NEWARK, NJ — A former employee of a multinational telecommunications company has admitted to participating in a wire fraud conspiracy that enabled the unauthorized unlocking of thousands of mobile phones, according to U.S. Attorney Alina Habba.
Richard Forrest Sherman, 46, pleaded guilty to one count of wire fraud conspiracy before U.S. District Judge Madeline Cox Arleo in Newark federal court. This charge carries a maximum penalty of 20 years in prison, along with a fine of $250,000 or twice the gain or loss involved, whichever is greater.
According to court documents, Sherman previously managed an account for a customer who had received an exemption from the carrier’s standard SIM card unlocking restrictions. Around 2013, Sherman began using this access to create fraudulent customer accounts within the company’s internal system. He falsely portrayed these accounts as affiliates of the exempt customer, enabling him to submit bulk unlocking requests for thousands of International Mobile Equipment Identity (IMEI) numbers.
Sherman received payments from third parties in exchange for submitting these fraudulent unlocking requests, which the carrier approved under the mistaken belief that they originated from a legitimate affiliate. Once the phones were unlocked, they could be resold for a profit, bypassing the usual fees or restrictions that would normally limit their resale value.
The scheme ran undetected for nearly seven years, continuing until it was uncovered in August 2020. Despite leaving the company before the fraud was exposed, Sherman continued to benefit from the fraudulent activity through business entities he controlled.
The investigation into Sherman’s actions was led by the U.S. Secret Service’s Seattle Field Office, under the guidance of Special Agent in Charge Glen Peterson. The case is being prosecuted by Assistant U.S. Attorney Sean Nadel of the Narcotics/OCDETF Unit in Newark.
Sherman’s sentencing has not yet been scheduled, and he remains subject to the court’s adjudication under the terms of his plea agreement.
The case serves as a reminder of the significant penalties that can accompany wire fraud and the unauthorized unlocking of mobile phones, a practice that has significant legal and financial repercussions. The telecommunications industry continues to face scrutiny over security practices and the efforts to prevent similar fraudulent schemes from undermining consumer trust.
