More Sprint-related links on fraud

Thought I'd put together a collection of links associated to the fraud I was talking about. If anyone from Sprint corporate who reads this wants to see where some of my information comes from, have at it.

http://fraud.laws.com/cellular-phone-fraud/criminality
http://www.vosizneias.com/4263/2006/07/09/brooklyn-ny-cell-phone-chain-owner/
http://www.nypost.com/p/news/regional/item_jgAx2mJJR1syZb1nxWyEHN
http://www.brooklynpaper.com/stories/29/27/29_27island.html


The group mentioned in the 3rd link were most likely part of the same Brooklyn based fraud ring that plagued Sprint during the same time period as I have previously discussed.

This is the copy of the indictment.

While AT&T and T-Mobile sought to pursue charges and cooperate with authorities, there is no mention of Sprint which was hit often and repeatedly.

How Sprint loses millions monthly (Part 5 Chillul Hashem)

In today’s installment of the continuing story about Sprint and the ongoing revenue loss, we’ll look at the most recent information I have dug up on the internet and through my sources both at Sprint and from the Brooklyn community. One of the scams worked with data cards where people paid a dealer a onetime “fee” of $150 to $400 per data line and the customer supposedly would never have to pay Sprint a dime. One was a dealer in Lakewood, NJ and as I recall, he may go by the name of “Shlomo”. 

I was not able to dig up much information on him but I did find information on a store in Brooklyn, later determined to be known as “Cellular 4 Less”. There are a number of other stores across the country with the same name and I should make it clear that those are not connected to this bunch in any way that I know of. Here are a few snippets of what I found.

This was written on 4/23/2009 on a website discussion: “There is a new deal out of Boro Park. One time fee of $200 up front for 1000 minutes and unlimited text. Your monthly bill will be $2.50 a month. Must have pre-existing phone. For internet and Blackberry service more money is required up front but the monthly fee stays the same. If upgrading a plan in middle of contract it continues where its at does not start a new 2 year contract. I want to know if any one used him and their satisfaction level is. The name of the store is Click 4 Cell. It is exclusively for Sprint I think.”

I was not able to find much information on “Click 4 Cell” other than it was one of the apparently dozens of small shops in the area that seemed to be part of the “scam Sprint” conspiracy as they like to refer to it as. As for the plan mentioned before, this was the infamous “JC Plan”, discussed heavily on sites like Sprintusers.com and it was one of the glitches possibly designed and/or released by the terminated employee of Amdocs, the company that manages Sprint’s billing system. Sprint caught this within days and suspended access to the code, but not before it was placed on hundreds of lines. Many of these ended up a couple of accounts where the owners turned around and sold the phones and plan to others for hundreds of dollars a pop. Some customers were contacted and told they had to change but many managed to once again, slip through the cracks.

When the issue of Sprint catching on to this game and forcing changes came up, another poster wrote: “i spoke to a dealer who said he set up many plans and even when sprint sent out those letters the last two times, they never followed up on it. They sent letters out but never canceled anyone's plans.”

This was partially because Sprint’s account services department sabotaged the effort to cancel people or automatically change their plans in order to keep lines from going off the books. The letter told these customers that they had a set number of days to change the plan or terminate their service. If they did not contact Sprint, Sprint planned to change all lines to new plans by running a program that would accomplish that. However, some of the people assigned to the project suspiciously got reassigned before anything could be done, thereby nullifying months of research and planning.

Here’s a quote from a person who got caught. In this case, the plans had already been locked down so there was no real way for them to revert back once Sprint’s Executive Services department forced a change: “I got one of these plans, after six months sprint told me my rate was not available and they bumped up to $60 bucks a month instead of ten. Now Im stuck with $60 a month or $200 termination fee and I lost my upfront money that I paid to guy next to shomer shabbos. They said they can fix it for $150 but they are not guaranteeing how long it will last”. 

Shomer Shabbos is a 24 hr synagogue at 53^rd and 13^th streets in Borough Park in Brooklyn. There is a store called “Cellular 4 Less” which is at 5308 13^th Street which is between 53^rd and 54^th Streets, right next to Somer Shabbos. In this New York Times article, it identifies both the owner (Mendy Handler) and the manager of the store (Sol Oberlander).

Mendy Handler is listed as the point of contact for Congregation Koson http://www.charityblossom.org/nonprofit/cong-koson-brooklyn-ny-11219-mendy-handler-113576639/, just blocks away from the store.

A lot of the larger accounts setup with Sprint that were hugely unprofitable and manipulated were under the names of yeshivas and other non-profit groups, as well as businesses which seemed to exist only on paper. It is not known if these establishments were aware of and/or profiting from these scams but the preceding information seems to hint that at least some of them were.

