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AT&T Sued Over Alleged iPhone Hack, Cryptocurrency Theft (1)

Oct. 18, 2019, 2:46 PMUpdated: Oct. 18, 2019, 5:05 PM

AT&T Inc. is facing a new lawsuit in federal court in Los Angeles from a digital media adviser and adjunct professor who says two AT&T employees hacked his iPhone and facilitated the theft of nearly $2 million in cryptocurrency.

Seth Shapiro claims AT&T failed to protect him from a “SIM swapping” scheme carried out by its employees. In a SIM swapping scheme, victims’ phone numbers are transferred to a different device without their consent, allowing others to access their passwords and accounts. In one recent, high-profile example, Twitter Chief Executive Officer Jack Dorsey was victimized by an apparent SIM swapping scheme that resulted in obscene and racist tweets being posted from his account.

Shapiro’s Oct. 17 lawsuit claims AT&T employees transferred control over his wireless number to a device controlled by third-party hackers in exchange for money. These hackers then accessed his personal cryptocurrency accounts and stole nearly $2 million from him, all while Shapiro “stood helplessly in the AT&T store asking for the company’s help,” he claims.

Shapiro, who is an author and adjunct professor of cinematic arts at the University of Southern California, says his allegations are supported by a criminal complaint filed against the AT&T employees in May.

AT&T denied Shapiro’s claims. “We dispute these allegations and look forward to presenting our case in court,” an AT&T spokesman told Bloomberg Law in an email. The company also referred customers to information on its website about SIM swapping scams.

Causes of Action: Federal Communications Act, Computer Fraud and Abuse Act, California Consumers Legal Remedies Act, California’s unfair competition law, California’s constitutional right to privacy, negligence, and negligent supervision.

Relief: Injunctive relief requiring cessation of AT&T’s acts and practices, money damages, interest, attorneys’ fees and costs.

Attorneys: Pierce Bainbridge Beck Price & Hecht LLP represent Shapiro.

The case is Shapiro v. AT&T Mobility, LLC, C.D. Cal., No. 2:19-cv-08972, complaint 10/17/19.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

To contact the editors responsible for this story: Laura D. Francis at lfrancis@bloomberglaw.com; Jo-el J. Meyer at jmeyer@bloomberglaw.com