Wireless scores legal victory against prepaid mobile-phone trafficking : Virgin Mobile USA phones bound for Hong Kong

The first criminal conviction of an international prepaid mobile-phone trafficker was announced by U.S. officials in Houston, news that again highlights a growing problem of global proportions for wireless. Indeed, the issue has already triggered numerous lawsuits by a number of U.S. wireless service providers and handset makers.
U.S. Attorney Don DeGabrielle said Muhammad Mubashir, 27, of Sugar Land, Texas, was held in criminal contempt for attempting to export mobile phones to China in violation of an injunction entered against him by the U.S. District Court of the Southern District of Texas in a civil case brought by Virgin Mobile USA. L.L.C.
On May 9 last year, according to the U.S. attorney’s office, an Immigration and Customs Enforcement agent and a Customs and Border Protection officer examined a shipment at Eagle Global Logistics being exported by Mubashir’s firm, Americas Wireless, to Yeng Fung Trading Company in Hong Kong. U.S. law enforcement officials said the shipment contained 46 Virgin Mobile cellphones, all Nokia Corp. model 2115i, that displayed the Virgin Mobile name and logo.
The agents inventoried the shipment with assistance from a Houston Police Department officer and found the phones had been purchased on April 1, 2007, by Americas Wireless in San Antonio for $35 each, or a total of $1,610. Other cellular phones were purchased on the same invoice for a total of $38,218, according to the U.S. attorney’s office.
While this case involved Virgin Mobile USA, TracFone Wireless Inc. – a major U.S. prepaid wireless company – has been at the forefront of legal efforts to halt a practice in which large numbers of prepaid phones are accumulated and then hacked for resale in Latin America, Asia and the Middle East.
“Honest consumers are harmed when they purchase these altered phones sold as ‘new.’ In most cases, the phones don’t work as they should, and the manufacturer warranty is voided,” said James Baldinger, an attorney with the Carlton Fields law firm that TracFone. “Prepaid mobile-phone traffickers are not legitimate entrepreneurs. We contend they are engaging in unlawful activity that harms American businesses and consumers. The fact that one of them is going to jail is a wake-up call for anyone else engaging in this activity.”
TracFone has filed more than two dozen suits against 80 defendants in federal courts around the country. The legal hammer applied in the suits is trademark violation.
AT&T Mobility, T-Mobile USA Inc. and Motorola Inc. have filed similar suits in the past two months.