Las Vegas Review-JournalDonrey Newspapers
Sunday, March 30, 1997

They've got your number

High-tech thieves cause headaches for cellular phone users.
By Adam Steinhauer
Review-Journal

      The Secret Service's 1994 raid of Gerasim Agajanian's East Sahara Avenue apartment turned up seven cellular telephones, 16 read-only-memory computer chips, tools and other electronics equipment.
      The stash netted Agajanian, a 24-year-old Russian emigre and former medical student, a 27-month federal prison sentence. He was said to have used the stolen phone numbers to filch more than $50,000 worth of long-distance phone service.
      Cellular phone service bandits like Agajanian cost the cellular telephone industry some $650 million a year, according to the Cellular Telephone Industry Association, and create a problem that many Las Vegans are personally familiar with.
      Almost one third of Las Vegas residents use cellular telephones, and many on some occasion have found large charges on their monthly statements for calls they never made.
      A regular practice of most cell phone service providers is to forgive charges for unauthorized calls. But the total cost is passed along to all cell phone users as the industry tries to recoup the almost 4 percent of its annual revenue that it loses to cell fraud.
      It is a problem that is not likely to go away soon, officials say.
      "We are not dealing with street thugs here," said Tim Ayers, spokesman for the industry association.
      Using special radio scanners -- illegal for most people to own but manufactured for use by law enforcement and cell phone technicians -- cell service thieves can pick up cell phone signals and read the two code numbers that identify each individual cell phone. One number is programmed into the phone at the factory and the second is installed by a cell service provider.
      Once stolen, those numbers can be programmed into any cell phone.
      "It's a very sophisticated crime, but once you learn the mechanics, it's relatively simple," said Joe Siatta, special agent in charge of the U.S. Secret Service's Las Vegas office.
      Calls made on the cloned telephones are then billed to the original phone's owner.
      There is a ready market for cloned telephones among gang members, drug traffickers and other criminals. Along with free telephone service, cloned phones provide their users with an extra measure of privacy in their communications, as their calling patterns are recorded on someone else's account.
      Others resell their stolen cell phone service, offering to patch through expensive long-distance calls on the stolen numbers. That is what Agajanian and two partners were accused of doing, according to Siatta.
      Unauthorized cell use is a federal felony and Senate Minority Leader Dina Titus, D-Las Vegas, is introducing a bill in the Legislature that would make cell fraud a felony under state law. (Titus became interested in the issue when she was billed $1,320 for someone else's international calls on her account last July.)
      Industry officials hope technological advancements will make cell fraud harder to commit.
      In the near future, cellular service will increasingly be offered on a digital broadcast signal that will be able to carry more information and clearer sound than current analog broadcast signals. Cell service thieves will have to learn new techniques to clone digitally capable phones, Ayers said.
      Some cell service providers are also experimenting with techniques called "authentication" and "fingerprinting," according to Ayers.
      With authentication technology, the cellular transmitter electronically "authenticates" that the identification codes it is receiving are coming from the authorized user's handset by sending it a mathematical question that only that handset has the answer to, Ayers said.
      With fingerprinting, the cell site is programmed to recognize very subtle and unique differences in the signals sent by each phone.
      But Ayers said it is unlikely that the industry will be able to completely defeat thieves, at least in the near future. "These are high-tech criminals. They have their own research and development departments."

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