3 Arrested at Cerritos Apple Store in iPhone 'Gaming' Scam

The Cerritos Apple store was recently the scene of this nationwide crime trend, which has already resulted in millions of dollars in losses to wireless service providers AT&T and Verizon.

Three men were arrested at the Apple store in Monday in connection with an iPhone "gaming" scam -- a nationwide crime trend in which individuals are purchasing several iPhones at a discounted cost with no intent to fulfill the 2-year service contract, leaving wireless service providers with millions in monetary losses, according to the . 

"There's a trend happening where suspects are recruiting people -- often local transients -- and taking them to the Apple store in Cerritos and having them purchase as many iPhones as they can," said Cerritos sheriff's Det. Aaron King. 

The iPhones, which are purchased from Apple by AT&T and Verizon for $600, are sold to consumers at a discounted price of $200 with a 2-year service agreement. The service providers eventually profit from this agreement over the span of the contract. But when it comes to the "gaming" scam, these contracts are never fulfilled and instead the iPhones are often reprogrammed and resold, leaving wireless service providers with an immediate $400 loss in addition to a broken contract and unpaid wireless bills, the detective said.

"These individuals are being recruited to buy the iPhones for $200, while sacrificing their credit to get the phones, in return for a cash payment," King said. 

A series of the "gaming" scam was unveiled in Cerritos over Memorial Day weekend when the Cerritos deputies received a call at about 5:30 p.m. Saturday from a man who claimed he was the victim of a failed business transaction at the Cerritos Apple store, according King. 

Domingo Rios, 35, of Long Beach, told deputies that he had agreed to purchase five AT&T contracted iPhones for a man -- later identified as Gerald Blockmon, 21, of Venice -- in return for $150 cash, but he was not properly paid. 

On Memorial Day, Rios again contacted the Cerritos Station stating that Blockmon was back at the Apple store conducting a similar transaction with another recruited purchaser, later identified as Walter Staten, 63, of Compton. 

Responding deputies arrested Blockmon, Rios and Staten about 3:45 p.m. Monday for conspiracy to commit grand theft and commercial burglary, according to King. At the time of the arrest, Staten was also found with heroin in his pocket, the detective added.

Apple store employees say Blockmon -- considered the "ringleader" of this local scam -- is in the Los Cerritos Center location almost daily, King said. It is unclear how many other similar transactions he may have been involved in.

A representative from Verizon told King they intend to move forward in the case against Blockmon and Staten, who was referred to as a "credit mule."

"They're not only putting their credit on the line, they're also defrauding the service providers, who are suffering huge losses," King said.

AT&T and Verizon representatives say the "gaming" scam is a growing problem that has already resulted in millions of losses to the businesses.