Strange how these people have no issue with scamming Sprint as well as possibly members of their own community who may or may not know what they are doing is certainly a Chillul Hashem and possibly illegal.

Sprint terminates customers again?

Picked this one up over on another site. This is a letter that has apparently gone out, as mentioned before, to customers who were gaming the system. Good for you Sprint, it's about 'effing time.

How Sprint loses millions monthly (Part 4)

Here is a link to Sprintusers.com showing that perhaps Sprint is pulling it's head out of it's ass and terminating customers who are cheating their billing system. But, if this is anything like the countless other times Sprint has tried to force customers who were cheating the system to fly right or terminate service, they'll manage to find a way to shoot themselves in the foot with bad PR. That is one possibility or they'll end up with the same people in account services finding a way, yet again, to keep these people on the books at a net loss.

While I fully support Sprint's actions on trying, again, to clean house, I believe that they need to come forward and explain to the press the background on this. As I have previously mentioned, not only were Sprint employees involved but indirect dealers as well. In the case shown in the Sprintusers.com thread, the plan in question was one that was heavily abused by dealers like Big Time Cellular in Brooklyn who went so far as to advertise their deals in the local circulars and web announcements. I have attached three different sets of pages as evidence.
Example 1: http://www.crownheights.info/index.php?catid=35&startpos=161
Example 2: http://www.crownheights.info/index.php?catid=35&startpos=46
Example 3: http://www.crownheights.info/index.php?itemid=4087

Research shows that this fake dealer sold this "deal" to people all over the country but mostly in the New York metro area. These were mostly other Orthodox Jews who they apparently had no qualms about leaving to hold the bag when Sprint finally caught on. This was a "Chillul Hashem" in the truest sense of the word.

I'll continue posting more about this as information comes in. Stay tuned.

How Sprint loses millions monthly (Part 2)

Details were left out last time, partly because I didn’t know if I would bore the audience with technical details and also because I didn’t know that the article would become as popular as it is.

As I said before, there were a number of groups who stood to gain from the con job and Sprint’s response to it was anemic, woeful and blundering. That could be said for Sprint’s overall decision making, highlighted by the disastrous merger with Nextel in 2005. This situation was no exception to the rule. Sprint’s fraud/corporate security department did try valiantly to stem the flood of fake businesses and manipulated accounts but the problem was more complex and far reaching than they could handle. They also had very limited knowledge of how the billing system worked, especially when it came to which plan codes went with what plan. This was the major way in which the fraudsters were making their money, because they knew every loophole thanks to the employees who helped them.

So many times when legal closed down one account, it would be either reinstated by customer service or account services (also known as retention), or it would simply re-emerge under a new name and tax id, often within a matter of a few hours or a couple days. It’s almost funny how a communications company lacked the very thing it sold, communication. No department knew the policies and procedures of others and most of the time; they were working against each other to achieve different goals. If you’ve ever called the company and got 4 different answers from 4 different representatives on the same question, that is the reason why.

Many of these accounts were set up by dealers in the greater New York area and targeted the large Orthodox Jewish community. Places like Big Time Cellular, Big Man Cellular, Big Time Wireless and others weren’t even authorized Sprint dealers but they advertised themselves as such and used a group of “master dealers” to place their orders for them. One of these “master dealers” was believed to be a group called “Cellular Networks” which was terminated by Sprint’s fraud department in November of 2007 for creating fictitious accounts and commission fraud among other things. One of their known players was a man named Mendel Mendelovits, who also operates two other businesses, Sellnet LLC and collectaphone.com which touts itself as a cellphone recycling group which donates a portion of proceeds to charities. Some of these charities listed have the same business listing as the fake accounts used in their scheme.

Dealers would also use other ways to boost their commissions, such as collecting personal info from across the country, and then use that to create new accounts with bare minimum plans which would eventually be turned off by Sprint’s collections department, but not before the time period had passed to where the dealers could collect their activation fees from Sprint. One victim of their method was a mentally disabled man who could not even use the phone and sometimes, the person whose information was used was recently deceased. It was never determined if these dealers were loosely affiliated or if they were part of a well organized group but their methods of operation were nearly identical. It is also believed that information collected from their legitimate customers was also used sometimes for identity theft. When attempts were made to find and contact the account holder, they were often unaware that they even had Sprint service. The users usually didn’t even know what name their phones were listed on, a dead giveaway for the fraud department that resale fraud was going on. 

