints on competition.
I wonder how much economic value he created for “hundreds of thousands” of consumers by removing T-Mobile’s artificial restraints on competition.
This sort of detail isn't going to be the focus of the DoJ press release because it's tangential to the case, and harder to prove than the (fairly clear-cut) unauthorized computer access angle. But it's in there -- notice the mention that the store owner's actions "allowed the phones to be sold on the black market", for example, as well as the prosecutor's statement that he "further[ed] the trafficking of lost and stolen cell phones".
I don't doubt that there were stolen devices involved, but it's actually really easy for me to imagine finding a few hundred thousand customers who would pay for an "official" unblock so they can switch carriers.
Some numbers:
1. >50% of customers are willing to change their carrier
2. T-Mobile has 100M customers
Conservatively, this gives a TAM of at least millions, maybe 10s of millions, of customers per year. And he had, let's say, 500K, probably less, total customers over the years. So he was getting, what, 1% of non-phone-thief customers per year? Less? Easy to imagine getting there without working with phone theft rings.
But yeah, obviously hacking the telecom is a no-no.
If cars dealerships also owned their own network of fuel stations. They sell you the car for cheap but require you to use their network of expensive fuel stations for x years. The cars have an encrypted chip that detects if its connected to the specific approved gas station when filling. Now if you try and sell it there is no real market because the buyer can only use it at the specific dealerships gas network and that dealership could also lock that buyer out if it chose.
Now someone has gained access to the car dealerships database and unlocked a bunch of cars for a fee. Is that good or bad I donno.
I think the important thing to remember is that whatever "artificial software limitation" is imposed on the phone was done so with the knowledge of the person signing the contract when the phone was leased. At least I have to assume it is called out in the contract.
Even in the GP post its not "your" car. You don't "own" the car when you lease-to-own you are renting it under a contract which gives you very specific right to "own" the car at the time of your last payment or when you are able to pay it in full. Ownership is determined by the name on the Title Certificate which would be in the dealership's name until you make the final payment or pay it off beforehand in full.
A group of fraudsters goes into dealerships with stolen identities and attempts to finance $0 down cars so they can export them to West Africa and make a fortune because they are not ever going to pay for the cars. Only some dealers have "kill switches" (look it up) that they use to remotely brick cars they stop receiving payment on. So someone like Khudaverdyan comes along and offers a kill switch disabling service so the cars will still work after the fraudsters have moved them out of the country. I think most people would agree that is wrong.
https://www.fcc.gov/general/cell-phone-unlocking
Unlocked phones have long been available for purchase, and no one is forcing anyone to choose to accept a mobile network subsidy in exchange for the lock.
Locked phones are a heavily subsidized option that let the carrier make back their money on monthly service.
Phones are locked while people haven't paid off the purchase price, generally across 2 years of installments that are combined with the cell service plan.
Unlocking them is straight-up theft -- it lets you use the phone without having paid for it.
This isn't something akin to pirating movies or cell service. It's straight-up getting hardware -- phones -- without paying for them. It's physical theft pure and simple.
Assuming they're not that dumb, I don't understand the point of locking.
The lock on the phone reduces the risk of nonpayment from the borrower, and effectively allows for cheaper financing.
This seems pretty non-obvious to me. Maybe it reduces the incidence of straight-up theft, but if someone runs into financial difficulties and can't continue paying for service, they can get more on the used market with an unlocked phone and use that money to pay off the debt/exit the contract.
Obviously that's not an outcome the carrier wants, but now we're back to locking as a mechanism to keep people stuck to the carrier.
But if you just don't pay, what are they supposed to do? They send it to collections, which has a small recovery rate. It's far more effective to use the phone lock.
And the culprit here hacked into T-Mobile's systems to get around their procedures. I also wouldn't be surprised if he was being paid precisely by a lot of people who signed up for contracts and expensive phones with a stolen credit card and stolen identity.
These people (or the people who buy phones off them) are almost exclusively the major customers of any unlocking service, at least with iPhones. Which for some reason is something the rest of the people in this thread fail to understand.