APPLE
PICKING
vent cross-border trafficking —
the first deal of its kind between
the U.S. and another country.
“This, we believe, will be another major blow to the smartphone
black market,” FCC Chairman Julius Genachowski said at the time.
But Mexico is far from the only
foreign market for stolen phones.
British police have tracked stolen phones to 16 countries across
Eastern Europe, Africa and Asia,
where they can be reactivated on
foreign wireless networks.
In 2009, federal agents arrested
alleged Hezbollah operatives in
Philadelphia for attempting to buy
thousands of stolen cell phones
and other electronics from an undercover officer and ship them to
Hong Kong and the United Arab
Emirates. Authorities said the
traffickers planned to use the
profits to finance the Lebanese
arm of the Shiite militant organization, which the United States
considers to be a terrorist group.
Industry experts say dozens of
other phone trafficking rings transport phones around the world.
They involve “runners” who buy
or steal phones in large quantities,
hackers who “unlock” their software for use on other wireless networks, and warehouse employees
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who repackage them in new boxes
with instruction manuals in the native language of their destinations.
“The uptick in street crime can
be attributed to these large operations,” said James Baldinger, an
attorney who has sued more than
200 phone traffickers on behalf of
wireless companies.
“W HY WOULD APPLE WANT
CONSUMERS TO BE A MOVING
TARGET FOR THEFT?”
“Ultimately, a consumer in
some country will walk into a cell
phone store and when the clerk
pulls a box out from under the
counter, they’ll have no way of
knowing that phone began its life
in San Francisco,” Baldinger said.
Phone trafficking to other countries is not only a way to avoid detection by the new stolen-phone
database in the United States. It
also beckons as a more rewarding
business model, with the stark retail price differences between the
United States and foreign markets
making for massive profit margins
on goods stolen from Americans
and sold abroad.
Moreover, many popular smartphone models — Apple products