AH Tech Talk: What do Stolen Smartphones, Drugs, and Colombian Cartels Have in Common?

In a series of articles in the Huffington Post on the global underground world of trading smartphones, we gain an insight to something that would be hard for U.S. citizens to comprehend.  In Bogot¡, Colombia, certainly known for its drug trafficking and its share of arrests and murders for cocaine and other illegal narcotics, there is another highly lucrative and illegal trading going on, where murder can certainly be part of its collateral damage - the smuggling of smartphones.

In the early hours of the morning, acting on a tip from an informant, the Colombian police stop a van at the airport and hit the jackpot - dozens of boxes packed with precious contraband.  However, this bust did not involve narcotics, but more than 400 Samsung, LG, and BlackBerry smartphones, with battery chargers and even instruction manuals, and when powered on, these phones had AT&T and Verizon logos, not the local wireless carrier.

When the police checked the serial numbers on the stolen devices in the American database, they were not on their list of stolen phones, but Luis Guate, an investigator with the Colombian National Police said they were clearly stolen from the U.S. The wiretapped conversation between the cartels indicated they were mostly from Miami. Guate told Huffington Post:

"Our informant told us they were buying stolen phones from over there, fixing them up, and putting them in boxes with manuals to make them look new," adding that traffickers often alter serial numbers to avoid being linked to crime reports. "Then they would import them into Colombia."

Police say that about 80-percent of these smartphones are stolen devices!

While drug trafficking usually goes from the southern Latin America countries, north, to America, the smartphone traffic is the opposite, north to south and the rewards are well worth the cartels' participation with the stolen smartphones netting a worldwide estimate of $30 billion a year according to Lookout, a San Francisco based mobile security firm. With less risk than trafficking drugs and the yield of high profits from stolen smartphones, it is a cartel's dream business, especially since they already have the people in place to get the job done. The drug cartels already have the proper channels of distribution set up to receive stolen goods, whether it is cocaine or smartphones. And, while the drug trafficking is seriously watched, followed, and heavily prosecuted, not even country is cracking down on stolen phones.

"Drug trafficking is more dangerous, because all the countries are fighting drugs," Jeanet Pelaez, a prosecutor with Colombia's attorney general, told HuffPost. "But with stolen phones, not every country is attacking this problem. There is no control. The risk is minimal."

They say that Colombia has become the central hub where stolen smartphones are flown in or arrive via boats.  A highly organized courier industry gets the devices to Brazil to Argentina via on foot by way of milk or fruit containers, linings of coats, backpacks, or false bottoms of suitcases - something out of a Hollywood movie, only with real consequences.

The stolen smartphone industry has become so profitable that killings are not uncommon - a stolen iPhone can fetch as much as $2,000 in Hong Kong or Brazil where huge import taxes on Apple products have driven up their price.  The Colombian government has even try to use the media to discourage people from buying stolen smartphones, depicting the purchasing of stolen devices as having "blood" on them:

In order to complete the process of getting a stolen phone to work on the local carriers, a notorious computer hacker called Pedro Eduardo Chasco, will be called in to "hack" the phones. He would fly to a certain meeting area and hundreds of phones are brought into his motel room where he is paid anywhere from $20 - $50 a phone depending on the model, with iPhones and Samsung Galaxy models fetching the most money. Once the devices are no longer tied to their original networks, they can be shipped out for sale.

The trafficking of smartphones has even created its own language among the thieves, as the word "phone" is never actually spoken to protect themselves from the police wiretaps. They use the word "perritos" (doggies) for older phones and "buenitas" (beauties) for the newer, more desirable, smartphones, and rather than say the serial numbers, they will substitute letters for the numbers. To further cover their identity, many of the traffickers will drive Mazda's rather than flashy sports cars and they launder their money through the shopping centers that they own.

This why the U.S. authorities are interested in having a "kill switch" on all devices, making it less of a reason to steal the devices in the first place, but the CTIA - the trade group that represents the carriers - wants a stolen database setup instead.  They cite the reason that if a hacker "threw" a person's kill switch, their phone would be worthless with no way to turn it back on.  The manufacturers seem ready to include the switch, but without the carrier's support, there is no reason for them to include that capability.

Did you ever think the day would come when a smartphone was worth as much as an individual's life - yet the trafficking of smartphones has reduced it down to that, and there appears no signs that stealing smartphones will decrease anytime soon. When $30 billion dollars a year is involved, it seems like anything is fair game, including the taking of a human life.

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About the Author
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Cory McNutt

Senior Staff Writer
Cory has written for Androidheadlines since 2013 and is a Senior Writer for the site. Cory has a background in Accounting and Finance and worked for the FBI in the past. From there he pursued his Masters in English Literature. Cory loves Android and Google related technology and specializes in Smartphone Comparisons on our site. Contact him at [email protected]
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