Suit aims at wallets of cell-phone crooks Test case: A cellular-phone company is going after the thieves in a Baltimore operation that stole and resold phone codes.

March 20, 1996|By Scott Higham | Scott Higham,The Cellular Telecommunications Industry Association; U.S. Secret Service. SUN STAFF

The high-tech cellular-phone thieves didn't waste any time.

In just six months, two computer-savvy crooks plucked nearly 40,000 secret cell-phone codes from the skies above Maryland and Pennsylvania and loaded many of them into mobile phones they sold on the streets of Baltimore, mostly to drug dealers.

In the end, the Baltimore operation rang up $650,000 in phony phone bills.

Now, in the first case of its kind in the country, a cell-phone company is going after the thieves, reaching out and touching them with a six-figure lawsuit to recover the cash it lost in the illegal cell-phone cloning operation.

Bell Atlantic Nynex Mobile has filed a federal suit in U.S. District Court in Baltimore, claiming that the two cell-phone felons from Maryland swindled the company out of $130,965.

Other phone firms were stung by the sophisticated ring, but they have not filed suit.

Facing more than $600 million in fraudulent calls each year, cell-phone companies are striking back, first by cooperating with investigators to put thieves behind bars, and now suing them for the calls they charged to their unsuspecting customers.

Phone company managers say the Baltimore suit is a test case for the industry, one that could give them a powerful tool to recover losses and send a signal to would-be thieves.

"We need to make a statement to the criminals that we are not going to take this anymore," said Tom McClure, director of fraud management for the Cellular Telecommunications Industry Association, which represents many of the nation's mobile phone firms.

Cell-phone fraud has become a booming business for enterprising criminals. The market and the opportunities for fraud keep growing.

In 1994, there were 16 million cell-phone callers in the United States. Today, there are nearly 32 million more than 12 percent of the nation's population.

"Telecommunications fraud is a big focus for us," said Richard A. Rohde, special agent in charge of the U.S. Secret Service field office in Baltimore, which investigated the Maryland cell-phone case.

How it works

How does cloning work? When the typical cell phone is turned on, it emits radio signals that carry the phone's electronic identification codes.

Using souped-up scanners and antennas, thieves station themselves near mobile phone callers. Malls and major highways are favorite spots.

After thieves snatch the signals from the sky, they run them through computers and sort out identification codes. The codes are downloaded into mobile phones, which are sold for $300 to $1,000 apiece.

Phone cloning operations first hit New York and Los Angeles a few years back. Today, just about anyone roaming anywhere in the country with their cell phone turned on can be cloned within seconds.

Walter S. Orlinsky figures his phone was cloned along Interstate 95 while driving to New York earlier this year.

The former City Council president, who now publishes a weekly newspaper in Baltimore, said he was stunned when he opened his February phone bill.

"All of a sudden, my normally extravagant phone bill went bonkers," he said.

There were about $700 worth of unexplained calls. As in most cloning cases, the phone company paid the bill.

Guarantee from thieves

Some cloning operations are so sophisticated that thieves guarantee their phones.

They offer service contracts, promising to reprogram the phones with a new batch of codes if they ever stop working.

The Baltimore cell-phone ring was one of those operations.

"They were more sophisticated than the average bear," said Leonard J. Johnson, a Secret Service agent who managed the investigation. "They knew what they were doing."

The agency handles the cases because they involve access codes regulated by federal law.

Word of the Baltimore ring started to spread in the fall of 1994.

A Baltimore police detective learned that Edward L. Harrison, 49, an electronics repair man, was selling cloned phones.

Detective Joseph Peters went undercover and purchased several cloned phones from Harrison. Secret Service agents monitored the buys and arrested Harrison early last year.

"We told him he could cooperate, or he could take his chances," said Secret Service Agent Dennis F. Lynch, who supervised the investigation. "He decided to cooperate."

The Secret Service agents confiscated Harrison's computers and phones.

They needed to concoct a cover story to explain to Harrison's partner, Stephen T. Baldwin, 34, why Harrison could no longer clone phones.

The agents told Baldwin that Harrison's computers had crashed. Harrison agreed to introduce his partner to an undercover Secret Service agent posing as a computer whiz who could fix just about anything.

"That allowed us to get a bird's-eye view of what was going on," Agent Lynch said.

Techniques

The agents learned that Baldwin and Harrison traveled to a Pittsburgh shopping mall to steal codes.

Baldwin also put an antenna on the top of the garage of his Essex home to snatch codes from motorists zipping along I-95.

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