Three former employees of AT&T have been sued by their former employer for illegally unlocking contract-bound mobile phones. The lawsuit was filed in U.S. District Court for the Western District of Washington by AT&T. The company identified Nguyen Lam, Marc Sapatin and Kyra Evans as the employees who participated in the scheme. Swift Unlocks, an Anaheim, California-based company that the defendants were helping with the scheme, is also named in the lawsuit.
The three former mobile phone sales representatives from Washington state are accused of participating in an unlocking scheme that unlocked thousands of mobile phones bound to AT&T contracts. After unlocking, the devices would be able to work with any other wireless carrier. The employees were able to unlock a significant number of devices in milliseconds.
Aside from breaching the contract the customers made when purchasing the phone, the scheme resulted in huge losses for the company. Wireless carriers sell locked phones at a reduced price and recover the money by selling their network services to their customers. If they cannot ensure that the customers will use their services for a sufficient period of time, they cannot recoup the losses from selling the phones at a discount.
To accomplish the task, the former employees allegedly installed malicious software into the work computers of the AT&T store where they worked that could unlock the devices with automated requests. The software allowed Swift Unlocks to access AT&T machines and steal the information needed to generate the unlock codes. Swift Unlocks charges a fee for unlocking a wide variety of mobile phones.
The lawsuit says that the former sales representatives made between $10,000 and $20,000 in profit from Swift Unlocks before the scheme was uncovered. The company launched an investigation after suspicious activity was reported by their bosses. AT&T is asking for all the lost profits from the sold mobile phones and all of the money earned by the participants in executing the scheme. The lawsuit doesn’t mention criminal fraud, but it could still lead to an arrest of the former employees.