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Telecommunications Case Studies:
Surveillance photos at Ace Wholesale in Taylor, Michigan, taken by private investigator for Sprint as part of a lawsuit against Ace.
Authorities say Floarea owned an electronics business called Ace Wholesale and used his storefronts in suburban Detroit and Atlanta to buy stolen smartphones in bulk and export them to other countries.
Authorities say Floarea bought the phones from thieves who stole them from consumers and retailers, often at gunpoint, and from con artists who bought the phones at steep discounts by agreeing to wireless contracts they had no intention of fulfilling.
Floarea hacked the phones' software to enable them to connect with wireless networks around the world, then shipped them as far away as Hong Kong, authorities said.
"These scams literally wreak havoc on local communities, because they create incentives for unscrupulous individuals to engage in all types of criminal activity to get their hands on phones," said Marlon Miller, special agent in charge of Homeland Security Investigations in Detroit, the unit that led the investigation into Floarea's business. "And once these phones are in the hands of overseas buyers, it's virtually impossible to track them back to the individuals perpetuating these crimes."
Authorities said Floarea was one of the country's most prolific phone traffickers, claiming that he was exporting thousands of phones that he knew were obtained by theft or fraud. Before a federal SWAT team descended in 2012, one Ace Wholesale storefront in a Detroit suburb attracted so many people bearing shopping bags stuffed with iPhones and iPads that managers installed a port-a-potty on the sidewalk.
Once inside the store, people deposited stolen phones into a rotating drawer below a bulletproof glass window and waited for the cashier to deliver stacks of cash. So much money changed hands in this fashion at the Ace Wholesale storefront in Taylor, Michigan that an armored truck arrived each morning to deliver fresh bundles of cash, according to a private investigator for Sprint.
Ace Wholesale's storefront in Taylor, Michigan