Black Market of Stolen Cellphones: How to Protect Yourself

Mike Perlstein talks about how to prevent becoming a victim of cellphone theft and what to do if you are.

They're small. They're portable. They cost hundreds of dollars and may contain your most personal information. With the price tag on smart phones in the hundreds of dollars, it's no wonder that these easily concealed devices have become a hot target for criminals.

Following the trends in the rest of the country, dozens of cell phones are stolen every month in New Orleans. The New Orleans Police Department’s major offense logs for April show that phones were taken at gunpoint 18 times during the month.

Take just one night last week: Out of the four robberies reported by the NOPD during the night of May 9 and 10, cell phones were taken in three of them.

One phone was taken by a robber who put a gun to the victim's chin. Another was snatched as it was being used by a victim to take pictures after a car smashed into her, an accident that appears to have been staged to pull off the robbery.

Other phones are stolen in less dramatic fashion. Picked from a back pocket. Snatched when somebody leaves it on a bar stool. In one crime caught on a security camera, Channel 4 reporter Jacqueline Quynh almost lost her phone recently to a young would-be thief on a bicycle.

“Committing the robberies or breaking in houses, it doesn’t matter,” said one former street hustler as he held up a smart phone. “But they know one thing: this here is valuable. This is money.”

Mike Melito, owner of UBreakIFix repair shop, said cell phones make for an obvious and easy target for bad guys.

“When people walk around basically unprotected with their phone in their back pocket, a thief is going to go and grab it,” said Mike Melito, owner of UBreakIFix repair shop.

Melito said a phone probably changes hands within an hour of being stolen and hitting the black market. Our WWL-TV undercover investigation showed that some of these phones are bought – with no questions asked – at phone repair shops that have popped up throughout the metro area. Some are housed in convenience stores and gas stations. One busy location sits inside of a clothing retailer.

To test how easy it is to sell phones in this underground market, WWL-TV outfitted a street source with a hidden camera to sell phones at several New Orleans locations.

Four phones were snapped up, no questions asked. An iPhone fetched $25, while an outdated Android model sold for $3.

So what happens if your smart phone goes missing? Experts say you should first try to locate it using an app, either Find My iPhone for Apple products or Device Manager for Android.

However, if your device has fallen into the wrong hands, there's a good chance it's been disabled and left untraceable.

Many technologically savvy crooks know how to quickly remove a phone SIM card., the subscriber identification module. Removing it disconnects the phone from cell towers and the Internet, making it impossible for police to track the device.

“The main thing for the criminal is to get in, disarm it, and take it to sell it,” our street source said.

Lt. Chris Hart, commander of the NOPD’s elite anti-robbery squad, the TIGER unit, said if more than a day has passed, tracking a phone usually leads to a dead end.

“If you try to track them, a lot of times they're turned off and we just have no idea what's going on with them, Hart said.

If a thief sells a stolen phone to a unscrupulous phone repair shop, the shop’s next move is to unlock the phone by getting around the password. That enables the shop to jailbreak the phone, writing over the operating system so it can be used again.

Many phone shops advertise these services, both of which can be accomplished with the right computer software.

“When you see those signs – we buy phones and we jailbreak phones – that advertisement should be a flying red flag for law enforcement,” Melito said.

With no regulations prohibiting these services, the law is several steps behind the underground market. This allow criminals to re-sell the phone and even steal a victim’s personal information.

“As time goes on, the criminals learn, so it's harder and harder to track cell phones when they're taken in a crime,” Hart said.

In fact, eBay and Craig's List offer thousands of unlocked, jailbroken phones for sale. Buyer beware, because a percentage of those turn out to have been stolen.

“Once it's broken, that device is in the hands of someone who can really hurt you. Take all your identity. Sell the device. And you're in big trouble,” Melito said.

Experts recommend a few basic steps to protect yourself in case your phone is either lost or stolen. First call your network carrier. They will put the phone on a nationwide blacklist, flagging it if anyone tries to re-activate it.

“That's what a blacklist means, that your device has been stolen, it's been lifted,” said Nick Wakileh, co-owner of iSupply, a phone repair store with branches in Metairie and Slidell.

Next, call the police to report it missing. A victim should provide a phone's unique identification code, known as the IMEI number.  On iPhones, the IMEI can be found stamped in small print on the back. For all other phones, just dial *#06# and the number pops up on the screen.

Once a phone is blacklisted, it cannot be re-activated by any phone carrier operating in the U.S.

“But you can still use it in every other country in the world,” Wakileh said.

And that's just where this underground pipeline leads.

“They send them into other countries. And a lot of our people that are down here, foreigners, are purchasing these phones, left and right,” our street source said.

“It's an organized crime ring,” Melito said. “Absolutely is. And it's big business.”

Wakileh, our expert from iSupply, said there is another common sense tactic you should take with your phone.

“Be more careful,” he said. “If you go to a restaurant, don't leave it on the table. If you go the bathroom, don't need to put it on the sink. If you're out in public, it's in your front pocket where it's tough to get out.”

In other words, treat your phone as if it were a stack of one hundred dollar bills, the amount of money you will probably have to pay to replace it.

© 2017 WWL-TV


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