T-Mobile USA’s Campaign to Protect Customers Against Phone Trafficking and Airtime Theft Continues to Pay Off

April 13, 2011

Courts Enter $19M in Judgments in New Jersey and Illinois

Bellevue, Wash. — Apr. 14, 2011

T-Mobile USA, Inc. today announced it has obtained final judgments and permanent injunctions in four separate lawsuits alleging phone trafficking and airtime theft schemes. The judgments entered by four federal judges in New Jersey and Illinois award damages totaling nearly $19 million and prohibit the defendants from continuing to engage in the alleged misconduct.

The recent victories are the latest in T-Mobile’s ongoing effort to protect its customers and shareholders from the effects of unauthorized bulk purchase and resale of T-Mobile wireless handsets, and the sale of T-Mobile SIM cards for use in fraudulently activating wireless service. In three separate cases in New Jersey – one against John J. Capriotti, another against Jasvinder S. Virdi and his company, Cellimports LLC, and a third against Amaf Jarkasi and his company, ADH Communications, LLC – the federal court awarded T-Mobile damages of $3.9 million, $5 million, and $5 million, respectively. A judgment entered by a federal court in Chicago awarded T-Mobile $4.9 million against Ryan T. Boyle. The defendants in all four cases were found to have profited from unlawfully trafficking in T-Mobile prepaid wireless devices or fraudulently activated T-Mobile SIM cards, and were enjoined by the court from continuing to engage in such conduct in the future.

T-Mobile subsidizes the price of its prepaid wireless phones to make them more accessible to legitimate consumers who want to become T-Mobile customers. Traffickers profit by pocketing those subsidies - preventing consumers from receiving the benefit of the subsidies and depriving T-Mobile of new customers. Traffickers typically buy or solicit others to buy prepaid mobile phones in bulk from retail stores, remove the phones from their original packaging, discard warranties and manuals, hack into the phones’ software, fraudulently activate the SIM card, and then resell the phones, SIM cards, activation materials, and/or accessories to unsuspecting customers at a substantial profit.

Consumers who ultimately purchase wireless devices or airtime from traffickers are harmed and may be misled about the source and origin of the products. The phones may come without manufacturers’ warranties, accessories or user manuals, and airtime that was not legitimately activated on T-Mobile’s network may expire or become disabled. Because the trafficked phones and SIM cards often still carry T-Mobile’s brand, consumers may be misled into believing they are purchasing legitimate products manufactured for T-Mobile and carrying all associated warranties and capabilities.

“T-Mobile is committed to protecting consumers and our company by shutting down traffickers,” said Dave Miller, General Counsel and Chief Legal Officer of T-Mobile USA. “We are pleased by the results in these cases, and we expect similar success in our other pending and planned lawsuits.”

Each of the final judgments and permanent injunctions prohibits the defendants from engaging in activities that are in any way related to fraudulent activation of T-Mobile service, or the bulk purchase, unlocking or resale of T-Mobile phones, SIM Cards, and activation materials, as well as from using the T-Mobile trademark. If the defendants violate the injunctions, the court orders award an additional $5,000 per violation in damages to be paid to T-Mobile.

T-Mobile has already been awarded more than $113 million in judgments against 76 defendants in trafficking cases filed in federal courts across the country as part of its concerted effort to protect consumers from prepaid phone trafficking and activation fraud. The company will continue to aggressively pursue these violations and has plans to file more cases soon.

Lindsay Morio

T-Mobile USA Media Relations