T-Mobile USA stamps into prepaid trafficking

T-Mobile USA Inc. said it scored two court wins – one awarding the No. 4 wireless provider several million dollars in punitive damages – in connection with mushrooming litigation to curb what appears to be a widespread practice of purchasing prepaid mobile phones in bulk, hacking them and reselling them for profit.
One judgment tagged Rafiq Wazir Ali, whose company is Fone Xchange, in a federal lawsuit filed in Houston, while the other judgment was entered against ASPAC Inc., its principals and affiliates, by a federal court in Dallas. The latter case included a $6.5 million award to T-Mobile USA.
“T-Mobile is committed to protecting consumers and our company by shutting down these traffickers,” said Doug Chartier, VP for retail partner sales at T-Mobile USA. “We are pleased by the result in these cases, and expect similar successes in our other pending and planned lawsuits.”
The stipulated final judgments and permanent injunctions by Judge Lee H. Rosenthal of the Southern District of Texas and Judge Jane J. Boyle of the Northern District of Texas, respectively, permanently ban defendants from engaging in any activities in any way related to the bulk purchase, unlocking or resale of T-Mobile USA phones and from using the T-Mobile USA trademark. If violations of injunctions occur, the orders provide a mechanism for enforcement by the courts and, in the case of Fone Xchange, carry a minimum charge of $1 million in damages to be paid to T-Mobile USA.
T-Mobile USA said Muhammad Mubishir, a defendant who violated a similar injunction in Houston federal court, recently pled guilty to criminal contempt of court and is scheduled to be sentenced by U.S. District Court Judge Melinda Harmon on Oct. 10.
T-Mobile USA said it is pursing six additional lawsuits in federal courts around the country.
TracFone Wireless Inc., the Miami-based prepaid wireless leader, has taken the lead in combating trafficking by filing scores of lawsuits and cooperating with law enforcement across the country in recent years.
However, the prepaid cellphone trafficking scourge has not been limited to TracFone. Major wireless carriers and handset vendors also have turned to the courts in hopes of stamping out an illegal market whose size and reach appear to be far more extensive than initially realized.