WASHINGTON—U.S. officials in Michigan said their probe of large prepaid cell phone purchases will not end as a result of a federal magistrate’s decision to throw out conspiracy and money laundering charges against three Texas men. The men originally faced terrorism charges, which were subsequently replaced with conspiracy and money laundering charges.
“We respect the court’s decision and will continue to investigate,” said Gina Balaya, a spokeswoman for the U.S. attorney in Detroit.
A Florida lawyer involved in prepaid cell phone hacking suits said other federal investigations on the issue are underway. He said U.S. attorneys around the country may choose in the future to present evidence to grand juries rather than going to U.S. magistrates in the aftermath of Tuesday’s ruling in Bay City, Mich.
At a preliminary hearing on the government’s case in Michigan, U.S. Magistrate Judge Charles E. Binder yesterday dismissed conspiracy and money laundering charges against brothers Louai Othman, 23, and Adham Othamn, 21, and cousin Maruan Muhareb, 18, for lack of probable cause, according to Balaya.
The three Texas men were initially arrested in mid-August after attempting to buy about 80 handsets early in the morning at a 24-hour Wal-Mart store. Police found approximately 1,000 handsets in the men’s van and pictures of the five-mile long Mackinac Bridge that spans the states upper and lower peninsulas.
The government first issued terrorism charges against the men, but then accused them of defrauding customers and money laundering. The phones were manufactured by Nokia Corp. and marketed by TracFone Wireless Inc.
Prepaid cell phones have been linked to criminal and terrorist activity because they are easily accessible and hard to trace back to buyers and users. Prepaid phones are used by terrorists both to communicate and to detonate bombs.
TracFone, headquartered in Miami and the largest U.S. independent prepaid mobile phone company, has been aggressively litigating against individuals and small firms accused of disabling TracFone’s proprietary software—enabling customers to access TracFone’s prepaid wireless service—and then reselling the phones as new for operation on other wireless carriers’ networks.
TracFone filed such a suit against Sol Wireless Group Inc., its president, Carlos Pino, and Vice President Jorge Romero last December. Sol Wireless agreed to a settlement last February. In a similar case, TracFone was awarded a permanent injunction against Pan Ocean Communications Inc., company President Samar Munir and Vice President Syed Hussain in early August.
TracFone filed a new prepaid phone hacking lawsuit in late August against several individuals in a Florida federal court.
