Former Employee of Telecommunications Company Admits to Wire Fraud Conspiracy

NEWARK, N.J. – A former telecommunications company employee admitted to wire fraud conspiracy for his role in a scheme to fraudulently unlock the Subscriber Identification Module (SIM) cards of thousands of mobile phones, U.S. Attorney Alina Habba announced.

Richard Forrest Sherman, 46, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court, to an information charging him with wire fraud conspiracy.

According to documents filed in this case and statements made in court:

Sherman worked at a multinational telecommunications company. While there, he managed an account for a customer that received an exemption to unlock the SIM cards of mobile devices. Sherman exploited this exemption by creating a series of customer accounts within the carrier’s system to make the accounts look like an affiliate company of the customer that actually received the exemption. Sherman and others then submitted bulk unlocking requests through these fake affiliate accounts that Sherman set up before leaving the telecommunications company.

Sherman, through his entities, received payment from others in exchange for causing the fake affiliate accounts to successfully send International Mobile Equipment Identity (IMEI) numbers in bulk to the carrier. The carrier, believing that the fake affiliate company was entitled to the unlocking exception, unlocked these IMEIs in bulk. Unlocking these IMEIs permitted others involved in the scheme to resell the phones for profit – the phones would have otherwise remained locked or required payment of a fee to be unlocked. Sherman set up the fake affiliate accounts in or around 2013; he and his conspirators exploited the fraud scheme until it was discovered in August 2020.

The wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims, whichever is greatest.

U.S. Attorney Habba credited special agents of the U.S. Secret Service’s Seattle Field Office, under the direction of Special Agent in Charge Glen Peterson, with the investigation leading to the charge.

The government is represented by Assistant U.S. Attorney Sean Nadel of the Narcotics/OCDETF Unit in Newark. 

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Defense Counsel: Henry Klingeman, Esq. and Robert Westinghouse, Esq.