AT&T insiders bribed to hack and plant malware on the company's network, DOJ alleges

The Department of Justice unveiled charges Tuesday against a Pakistani man who allegedly bribed AT&T employees to illegally unlock cellphones on the company's network. Muhammad Fahd, 34, made his first court appearance in Seattle federal court a day earlier.

According to the indictment, Fahd along with Ghulam Jiwani, who is believed to be deceased, allegedly paid hundreds of thousands of dollars to the workers to plant malware and misuse credentials to gain access to mobile devices. Fahd was arrested in 2018 in Hong Kong at the request of the United States before being extradited over the weekend.

"This defendant thought he could safely run his bribery and hacking scheme from overseas, making millions of dollars while he induced young workers to choose greed over ethical conduct," said Brian T. Moran, the U.S. attorney for the Western District of Washington. "Now, he will be held accountable for the fraud and the lives he has derailed."

Fahd faces several fraud-related charges, including four counts of wire fraud and two counts of accessing a protected computer in furtherance of fraud.

According to the DOJ, some of Fahd's early recruits were paid to identify other employees at AT&T who could also be bribed. Three co-conspirators have pleaded guilty and confessed to assisting Fahd in unlocking phones, which resulted in the company losing millions of dollars in service or payment plans.

The indictment alleges the malware planted on internal computers allowed Fahd to log into protected computers under false credential and "to process fraudulent and unauthorized unlock requests."

"This arrest illustrates what can be achieved when the victim of a cyber attack partners quickly and closely with law enforcement," said assistant attorney general Brian A. Benczkowski of the Justice Department's criminal division. "When companies that fall prey to malware work with the Department of Justice, no cybercriminal — no matter how sophisticated their scheme — is beyond our reach."

AT&T told CBS News partner CNET the network was unaffected by the malware and the plot did not involve improper access to any customer information.

"We have been working closely with law enforcement since this scheme was uncovered to bring these criminals to justice and are pleased with these developments," the company said in a statement.

The case is being investigated by the U.S. Secret Service Electronic Crimes Task Force.