LITTLE ROCK — FORT SMITH - Foreign black markets are the most attractive outlets for cell phones like those swiped from an Alltel Corp. warehouse in Fort Smith last weekend, industry experts said.
Because they are stolen and because Alltel primarily uses Code Division Multiple Access networks, South American nations and parts of Asia are wherepilfered phones would likely have the most value.
"Every cell phone has an electronic serial number and Alltel knows what they are. So Alltel is blacklisting all of those phones in its system, and if somebody activates one [domestically], the alarm bells go off," said Roger Entner, senior vice president of Nielsen IAG, a New York research firm.
"What they [thieves or foreign buyers] do is take the firmware off the phone and attachnew firmware to it. Because it's operating on an entirely different network in an entirely different country, there's no way for [Alltel] to detect it. And officials in many foreign countries are not nearly as anal-retentive about property rights and stolen items as here in the states."
Police believe an organized group broke into the distribution center early Sunday and made off with thousands of cell phones in four stolen tractor-trailers.
"They knew what they weredoing," Fort Smith police spokesman Sgt. Jarrard Copeland said Wednesday.
The thieves cut a hole in the roof to gain entry to the Alltel distribution center at 5000 Burrough Road in south Fort Smith. After cutting the locks on loading dock doors at the rear of the center, they loaded several pallets of cell phones into the tractor-trailers before driving away. Police found a discarded bolt cutter.
Copeland said investigators fixed the time of the break-in at 2 a.m. Sunday, the time when the surveillance system was disabled. The alarm system also was disabled by the burglars.
There were no alarms from the distribution center last weekend before the break-in and no one reported seeing anything suspicious at the center, Copeland said. He said motorists passing by on Arkansas 255 or Burrough Road probably could not have seen the trailers at the rear of the building.
'TIME IS ON THEIR SIDE'
The burglars had the advantage of picking their time to break into the distribution center without being detected, said Edward Petow, a cargo security expert who lives in Fort Lauderdale, Fla.
"Time is on their side, especially on a long weekend," said Petow of FreightWatch International USA Inc., a logistics security company in Austin, Texas.
Three of the tractor trailers were stolen from C Bean Transport at 7501 Jenny Lind Road and Xpedx Trucking at 544 S. 66th St.No one has reported the fourth tractor-trailer believed used in the robbery as stolen.
Police later found one of the tractors used in the burglary abandoned near Alltel Arena in North Little Rock. Copeland said the FBI was processing that truck for evidence.
Copeland said the four or five Fort Smith police investigators on the case have been checking hotels and surveillance cameras at truck stops in the area. He said one of the stolen tractors was low on gas and one of the burglars may have taken it to a local truck stop to refuel.
Petow said large burglaries like the Alltel burglary occur more often than people would think. He said law enforcement in smaller jurisdictions often don't link the thefts to a larger organization or to similar crimes in other parts of the country.
INVESTIGATION
The Alltel burglary has been posted on the Regional Organized Crime Information Center, Copeland said, which reaches a large number of police and sheriff's offices in the area. He also said agencies up and down interstate highways in the region have been alerted to and given information about the burglary.
FBI spokesman Steve Frazier said Wednesday the FBI has launched its own investigation into the possible interstate transportation of the stolen property.
Petow said he believed the burglary was committed by one of several gangs that have burglarized other cell-phone and consumer-electronics warehouses around the country.
"I don't know any other groups that could logistically put this together and move this much product," he said.
Petow said groups from south Florida have committed large consumer electronics thefts in California, Texas, Oregon, Colorado, Missouri, Kansas, Arizona and Florida. Especially hard hit have been warehouses in Dallas, Chicago, Atlanta, Miami and central New Jersey.
Closer to home, a trailer full of Best Buy electronics at an Ardmore, Okla., warehouse was stolen in June. Someone stole a tractor from an equipment rental business across the street from the warehouse, hooked it up to the trailer and drove away.
Ardmore was hit again in August when someone stole a trailer of television sets belonging to Circuit City and parked at its warehouse. A stolen tractor was used to haul off the trailer.
Neither case has been solved,an Ardmore police spokesman said Wednesday.
LIKELY DESTINATION
Petow said he thought the thieves would not have taken such a large amount of product unless they already had a buyer, most likely from overseas.
Although Global System for Mobile communications networks, the type used by AT&T and T-Mobile, are most prevalent worldwide, Code Division Multiple Access networks are widespread as well.
From Bangladesh and Belarus to Russia and Venezuela, CDMA is used in dozens of countries - where huge demand for cell phones exists as well, said John Nugent, an associate professor at the University of Dallas and a former telecom executive.
"There are huge outlets overseas for this stuff. They could move this quickly," said Nugent, who also consults the federal government on security matters. "They would have the most value if they went into a network for which they were designed. Even though it's a discount value from retail, there's still significant value."
Most U.S.-bound phones that end up overseas are not stolen, but resold, Entner said. More often than not, they are boughtpiecemeal or in bulk from U.S. retailers at one price, then sold at higher prices abroad.
"Here they go in and buy a pre-paid phone for $20, then sell it for $30 in South America," he said. "In this case [the Alltel theft], they skipped the retail piece."
Such prices are still significantly lower than the $80 to $300 that companies like Alltel typically pay for each cell phone, Entner said.
Such phones are typically sold at discount to U.S. consumers in hopes that revenue from text messaging, photos, downloads and other data services will more than make up the difference. Any potential impact the theft may have on Alltel's bottom line is minimal at best, Entner said.
"All of these devices are insured," Entner said. "Alltel would not take a financial hit from this."
Wireless industry officials say the theft does not appear to fall into any broad pattern that's been observed nationwide.
"There's nothing that's really boiled up to the trade or governmental level," said Joe Ferren, spokesman for CTIA - The Wireless Association. "If there is, the carriers seem to be confronting it in a pretty quick manner."
Arkansas, Pages 9, 16 on 09/04/2008