Police Make Multiple Arrests Over iPhone Scam

Police have made nine arrests in connection with a complex fraud scam that involved the use of stolen Apple iPhones and premium rate telephone numbers.

Eight men and one woman were arrested during dawn raids, according to the Press Association. It seems that the City of London Police led the raids on homes in Forest Gate and Southall in London, Walsall in central Birmingham and Middlesbrough.

Mobile phones worth approximately £15,000, as well as hundreds of SIM cards, computers, documentation, stolen bank cards, several fake passports and cash have been seized.

How The Scam Worked

According to a statement from the City of London Police, which is the lead national force for fraud, detectives began working with mobile operator O2 after it noticed customers’ phone lines running up huge bills.

“A nationwide investigation uncovered an elaborate and expansive fraud that began with an organised crime gang utilising fake identities and counterfeit accounts to buy phones operating on the O2 network,” said the police.

It seems that the gang purchased the phones in High Street stores and online before giving them to the mastermind of the whole operation.

SIM cards from the phones were then shipped abroad and used to call international premium line telephone numbers, some costing up to £10 a minute. The scam was these premium lines had been set-up by the same criminal gang.

According to the PA report, O2 lost £1.2 million in July alone because of the fraud which was ongoing for five months. O2 was hit because some overseas telecom regulations state that UK service providers must pay the overseas providers of a phone service, before they receive money from its own customers.

O2 therefore settled these bills before it tried and failed to recoup payment from the supposed customers.

Nice Little Earner

The gang therefore gained two forms of revenues for their criminal activity. One they got paid for the lengthy calls to premium rate lines, and two, they still had a lot of expensive iPhones to sell on.

The police believe a gang of West African fraudsters bought the iPhones and contracts from high street stores using fake credit cards and false identities. Reportedly up to 1,000 iPhones were used.

“Today we have struck at the very heart of a complex criminal network that has been targeting the telecommunications industry to steal millions of pounds,” said Detective Superintendent Bob Wishart, from the City of London Police. “Our investigation found a crime gathering momentum. Each month, more SIM cards were being used to make more phone calls to premium rate lines at more expense to the network provider.”

“The criminal exploitation of the latest consumer technology is a recurring theme of our work,” he added. “Our collaboration with O2 on this investigation highlights the benefits of how the private sector can work with the police to proactively target common threats to our communities.”

“This was a sophisticated and organised attempt to defraud mobile phone operators,” said Adrian Goreham, O2’s General Manager Fraud & Security. “We are extremely pleased that our own investigation and the information we have shared with the City of London Police has resulted in these arrests”.