American crypto entrepreneur sues AT&T over SIM swap scandal

A leading American entrepreneur is suing a major US communications provider over allegations that he was defrauded of a large number of cryptocurrency tokens by one of the firm’s employees.

Michael Terpin, who is the founder of the press release distribution firm Marketwire and who has lots of experience in the cryptocurrency sphere, claims that someone was able to transfer over three million tokens from his device thanks to the complicity of an AT&T worker.

Terpin alleges that the tokens were stolen from him on 7 January 2018. According to his allegation, an AT&T worker faked Terpin’s digital profile in order to access the coins and then steal them.

The accusation is compounded by the fact that Terpin was under the impression that he was enjoying additional device safety after he experienced a separate fraud incident back in 2017.

He stuck with AT&T in that case, but he was told by the firm that his devices would be protected with extra, impenetrable layers of security. Terpin is now using this as part of his gross negligence case against the company.

In a filing at the US District Court in Los Angeles, Terpin strongly criticised AT&T. His legal team levied 16 separate charges against the firm. These include charges of invasion of privacy, gross negligence, failure to supervise its employees and investigate their criminal background and, of course, fraud. In total, the lawsuit is believed to be worth just over $220m.

Terpin is represented by law firm Greenberg Glusker. Working on the case is senior partner Pierce O’Donnell who has previously worked for victims of Hurricane Katrina as well as a number of major criminal cases. This week, he released a damning statement condemning AT&T for its alleged behaviour.

“AT&T’s studied indifference to protecting its customers’ privacy and financial assets is a metastasizing cancer, threatening hundreds of millions of unsuspecting AT&T customers,” O’Donnell said.

“Our client had no idea when he initially signed up, nor when later he was promised the highest level of security for his account, that low-level retail employees with access to AT&T records, or people posing as them, can be bribed by criminals to override every system that AT&T advertises as unassailable,” he added.

The news comes after the recent arrests of several people on “SIM swap” allegations, and Terpin’s complaint explicitly references those accused as potential participants in his case.

It refers to the arrest of Joel Ortiz, who was taken into custody at Los Angeles International Airport in July. He is accused of multi-million dollar SIM swap crimes.

The complaint also refers to company culture at AT&T and claims that in some cases workers at the firm acted as middlemen for criminal organisations.

“Most troubling, AT&T does not improve its protections even though it knows from numerous incidents that some of its employees actively cooperate with hackers in SIM swap frauds by giving hackers direct access to customer information and by overriding AT&T’s security procedures,” the complaint reads.

“In recent incidents, law enforcement has even confirmed that AT&T employees profited from working directly with cyber terrorists and thieves in SIM swap frauds.”

Nigel Frith

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