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Jerome May 29, 2012 at 08:58 PM
Screw the service providers, they may be losing money on this scam but they are already making billions in overcharging cell users. On a side note, good to see the hot editor lady is back. Thought you were gone for good Mariesam, glad to see your back in business. I only read Patch beacuse of you. You are one sexy beautiful woman.
Rodger Higgins May 29, 2012 at 09:24 PM
To bad for the rest of their customers is more like it. These scum bags do this and the company increases their pricing to break even and passes it along to honorable bill paying citizens that don't get into the scamming. So Jerome, your intention is good but it does not screw the ISP it screws the customers that do pay.
Adam May 29, 2012 at 09:45 PM
This happens all over the place, and is in no way exclusive to iPhones. Just ask anyone who works at companies that are authorized sellers of postpaid cellphones. Fraud is rampant. The reason it's so successful is because those same companies (especially 3rd party) place an idiotic amount of emphasis on selling cell phones, causing reasonably intelligent sales associates to overlook obvious red flags just so they can make commission and not have to live off of minimum wage. Go spend 30 seconds in RadioShack and see if they don't launch a full on barrage of cell phone offers at you. I should know, I worked there for two years. Now they're becoming so desperate for sales that they will give you $5 in store credit just to check your upgrade eligibility so they can hound you when your upgrade date rolls around.
MarieSam Sanchez (Editor) May 29, 2012 at 09:54 PM
Thanks for the welcome Jerome, glad to have you back as a reader!
MarieSam Sanchez (Editor) May 29, 2012 at 09:55 PM
You bring up a good point Rodger, I think the consumers ultimately pay the price for scams like this. It's a no-win situation for us all.
MarieSam Sanchez (Editor) May 29, 2012 at 09:57 PM
Adam, as someone who has worked in the business firsthand. What do you think the solution is to this? I'm curious, do you ever really know someone's intentions when they purchase a phone from you? I'm guessing when someone comes in and buys several phones at once, it's a bit of a red flag right?
Joey B. May 29, 2012 at 10:32 PM
i agree with you dude, the patch girl is smokin. i saw her at the memorial ceremomy on monday in a red dress = shes a red hot latina.
Adam May 29, 2012 at 10:55 PM
Part 1, ha! Well the solution would have to come from at least two fronts: the business/person selling the phones with the original contract, and the carriers providing the service. The first would have to come in the form of education and better judgement of the person selling the device, or at the very least removing a large part of the incentive allowing the associates to figuratively "turn away" when red flags pop up. The second would be the outright removal of the incentive for people to sell the fraudulent devices, or at least stop people from buying these devices. The latter of the two is more of a safety net in case the first one fails or lets people slide through. In fact, next month AT&T is starting a new program that should combat this incentive to a fair extent. (As long as it's implemented well.) They are going to build an internal database of all the IMEIs associated to phones that are reported stolen or attached to an account disconnected for non-payment, and if anyone tries to activate one of these devices on a line AT&T will catch it and not allow the activation to proceed. Eventually they are going to be working with carriers throughout the world with everyone sharing these flagged IMEIs, meaning stolen/lost/disconnected phones won't have any value because no one will be able to use them. Part 2 continued...
Adam May 29, 2012 at 10:56 PM
...part 2 Handling the former with the original salesperson/business would have to come via: 1) hiring higher quality employees, 2) paying employees more so the temptation of permitting fraud is adequately subdued, 3) better training and education to spot fraud, and 4) perhaps hiring a "secret shopper" of sorts that tests to see if employees are prone to allowing fraudulent activities to take place. Not to mention, there is something to be said for common sense. If someone comes in and says they want to switch their five family lines from Sprint to AT&T but none of their family are present and they don't want to port any numbers, ninety-nine times out of a hundred that's fraud. Employees have to be willing to ask many probing questions of the customers just to try and trip them up or to see if their story is straight. I remember a time a young woman came in and said she wanted to create a new account on any of the carriers as long as she got the most expensive phone. I asked her who she currently had as a provider, she said none. Then her pocket began to ring. She looked me square in the eye and said it wasn't a phone. She pulled out this non-phone phone and answers it and then says "yes, this is her." There is what, half a dozen red flags in there? Still, my District Manager wanted to know why I didn't sell her a phone and what reasonable evidence I had causing me to think she was being deceptive.... 0.o
MarieSam Sanchez (Editor) June 05, 2012 at 05:49 AM
Adam, wow thanks for chiming in and sharing your expertise! I'm hoping with the changes that are on the horizon, crimes like this will be put to a halt or at least slowed down. Good to know things are at least trying to be done to fix these loopholes.
rodrigo August 16, 2012 at 01:50 AM
I played in the JC all star football game with blockmon and he was a talent. He had scholarship offers to play at a few schools, sad to see this idiot screw it up all for a little cash.
MarieSam Sanchez (Editor) August 16, 2012 at 08:54 AM
Rodrigo, did you two go to the same school together? If so, what school? Based on what you've shared, It sure is sad to hear that he let his athletic talent go to waste.
Danny Tiwaini September 11, 2012 at 07:48 PM
My family is a small business owner of 4 Verizon Wireless locations in Michigan. We see gaming on a daily basis and if we fail to catch the gaming up front we take a huge loss ($459.00) to be exact on any iPhone model. Typically if the customer is not porting in from another carrier, wants multiple phones and is not concerned with price, it is possible they are gaming. They usually have a spotter and are nervous when being asked multiple questions regarding getting new service. Its sad, because i see legit customers get turned away from other locations, because store managers are just too scared to sell iPhones on new activations, due to negative churn, and store profit loss. The only way to prevent things like this from happening would be to lower the outright price of the device, for example the iPhone 4s retails for 659.00, if the retail price were dropped to 299.99, there would be less incentive for a scammer to commit fraud and that small of a margin. I highly doubt that will ever happen though, until then we will simply have to stay on our toes and hope the carriers figure out a way to help prevent these types of scams from happening. Danny T
Johnny doe March 20, 2013 at 02:40 AM
There is not a way for a reseller to combat this without "profiling" or passing potentially unfair judgement on their customers. The onus is the carriers. They are the ones ultimately making the credit decisions and approving the activations (often with only $100 deposits required per line). Any action from the reseller to prevent the sale opens them up to much legal trouble, I would think?


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