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iPhone scheme defrauded Sprint out of nearly $800,000, government says

From Pennlive

WILLIAMSPORT — Three New York City area men have been accused in a scheme in which they allegedly made nearly $800,000 by fraudulently obtaining Apple iPhones and re-selling them.

Among the victims of the scheme in which personal identification information was stolen and then fraudulently used to create Sprint accounts were residents of Centre, Mifflin, Montour and Northumberland counties.

Details of the operation have come to light as parts of the indictment returned by a U.S. Middle District grand jury are unsealed.

Horace Henry, 42, and Andrew Craig Herdsman, 32, and a third unnamed individual who has not been arrested are charged with conspiracy to commit mail fraud, mail fraud and aggravated identity theft.

According to the indictment between January 2018 and this past July 26, Henry, Herdsman and the unidentified individual conspired to defraud Sprint out of approximately $795,000. The charges allege they:

— Obtained from various sources, including the Internet, personal identification information of individuals and used it to create false Sprint accounts, open service contracts, obtain counterfeit driver’s licenses and college student identifications.

— Used pre-paid gift cards to pay associated down payment or sales taxes required to activate the accounts.

— Arranged for iPhones that were part of the service contracts to be shipped to residences, many of which were for sale.

— Used shipping tracking numbers to determine when the phones would be delivered and traveled from the New York area to pick them up using counterfeit identification documents.

— Took the phones back to New York City, sold them and distributed the proceeds among themselves.

Henry, Herdsman and the unidentified individual are accused of defrauding Sprint by shipping 892 phones valued at $750,000 to the Middle District.

Henry and the unidentified individual also are accused of shipping 55 iPhones with a value of $45,000 to locations in Delaware and Maryland.

The government in a forfeiture clause of the indictment seeks to recover $795,000 in currency and any other property obtained with proceeds from the scheme.

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