Telecom Employee Admits to Wire Fraud in Scheme to Illegally Unlock Thousands of Mobile Phones

Richard Sherman created fake affiliate accounts to bypass SIM unlock restrictions, enabling large-scale resale of phones over a seven-year period.

NEWARK, NJ — A former employee of a multinational telecommunications company has admitted to participating in a wire fraud conspiracy that enabled the unauthorized unlocking of thousands of mobile phones, U.S. Attorney Alina Habba announced today.

Richard Forrest Sherman, 46, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to one count of wire fraud conspiracy, which carries a maximum penalty of 20 years in prison and a fine of $250,000 or twice the gain or loss involved, whichever is greater.

According to court records, Sherman previously managed an account for a customer who had received an exemption from standard SIM card unlocking restrictions. Beginning around 2013, Sherman allegedly created a series of fraudulent customer accounts within the carrier’s internal system, falsely portraying them as affiliate entities of the exempt customer. These fake accounts were then used to submit bulk unlocking requests for International Mobile Equipment Identity (IMEI) numbers.

Sherman received payments from third parties in exchange for using these fake accounts to submit the requests, which the carrier approved under the mistaken belief that they originated from a legitimate affiliate. Once unlocked, the phones could be resold for profit, bypassing fees or restrictions that would normally limit their resale value.

The scheme allegedly operated undetected for nearly seven years, until it was uncovered in August 2020. Sherman left the company prior to the scheme’s exposure but continued to benefit from the fraudulent activity through business entities he controlled.

The case was investigated by the U.S. Secret Service’s Seattle Field Office, led by Special Agent in Charge Glen Peterson, and is being prosecuted by Assistant U.S. Attorney Sean Nadel of the Narcotics/OCDETF Unit in Newark.

No sentencing date has been announced. Sherman remains subject to the federal court’s adjudication under the terms of his plea.