Update On 3 Men With 1,000 Phones

Techdirt Some good news came for the three Palestinian-American men arrested in Michigan, basically for having 1,000 prepaid cell phones: they won't be charged with any terrorism-related offenses. The bad news: they've been hit with federal fraud charges instead. The guys' business plan was pretty straightforward: buy subsidized prepaid phones, then get them unlocked so they could work with any compatible provider, then sell them for a higher price. Prosecutors allege the men's actions represent an attempt to defraud prepaid provider Tracfone, phone manufacturer Nokia and the public by trafficking in counterfeit goods. While unlocking phones, particularly for resale, annoys mobile operators, it's not abundantly clear how doing so represents fraud, nor how unlocking the phones makes them counterfeit, and it's not clear at all why doing so is illegal, though Tracfone and other providers apparently make the bizarre claim that it's copyright infringement. In any case, it seems like any potential legal problems here would be of a civil nature, and not worthy of federal fraud and money-laundering charges. Somehow, you get the feeling somebody doesn't want to admit the arrest and subsequent treatment of these guys was nothing other than a big mistake.