Prosecutor charges former phone company employee in SIM-swap scheme

A former phone company worker has been charged with conspiracy to commit fraud for allegedly using his access to customer account data to take over the phone numbers of 19 customers, including at least one cryptocurrency holder.

Stephen Daniel DeFiore of Brandon, Florida, received about $2,325 between October 20, 2018, and November 9, 2018 in exchange for swapping the targeted customers’ SIM cards with ones belonging to a co-conspirator, prosecutors in New Orleans said earlier this week. For each SIM swap, the co-conspirator sent DeFiore the customer’s phone number, a four-digit PIN, and a SIM card number to which that phone number was to be swapped, prosecutors said.

The charges come eight months after federal prosecutors charged Richard Yuan Li of Hercules, California, with conspiracy to commit fraud for his alleged role in a SIM swap scam that targeted at least twenty people. Li was in possession of an iPhone 8 which the number of at least one of DeFiore’s victims was routed to, prosecutors said.

The alleged victim was a New Orleans-area medical doctor with cryptocurrency accounts at exchanges including Binance, Bittrex, Coinbase, Gemini, Poloniex, ItBit, and Neo Wallet. Li and his co-conspirators then allegedly accessed the physician’s email and cryptocurrency accounts and stole a “significant portion” of the victim’s holdings.

Prosecutors went on to allege that even after the doctor recovered the phone account, Li or one of his co-conspirators called the doctor to say he had viewed images in the doctor’s Gmail account and balances in the doctor’s cryptocurrency accounts. The caller then demanded 100 bitcoins, worth about $640,000 at the time, in exchange for not publishing the photos or stealing the cryptocurrency.

Prosecutors didn’t identify the phone company DeFiore worked for, but this LinkedIn profile lists a Stephen DiFiore who works as a Verizon customer service representative in Brandon, Florida. Verizon representatives didn’t immediately respond to an email seeking comment for this story. Attempts to reach DeFiore weren’t successful.

This week’s charges come as so-called SIM swapping crimes continue to proliferate, motivated in large part by criminals’ attempts to obtain large amounts of cryptocurrency in online accounts. Once a perpetrator obtains control over victims’ phone accounts, the perp typically uses that access to complete account resets for email accounts and from there resets passwords for other accounts.

If convicted, DeFiore faces a maximum of five years in prison and a fine of up to $250,000. Earlier this week, European officials announced the arrests of 10 individuals in connection with a series of SIM-swapping attacks that reaped more than $100 million.