 People like Mendel and other dealers had no qualms about scamming members of their own community and when Sprint would terminate an account or force them to correct the price plan, the customer, not the dealer would be left holding the bag so to speak. In fact, they even involved Chabad Lubavitch and other Jewish charities, community centers and businesses in their scheme. Whether Chabad Lubavitch and others were victims or a coconspirators was never fully determined but either way this was a major “Chillul Hashem” http://en.wikipedia.org/wiki/Chillul_Hashem

They even advertised their “special rates” in synagogues, community centers and local flyers or websites even though the storefronts were not authorized by Sprint to sell their services. Here is one example of an unauthorized dealer advertising one of their “deals” on a community board. http://www.crownheights.info/index.php?itemid=4087 While not one of the biggest money drains to Sprint, this was the plan often sold to individual accounts that did not need the unlimited plans were setup more for the fake businesses.

Some of the accounts were setup for individuals in their own names but they would have to pay the dealers a bribe of sorts to set up these super cheap plans.  It was estimated that most of the accounts with ten lines or less belonged to actual individuals but most of the larger accounts were connected to businesses that only existed on paper. Customers were also setup with large corporate discounts for which they were not entitled. It was a running joke at Sprint that every Jewish person in the New York area with Sprint service worked for JP Morgan, Waste Management or UPS, three companies that got the highest discount percentage from Sprint. These accounts were also not confined to the NY area. Research found that linked accounts were also present in Los Angeles, Chicago, Miami and anywhere else there were large Jewish communities. Often phones would be used to resell service to people who thought they were “renting phones”. (Reference removed)

One of the single most costly loopholes was a $15 feature that was originally designed just for specific plans and only for major corporate customers. It allowed for minutes to be used calling to or from Canada. Many fake accounts used this feature to create rental phone lines with unlimited Canada calling. There was a separate scheme where this abuse and improper setup of a plan ended up costing Sprint $1.2 million monthly on just two accounts which turned out to be used to resell service to truckers who made frequent runs from Northeast US into Canada. Fortunately, a quick decision (a matter of months versus years) was made to terminate these accounts once evidence of what was happening came to light. This was because the VP (Jim Curran) overseeing the problem was not concerned with keeping such a damaging client on the books at whatever cost it took. Then again, when credits amounting to the hundreds of thousands have to be applied monthly, eventually someone high up enough on the food chain will take notice, maybe even start demanding answers or investigation.  If this had been the account services department, it is likely that it would still be active today.

Sprint’s account services department made their commission by “saving” accounts that would potentially cancel and in the turmoil surrounding the aftermath of the Nextel merger; they did serve to keep the flood of customers leaving from becoming a full scale tsunami that would have probably decimated the company. However, supervisors and employees were also engaged in fake “saves” which padded their commission checks and they were often found to be helping these same dealers maintain and expand the very accounts that cost Sprint millions of dollars a month. One supervisor in Sprint’s Orlando callcenter who was later promoted to management, Charles H. was found on a number of occasions to be manually adjusting the credit class of these accounts to allow them to add even more lines. His group of employees, no matter how many times he added or lost members of his team, continually ranked highest in their callcenter on “saves” and when this evidence was brought to the attention of management by the fraud department, they would simply refuse to terminate the parties involved. Dozens of employees made many thousands of dollars for basically screwing their own company over and this was known all the way up the chain of command, including their own VP, John Battaglia. In fact, it was rumored that the both the person in charge of overseeing fraud investigations at the Orlando center April L, as well as their assistant site director Andrew had both been previously caught stealing from the company and allowed to remain, even promoted after the fact.

Orlando was not the only site involved in this but since they were the center that handled business and corporate accounts, they were the prime group involved with assisting the Brooklyn dealers. With their knowledge of corporate accounts and discount structures, they were the perfect people to assist these dealers not only with manipulating services but also add massive volume discounts to these same phone accounts which were already paying mere pennies on the dollar for services they were reselling at huge profits. Employees who found and reported instances of fraud or refused to cooperate with the fraud ring’s scheme were harassed into resigning, turned down for promotions and even written up for giving information to or cooperating with the fraud and legal division in Kansas City on these accounts.

In 2008, a serious attempt was made to identify and terminate almost a thousand of the largest accounts but the effort was hampered by protests from John Battaglia and other managers in the retention department who were afraid that removing these accounts would hurt the “Churn” numbers that they had put up. When Sprint began sending out certified letters informing people that the phone lines would be terminated or corrected, very few people actually called to correct the issue. Most just ignored the letters and accounts that were terminated would be turned back on almost immediately by the retention department and marked as “saved”. Every attempt that was made to stop the problem would be meet with resistance from account services, often from the VP level. Eventually the effort was basically abandoned due to lack of support and the stonewalled resistance from account services.

