SOURCE: Carlton Fields

March 10, 2008 09:03 ET

TracFone Wireless Awarded $1 Million in Texas Phone Hacker Lawsuit

Company Continuing to File Cases Across the Country to Stop Phone Thieves

DALLAS, TX--(Marketwire - March 10, 2008) - A federal district court issued a $1 million judgment in favor of TracFone Wireless, Inc. against a defendant who participated in an unlawful wireless phone hacking scheme by purchasing bulk quantities of phones to be resold and unlocked. The judgment, handed down on March 5 by U.S. Judge David C. Godbey of the Northern District of Texas, prohibits defendant James Ray Thomas, Jr. (a/k/a Jim Thomas Hollis a/k/a James L. Ford) and his co-conspirators from continuing to engage in the bulk purchase, sale, or unlocking/reflashing of TracFone's wireless phones. TracFone is represented by Carlton Fields Shareholders James B. Baldinger and Steven J. Brodie.

TracFone's lawsuit against Thomas is part of a nationwide effort to stop criminals across the country who steal the subsidies that TracFone provides to make its wireless phones affordable for legitimate customers. Perpetrators like Thomas purchase subsidized TracFone prepaid phones, hack out the software in the phones, and ship them outside the United States where they are resold as new to unsuspecting consumers in other countries for a substantial profit. The scheme makes extensive use of "runners," who circumvent the limitations at retail stores that prohibit sales of more than 2 phones per customer by making purchases at multiple stores, using different cashiers within each store, and sometimes changing their clothing or appearance to deceive store clerks into selling them multiple phones. According to press reports, the FBI has issued alerts suggesting that the proceeds of this conduct are being used to finance terrorist organizations.

TracFone has filed 28 lawsuits against more than 80 defendants in federal courts throughout the country as part of a concerted effort to stamp out this fraud, and to protect TracFone's customers and shareholders, as well as wireless consumers generally, from the effects of this misconduct. The judgment against Thomas is the 12th victory for TracFone in these cases. The other cases remain pending.

Most recently, TracFone has filed suit against Rafiq Wazir-Ali and Skynet Wholesale Distributors, Inc. in the U.S. District Court for the Southern District of Texas; King Trading, Inc. d/b/a King Video in the U.S. District Court for the Northern District of Texas; and Kamlash Rani in the U.S. District Court for the Eastern District of New York. TracFone is engaged in a nationwide effort to identify the perpetrators and bring them to justice, and is working closely with law enforcement authorities. TracFone plans to file many more lawsuits in the coming weeks.

TracFone's victory in Texas is the latest in a string of impressive successes by Carlton Fields lawyers in courts in Florida, California and Georgia, where TracFone has racked up more than a dozen wins in similar cases. For example, on Jan. 8, TracFone obtained a $1 million judgment in the U.S. District Court for the Middle District of Florida against Robin Ketcham, a defendant engaged in similar misconduct, and previously obtained a $2 million judgment and permanent injunction in September 2007 against Riedcor, Inc., a company involved in the same unlawful activity. TracFone has recently filed a lawsuit in New York as well.

"TracFone is committed to putting an end to these unlawful practices," said Brodie.

Baldinger added: "We intend to file many more lawsuits around the country, and to continue working closely with law enforcement, private investigators, and handset manufacturers to attack the perpetrators from all sides. Anyone engaged in this practice should be concerned that they may be our next target."

In November, Baldinger obtained a permanent injunction in the U.S. District Court for the Southern District of Texas against Muhammad "Mubi" Mubashir and his company, America's Wireless, requiring them to stop purchasing and unlocking TracFone handsets. Now, Baldinger is assisting the U.S. Attorney's office in Houston with prosecuting Mubashir for criminal contempt as a result of his continuing to engage in unlawful activity and violating the injunctions against him. That criminal trial is set to begin in March, and Mubashir could face several years in prison and hundreds of thousands of dollars in fines if convicted.

A member of Carlton Fields' Litigation and Dispute Resolution, Class Action Litigation, Telecommunications Law, and Intellectual Property Practice Groups, Baldinger practices complex commercial litigation and provides advice and counsel to companies on security, electronic surveillance, and telecommunications law matters. He formerly served as Vice President of Business Security and Senior Corporate Counsel for AT&T Wireless Services, Inc. He earned his J.D., cum laude, from Georgetown University Law Center in 1990 and his Bachelor's Degree from the University of Pennsylvania in 1987.

Located in major business centers in Florida and the Southeast, Carlton Fields offers a full range of legal services in more than 30 areas of law. Established in Tampa, FL in 1901, the firm maintains offices in Atlanta, Miami, Orlando, St. Petersburg, Tallahassee, Tampa and West Palm Beach. Additional information is available on the firm's web site located at

TracFone Wireless, Inc. is the largest prepaid cell phone provider in the U.S., and has been the leader in the 10 years since it was founded. TracFone is a subsidiary of America Movil, the fourth largest cell phone company in the world, and the largest in all of the Americas with more than 141 million cell phone subscribers -- more than AT&T, Verizon and Sprint. America Movil is traded on the New York Stock Exchange under the symbol AMX, and has been named top technology company by Business Week for the past 2 years (Technology Hot 100). For more information, visit

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