Feds bust worldwide identity theft, phone ring in Minnesota
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Federal officials said Tuesday 20 members of a Twin Cities-based family have been indicted for using "thousands of stolen identities" to steal cell phones and other technology and then resell them across the globe.
According to the indictment filed yesterday in U.S. District Court, Jamal Mustafa, 42, directed members of the group to open mobile accounts under stolen identities in order to obtain new phones at discounted prices. Members of the organization called 'runners' also stole phones through burglaries and robberies. Authorities allege the ill-gotten phones were resold for a profit in 13 wireless stores throughout the Twin Cities owned and operated by members of the Mustafa family.
Authorities say the alleged thefts and resales took place over several years, beginning in 2006 until this year.
U.S. Attorney Andy Luger called it "one of the largest criminal enterprises in the Twin Cities."
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He didn't offer an overall tally of how much the Mustafas made from stolen phones but estimated the proceeds to be in the millions.
"For example, one runner we interviewed told investigators he stole 9,000 phones for the Mustafa family," he told reporters Tuesday. "That one runner probably earned the Mustafas around $3 million alone."
Luger said the alleged conspiracy to steal or otherwise illegally obtain cell phones and other mobile devices arose as the numbers of cell phone thefts in the Twin Cities spiked.
Lugar said he's not sure if the members of this organization had a major role in that uptick.
"One of the reasons we wanted to get these phones in one location and do an analysis of them is that will give us information to help determine how many of these were stolen, where might they have been stolen from - if there was a report."
According to the indictment, runners were also sent to states like Utah, Arizona and Idaho to obtain the phones and mobile devices. One runner arrested in Utah was found with 80 counterfeit and real victim identification documents. Authorities believe similar documents were used to open lines of credit to purchase phones. Sometimes the runners could buy phones under two-year contracts for around $200. The phones allegedly could be resold for more than twice as much from the Mustafas' stores.
The phones were likely sold at even higher profits overseas, where a "new iPhone 5s retails for between $1,000 and $1,200," a statement from the Minnesota U.S. Attorney's office said.
Luger said the Mustafa family made the travel arrangements for runners and paid for their expenses.
Authorities also believe the Mustafas are tied to a burglary ring called the Sunrise Group that allegedly broke into Walmart stores to steal merchandise for the family to fence. The devices included "cell phones, iPads, and other electronic devices, provided electronic devices to the Mustafa Family on several occasions," according to a statement from the U.S. Attorney's office.
The effort to bust the ring involved members of local, state and federal law enforcement authorities. Luger estimated around 300 law enforcement personnel were involved. The stores where the devices were allegedly sold are practically shut down for now because the owners and operators were arrested and their inventory seized, said a U.S. Attorney's Office spokesperson.
MPR News was unable to reach Jamal Mustafa for comment. According to court records, federal defender Reggie Aligada was assigned to Mustafa's case. The Associated Press reports Aligada declined to comment because he expected Mustafa to get a new attorney. Mustafa is scheduled to make another court appearance later this week