It is not known outside of Sprint and the ring of dealers how many accounts are still active and if this problem continues today. It is reasonable to assume due to much of the same management team and commission incentives still being in place that they are.

*DISCLAIMER* This is a blog and the personal experiences of the author thereof. The author is no longer employed by Sprint or any of it's contractors, vendors or shady dealers.

How Sprint loses millions monthly

Between 2005 and present day, Sprint lost (and probably continues to lose) between $6 and $12 million monthly in revenue due to a number of organized fraud rings out of the New York area that involves indirect authorized and unauthorized Sprint dealers, Sprint contractors as well as Sprint employees and management.

This was accomplished in a number of ways but the base of it all was exploitation of Sprint’s notoriously unreliable billing system to create large but completely unprofitable accounts. In fact, these supposed customers actually cost Sprint millions of dollars monthly in roaming fees, workforce hours spent handling the constant calls from the dealers and invalid commissions paid to staff who profited from keeping these accounts on the books. 

The way this came to be is that back in the early 2000’s, Sprint launched an unlimited plan when the customer subscribed to Sprint’s Complete Sense plan which bundled home service as well as cellular. Originally, the plan was supposed to be either $130 for the first line and $100 for each additional line, or $95 for the first line and $75 for each additional line, depending on where the customer was among other criteria such as limit of 5 lines total on the plan per account. Things like text messaging, data, roaming were not included in this deal which was revolutionary for its time. Through a series of loopholes in the system which were identified but suspiciously never completely fixed, the dealers and their group of associates found a way to add hundreds of lines at prices as low as a few cents to one main line. A brief explanation of how this worked is as follows. On every phone line in the billing system, there are a series of plan codes, usually referred to inside Sprint as “SOCs” (Service Offering Codes) which dictated whether lines could share with other lines as well as every single service involved with cellular usage. Put the wrong SOC on the wrong line and you could create a billing nightmare requiring hours of research, corrections and sometimes, hundreds of thousands of dollars worth of credits that would have to be applied by someone at the VP level. Or, if you knew that if you swapped an improper code in on each line, you could potentially create a 100 line account that paid perhaps as little as 10 to 15% of what a customer should normally pay.

There were literally hundreds of these accounts that the group controlled personally as well as tens of thousands more that they either set up or were put together by unscrupulous or careless Sprint employees. The way that they made so much money off all of these accounts was to target people with poor or no credit as well as members of their own community with promises of cheap service. First they would demand a deposit on service or account “setup” fees and sell the customer a previously used phone. After ordering the line with a normal plan code and a brand new phone (usually a high end PDA with worldwide roaming capability, they would call Sprint or get in touch with one of their contacts on the inside and get the plan code to be changed to yet another free or $10 code. Upon delivery of the new phone, they would swap out the used phone to the line, and then sell the new phone out of their shop or on Ebay/Craigslist. In fact, it is believed that a cell phone “recycling” charity in the Spring Valley, NY area actually uses the phones donated to them to sell back to customers on these accounts. The same person operating this charity was also listed as an owner on a cellular dealer group terminated by Sprint for fraud in 2007.

This fleecing was so blatant that the unauthorized dealers advertised themselves as Sprint dealers and promoted their “deals” in local flyers and community papers. By the time the loopholes were partially fixed in 2008-2009, Sprint was missing between 6 to 12 million dollars a month in lost potential revenue. However, the problem was never completely repaired and Sprint decided to only half-heartedly identify and terminate problem accounts. Instead of sending payments to Sprint, thousands of customers would pay monthly to the dealers, who in turn paid Sprint as little as 10% of the money they had taken in. They weren’t just making massive profits off cell phone services; wireless internet cards were quite popular. These were cards that should have come with a minimum $59 monthly fee but usually their cost was less than $10, thanks to the same plan code exploitation. Many worldwide phones were also rented out to customers who were traveling internationally and the dealers could charge that person one rate but pay Sprint next to nothing on the invoice due to codes that had been manipulated in the billing system.

In addition to the lost revenue from service and preventable monetary adjustments, Sprint and their customers  were losing probably close to a million or more a month in cell phones that were either fraudulently obtained or ordered for next to free lines that Sprint would never make any money on. It was also a daily occurrence for corporate and small business accounts like FedEx, DirectTV, UPS or ADT (now Broadview) to be targeted by callers pretending to be the owners or authorized users of the accounts who would then order brand new cell phones which would be shipped to a number of addresses around the country but mostly to addresses in and around the Tri-state area. The most notorious address was 544 Park Avenue in Brooklyn as well as other dead addresses which only led Sprint to believe that UPS delivery drivers were also in on the deal.

