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AT&T has filed suit against former employees alleged to have been paid tens of thousands of dollars to install malware on company computers to help “hundreds of thousands” of AT&T customers unlock their smartphones without permission.

California-based Swift Unlocks, which allegedly orchestrated the scheme and in turn sold the illicit unlocking services to AT&T customers, is also being sued.

The unlocking of smartphones has been a hotly debated issue as the Federal Communications Commission has introduced new rules over the past few years. Most carriers, including AT&T, often sell phones at discounted rates because they know they can recoup that money by selling their own wireless services for the devices. To make sure customers stay long enough to pay back the phone subsidy, carriers install locking software that won’t allow phones to work on other carriers’ networks. Once you’ve paid off your wireless contract, the FCC now requires carriers to give customers an unlock code that will allow them to take their device to another wireless provider — if they so choose.

AT&T’s suit says Swift Unlocks, based in Anaheim, Calif., was using employees inside AT&T’s customer service center in Bothell, Wash., to secretly obtain unlock codes for devices that were still under contract, which means the carrier had no obligation to release them to competing carriers. An AT&T spokesperson tells GeekWire there was no improper access to private customer information.

There are multiple websites that sell these kinds of services under the Swift Unlocks moniker, including swiftunlocks.com. It offers to unlock AT&T devices, from Apple’s iPhone to Amazon’s Fire Phone, for between $10 and $50. On the company’s website, it describes why someone would want to unlock a phone, saying it can make switching SIM cards for international travel easier, allows you to fetch a higher price when reselling your phone and makes it possible to switch carriers to take advantage of promotions.

swiftunlocks.comA&T’s lawsuit was filed this week in federal court in Seattle. The carrier names Kyra Evans, Nguyen Lam and Marc Sapatin as former customer call center employees who knowingly installed malware on company computers  to give Prashan Vira, who runs Swift Unlocks, remote access to the machines. Vira, and about 50 others who haven’t been identified yet, are then accused of running programs designed to use the employees’ credentials to access the unlock codes.

Sapatin is accused of trying to recruit another AT&T employee to join the scheme, telling the worker all she needed to do was click a link provided by someone else to download the malware. The program would then run invisibly on her computer, and she would get paid $2,000 every two weeks, according to the lawsuit.

The suit alleges that the scheme allowed Swift Unlocks to secretly obtain access to “hundreds of thousands” of unlock codes until AT&T discovered the malware around October 2013. By that point, Sapatin allegedly had been paid $10,500 for his part, while Evans allegedly made at least $20,000. The suit says AT&T believes Lam took a job at the company just to be part of the scheme.

No one accused in the suit still works for AT&T, but swiftunlocks.com was still live as of Friday morning. According to the court filing, Sapatin told the worker he was trying to recruit that there were “many people across the country” involved in the scheme, accessing codes from AT&T and other carriers.

While most of swiftunlocks.com’s website is dedicated to AT&T phones, it does offer unlock services for some T-Mobile and Verizon devices.

On the FAQ portion of the site, the company tells its customers that using its service it’s legal. The company also says it can handle phones that are marked as lost, stolen or blacklisted, but they will only work outside the U.S.

Swift Unlocks has not responded to GeekWire’s request for comment, and we have not yet been able to reach the three former employees for comment.

UPDATE: An AT&T spokesperson offered the following statement: “We’re seeking damages and injunctive relief from several people who engaged in a scheme a couple of years ago to illegally unlock wireless telephones used on our network. It’s important to note that this did not involve any improper access of customer information, or any adverse effect on our customers.”

AT&T Unlocking Lawsuit

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