Former T-Mobile Store Owner Scores Long Prison Sentence For $25M Phone Unlock Hack

former t mobile store owner prison sentence phone unlock hack news
An investigation conducted by the Secret Service’s Cyber Fraud Task Force (CFTF) and Internal Revenue Service - Criminal Investigation (IRS-CI) has resulted in the arrest and conviction of a former T-Mobile employee by the name of Argishti Khudaverdyan. Now 44 years old, Khudaverdyan used stolen T-Mobile credentials to operate an illegal phone unlocking and unblocking scheme between August 2014 and June 2019. According to the US Department of Justice (DOJ), this criminal operation netted Khudaverdyan more than $25 million.

T-Mobile, as well as other US phone carriers, offers its customers phones as part of their service contracts. These phones are usually locked to the carrier, meaning customers can’t switch these devices to different service providers unless the contracts include unlocking provisions. Beyond locking and unlocking devices, carriers can also block phones from their networks as a consumer protection measure in the case of devices reported as lost or stolen.

For almost five years, Khudaverdyan provided what he claimed was an “official” T-Mobile unlocking and unblocking service that functioned as a means for criminals to clear stolen devices of carrier-imposed restrictions before selling them. He offered this service through various brokers, email solicitations, and websites with the help of Alen Gharehbagloo, who pleaded guilty to three felonies and is currently awaiting his sentencing hearing on Feburary 13, 2023. Together, they unlocked and unblocked hundreds of thousands of mobile devices.

Khudaverdyan was able to successfully lift these carrier restrictions on behalf of his clients by accessing T-Mobile’s internal systems with stolen login credentials. During his time running this scheme, he stole the login credentials of more than fifty different T-Mobile employees spread across the United States. Khudaverdyan leveraged social engineering tactics, including phishing emails, to trick T-Mobile employees into giving away their login credentials.

In January 2017, over two years after the illegal scheme began, Khudaverdyan and Gharehbagloo became the co-owners of Top Tier Solutions Inc., a T-Mobile store located in a Los Angeles mall called Eagle Rock Plaza. However, this stint at T-Mobile didn’t last long, as the company fired Khudaverdyan just six month later on account of suspicious behavior and affiliation with unauthorized phone unlocking. Nonetheless, his unlocking and unblocking scheme continued for two more years, with Khudaverdyan managing to remove carrier restrictions on devices serviced by carriers beyond just T-Mobile, including Sprint and AT&T.

According to the DOJ, prosecutors described Khudaverdyan as “a sophisticated fraudster with no remorse for his crimes. He personally caused millions of dollars in losses to wireless carriers while furthering the trafficking of lost and stolen cell phones.” On August 1, a federal jury found Khudaverdyan guilty of fourteen felonies, and he is now facing ten years in federal prison for his crimes, as well as an order to cough up $28,473,535 in restitution.