Under most circumstances, a scheme like this would have been rapidly sniffed out but it took literally years for Sprint’s multiple departments to shut down, or at least stem the bleeding that occurred from this scam. Part of it was poor communication amongst various departments but a major piece of it was a combination of incompetence and actual collusion with the group from New York by Sprint’s own employees. Sprint’s fraud department would terminate 3^rd party dealers who they could prove were committing outright “resale misconduct” (the approved term by Sprint’s legal division) but they had a much harder time fighting a well organized group of fake storefront owners and accounts with addresses that eventually traced back to storage units and abandoned warehouses. They also had to deal with a faction of Sprint workers that were determined to keep these accounts on the books, no matter what the cost to the company. These employees often undid the work that the fraud and legal departments had spent months on. Problem accounts would be identified with special notes by legal which would be promptly removed by those who wanted to ensure their survival. Some accounts would be instantly terminated or suspended when evidence of service resale was found, only to be turned right back on by supervisors determined to make commissions at any costs.

Often when an account would reach a credit class limit which stopped more phone lines from being added to one of these invalid plans, the dealers would simply contact one Sprint supervisor in particular who would manually change the credit class without proper review by the corporate credit review department. Safeguards that had been put in place to make sure customers were credit-worthy and that accounts were profitable were bypassed for the sake of making more commission as well as probable kickbacks. There was a large amount of money that could be made doing this. In addition to base salary, Sprint’s “account retention” department employees could make up to $3,000 monthly extra in bonuses to keep accounts from cancelling. Just marking a couple of the large fake accounts as “saved” each month could max out a rep on bonuses. In one call center, there was at least one team whose supervisor was believed to be in collusion with the ring and his employees almost invariably maxed out every single month on commissions. In fact, it was common knowledge around the entire center but when other reps and their supervisors stumbled across evidence of employee cooperation with the fraud ring and reported it, they were harassed and often denied promotions. It wasn’t just call center employees who were involved, it was also believed that corporate store and back office employees were giving account security information to the fraud ring so that they could then call in and place fraudulent orders for equipment. At a couple call centers, employees had even been approached in the parking lots and offered large sums of cash for their login information, including passwords.

It was often said that the callers “knew our own system better than we do” and that was true because not only did they have the cooperation of customer service agents but also because of the fact that an employee of the company who built billing codes for Sprint was also involved. They were eventually investigated by Sprint’s corporate security department in 2009 and terminated for this. It seemed to be a weird coincidence that as quickly as Sprint’s billing investigations found and closed the abused codes, new ones would be built within hours and quickly distributed. Some were specially designed it seemed, for no other purpose than to be used on these accounts. In fact, it was common for people to call in and ask for code “PDSXXXX” within 24 hours of it being created. It was a billing system game of “whack a mole” with millions of dollars on the line.

In 2007, Sprint finally terminated one major group of dealers that operated out of Brooklyn, New York but new dealers popped up within days to take their place. The original abused codes were mostly shut down and Sprint began moving their accounts from their old, loophole-ridden system known as “P2K” to a new billing system that was used by Nextel prior to the merger in 2005. It was believed that the invalid accounts would be caught in the migration and forced to be corrected due all of the new limitations in the new software. However, as the change began, the problem was not solved. In fact, it exploded due to new plan codes being built in the new billing system in order to accommodate the patch-worked accounts that should have been caught and terminated before the transition over. These new plan codes were then given out to the dealers as fast as they were created and circulated amongst employees who knew how to work the system to maximize their commissions as well as supervisors and managers who had the same intent.

It was no accident that month after month, the same supervisors and managers led their call centers in “account saves” when many of them had a working relationship with a group that was taking the company for millions of dollars monthly. Often, when faced with evidence of employee misconduct by Sprint’s fraud and compliance team, customer service managers and their directors refused to terminate those workers. After all, they were making their numbers look good even though they were essentially paying these representatives to undermine profitability and potentially expose the company to civil or criminal litigation

Eventually, some of the Sprint staff involved was forced to resign or were fired after a report on the issue went all the way to the executive level, but some were just moved to other positions in the company as the company persisted in trying to sweep the whole issue under the rug with minimal outcry. The problem has not been completely fixed as of today, Sprint continues to lose millions monthly, and corporate accounts continue to be the target of various crime rings in search of cell phones to sell on the internet. Employees who blew the whistle and warned upper management of the issue were often harassed, denied promotions or terminated on other grounds in order to ensure silence. As of now, Sprint has not commented publicly on the matter and is not likely to do so.

*DISCLAIMER* This is a blog and the opinion of the author thereof. The author is not employed by Sprint or any of it's contractors, vendors or dealers.